Note to readers • This story is made possible through a partnership between The Salt Lake Tribune and Grist, a nonprofit environmental media organization.
It’s the end of an era, with major implications for the Great Salt Lake.
Last month, the Utah Division of Forestry, Fire and State Lands won a bid in Delaware bankruptcy court for US Magnesium’s facility in Tooele County. The sprawling complex of ponds, smokestacks and an old processing plant has a long history as a major polluter in Utah. The purchase gives the state control of the site’s most valuable assets, including 4,500 acres of land and extensive water rights tied to the shrinking Great Salt Lake.
“We’re doing the right thing,” Director Jamie Barnes said in an interview.
The only other bidder on the mothballed plant in Rowley was LiMag Holdings, an affiliate of Renco — US Magnesium’s New York-based parent company.
A federal bankruptcy judge signed off on the purchase agreement between the state and US Magnesium on Feb. 5.
Barnes and Deputy Director Ben Stireman explained how their agency planned last month’s surprising takeover, which cost taxpayers $30 million. The funds come out of the Department of Natural Resources’ base budget, which lawmakers and Gov. Spencer Cox approved at the end of January.
Here are five key takeaways on what the state plans to do with the defunct facility and what Utahns stand to gain from the sale.
Why Utah decided to make the purchase
Utah lawmakers passed HB 453 in 2024, which allows the state engineer to enact drastic cuts on mineral extractors that rely on the Great Salt Lake when the lake’s water elevation falls below a certain threshold. Before that bill’s adoption, the only limit on how much companies could pump was the amount allowed under their water rights.
The Division of Forestry, Fire and State Lands worked out voluntary agreements where many mineral companies agreed to proactively use less lake water or lease water to the state in exchange for more flexible curtailments, depending on lake levels.
But the division struggled to work out an agreement with US Magnesium.
“Those negotiations fell apart,” Barnes said, “and they declared bankruptcy in September.”
Barnes and other top officials at the Department of Natural Resources determined it was in the state’s “best interest” to acquire US Magnesium’s water rights instead. The company had rights of up to 145,000 acre-feet of lake water — or about as much water as roughly 300,000 Utah households use each year.
By comparison, water leases and donations to the Great Salt Lake combined last year totaled about 217,000 acre-feet, according to DNR data.
Will US Magnesium’s water now permanently stay in the Great Salt Lake?
Barnes said the state “absolutely” plans to donate US Magnesium water rights to the Great Salt Lake, which may be its most valuable asset.
“Leasing that amount of water rights alone would have cost us millions of dollars per year,” Barnes said.
But state officials stopped short of saying all of US Magnesium’s water will permanently stay in the lake.
Some mineral companies, like Cargill, don’t have water rights of their own and depended on sub-leases from US Magnesium to stay in businesses, producing products like road salts. The state’s objective, Barnes and Stireman said, is not to harm those industries.
“We would hold those companies to the same standard that we’ve done in other voluntary agreements to keep them operational but also reflect low lake levels,” Stireman said.
US Magnesium delivered just over 8,000 acre-feet to Cargill in 2024, according to state data. In 2022, when the Great Salt Lake hit a record low, US Magnesium sent more than 19,000 acre-feet of the lake’s water to Cargill.
How purchasing US Magnesium will accelerate environmental cleanup
US Magnesium has a history of federal and state environmental law violations, including emissions of toxic chlorine gas and acidic wastewater that potentially leaked into the neighboring lake. Federal regulators said last year that the plant may pose a risk to migrating birds and wildlife.
Barnes said buying US Magnesium means that cleanup at the site will finally move forward after years of delays.
“It’s important for Utahns to know,” Barnes said, “the state already had cleanup liability for that site.”
Several of US Magnesium’s spills and environmental violations occurred on land along the lakebed the company leased from the state. Under federal Superfund law, property owners can be held at least partially responsible for pollution, even if they didn’t cause it directly.
“We’re not taking on what we believe are any additional liabilities under federal Superfund law,” Barnes said. “This is simply us now having a say and making sure it’s reclaimed correctly.”
The state will also continue exploring avenues to hold US Magnesium and Renco responsible for environmental expenses, Barnes said.
The U.S. Environmental Protection Agency previously calculated cleanup costs at “well over” $100 million. But state officials said those estimates were preliminary, and made when US Magnesium was still the plant’s operator.
“One of the benefits we have as a state agency is a good relationship with EPA,” Stireman said, “so we can figure out ways to be innovative.”
Will Utah shut down US Magnesium for good?
Before production shutdown, US Magnesium was the nation’s largest producer of magnesium metal, a crucial material used in all kinds of things like food cans, car parts and missiles. The company had also expanded into producing lithium, an important mineral used for batteries in electric vehicles.
Officials said they would like to see continued production of critical minerals in the state down the line.
“The state’s objectives are to, No. 1, keep water in the lake; No. 2, to reclaim the site; and eventually, No. 3, see if there’s a way to produce critical minerals at that site through a diligent operator,” Barnes said.
As part of the bankruptcy sale, Barnes’s division bought back US Magnesium’s mineral lease. It also obtained a memorandum of understanding, which was under dispute, that allowed the company to produce its lithium.
The state’s bid may have prevented history from repeating
Renco has faced scrutiny throughout much of its 30 years of operating in Utah. Both the EPA and state agencies spent years trying to force the company to clean up the site.
It delayed some of that cleanup in 2001 by declaring its first bankruptcy, when Renco changed its affiliate operator from Magnesium Corporation of America to US Magnesium. That allowed Renco to keep running the magnesium plant while it negotiated with the EPA and state regulators.
They finally reached an agreement in 2021, called a consent decree, but it only took a few years for US Magnesium to fall short of its obligations, and once again the company operating the plant declared bankruptcy.
“We looked at how the state could prevent history from repeating,” Barnes said. “LiMag was being set up as a US Magnesium 2.0, in our opinion.”
No one but Renco was likely to step in and purchase the site, Barnes said, due to its status as an extensively polluted Superfund site. That’s why the state opted to step in.
“Giving that ecosystem and health back to the lake,” Barnes said, “is priceless.”