Note to readers • This story is made possible through a partnership between The Salt Lake Tribune and Grist, a nonprofit environmental media organization.
US Magnesium’s Rowley plant on the west shore of the Great Salt Lake has a long and contentious history of pollution, environmental violations and financial woes.
All those unresolved problems have left Utahns and regulators with a giant mess. The facility stopped producing magnesium metal in 2021 due to equipment failure. The plant’s operators filed in bankruptcy court for the second time in as many decades this fall. Environmental watchdogs worry a highly acidic groundwater plume is seeping toward the Great Salt Lake, but US Magnesium says it doesn’t have the funds to pay off its many creditors or to address any lingering pollution.
Here is what to know as state officials and the Environmental Protection Agency battle with US Magnesium to hold the plant operators liable for a long legacy of contamination.
[Read more: US Magnesium’s bankruptcy leaves Utahns wondering: Who will pay to clean up its mess?]
How much will it cost to cleanup the US Magnesium site?
Company operators assert they want to meet their environmental obligations, but they can’t without generating any revenue.
Restarting magnesium production will take a $40 million investment, US Magnesium president Ron Thayer said in a Sept. 29 deposition. The company also wants to continue producing lithium from its waste piles, which will cost another $30 to $100 million, Thayer said. But the company does not have a permit to produce lithium after negotiations with the state broke down this year, and state regulators are working to revoke the company’s lease to operate on the Great Salt Lake and produce magnesium.
If the company is evicted and the plant shutters for good, the EPA estimates it will cost “well over” $100 million to remove all the contamination from the site. But in an email to The Salt Lake Tribune, Thayer disputed EPA’s estimate, asserting “professional estimates” found cleanup would cost less.
Who will pay the $100 million if US Magnesium doesn’t have the funds?
The EPA declined to say who would be obligated to pay the cleanup costs if US Magnesium ultimately doesn’t have the cash. State regulators also didn’t have a firm answer.
Under Superfund law, the federal government aggressively pursues parties responsible for pollution, including current and past operators, and potentially their parent companies. Owners of the land where the contamination occurred can also be held liable before the federal government shells out taxpayer funds.
US Magnesium partially operates on state lands.
But in the US Magnesium case, Superfund law and bankruptcy law are in conflict, said Brigham Daniels, an environmental law professor at the University of Utah. Whether the company’s remaining resources will pay off its many creditors, or whether the court will prioritize the environment remains unknown.
What is the status of US Magnesium’s bankruptcy case?
On Sept. 15, days after it filed for Chapter 11 bankruptcy in Delaware, US Magnesium proposed auctioning off its assets. It offered the court a “stalking horse” bidder, or a party that makes an initial offer and sets a base price.
The proposed bidder is LiMag Holdings, LLC — a new affiliate of Renco, US Magnesium’s New York-based parent company.
The company also asked the court to allow LiMag to modify the plant’s agreements with the EPA and extend its schedule for cleanup obligations.
State and federal regulators balked at the proposal. They argue it mirrors a past maneuver in which another Renco affiliate, called MagCorp, filed bankruptcy in 2001 to successfully shed its liabilities while continuing to operate the Rowley plant under a new affiliate, US Magnesium. No company other than Renco would bid on the plant, state regulators argued, since it is so polluted.
The government agencies — along with creditors — have asked the court to convert the case to Chapter 7 and liquidate the plant instead.
What cleanup has been done at the US Magnesium site so far?
(Francisco Kjolseth | The Salt Lake Tribune) The retrofitted waste pond at US Magnesium, which has ceased operations at the magnesium plant on the western edge of the Great Salt Lake, is pictured on Thursday, Dec. 12, 2024.
The EPA added the Rowley plant to the National Priorities List in 2009, deeming it one of the most polluted sites in the nation and placing it under Superfund oversight. But the MagCorp bankruptcy took nearly two decades to resolve, culminating in a “consent decree” between US Magnesium and the EPA in 2021.
Under that agreement, the company is required to build a barrier wall to stave off polluted water from reaching the Great Salt Lake, install a filtration system and contribute money for future cleanup costs, among other things. Work began in 2023, but stopped after just six months when US Magnesium failed to pay its invoices. The barrier wall currently sits half finished.
US Magnesium contends in court fillings that it doesn’t have the funds to finish paying for construction and that because it isn’t producing magnesium or acidic waste anymore, it doesn’t pose an imminent environmental threat.
But Bill Johnson, a geology professor and Superfund advisor for the site, said the company has not adequately monitored pollution migrating offsite via groundwater. He suspects an undetected plume created by decades of leaking wastewater is seeping toward the neighboring lake.
Thayer asserts site sampling has shown no evidence of a plume.
A district court appointed a receiver to monitor the plant’s environmental status after Utah regulators filed a lawsuit last year. All environmental actions were placed on pause when US Magnesium filed for bankruptcy in September, court documents show. With urging from state regulators, however, the bankruptcy court allowed the receiver to move forward with his assessment late last month.