- Utah plans to acquire US Magnesium's plant for $30 million.
- The purchase includes 144,000 acre-feet for the Great Salt Lake annually and efforts to address environmental risks.
- Gov. Cox calls it a common sense investment in Utah's future and natural resources.
Editor's note: This article is published through the Great Salt Lake Collaborative, a solutions journalism initiative that partners news, education and media organizations to help inform people about the plight of the Great Salt Lake.
ROWLEY, Tooele County — Utah is close to formally acquiring US Magnesium's facility next to the Great Salt Lake after its $30 million bid to acquire the plant won an auction this month.
The state plans to close on the acquisition early next week, which will help secure over 144,000 acre-feet of water rights "that will remain in the Great Salt Lake," along with other assets tied to the facility, said Jamie Barnes, director of the Utah Division of Forestry, Fire and State Lands, as she provided an update on the division's Great Salt Lake water leasing efforts to state lawmakers on Wednesday.
It's an "enormous amount of water" and an opportunity that the state couldn't pass up, said Joel Ferry, the director of the Utah Department of Natural Resources, which oversees the division.
"It will be the single largest transaction and opportunity that I've seen — and that we'll see ever," he told KSL after the meeting. "It's significant. It's just an absolutely huge, incredible opportunity for the Great Salt Lake and for the benefit of the people of Utah."
The division initially offered $15 million during a bankruptcy sale of the Tooele County plant, before finding itself in battle with LiMag Holdings, which was tied to the Renco Group Inc., US Magnesium's owner, according to federal court records. The two dueled back and forth until Utah offered $30 million, which LiMag declined to match by Friday's deadline.
Utah had sought to terminate the plant's water leases, but it was delayed by the company's bankruptcy filing in the U.S. District Court of Delaware last year. US Magnesium had previously closed the facility amid "deteriorating market conditions" in the mineral industry that led to what was hoped to be a temporary shutdown at the time.
The plant presented other concerns beyond its use of the Great Salt Lake, though.
A 2023 study led by the Cooperative Institute for Research in Environmental Sciences pointed to the plant as a producer of high levels of chlorine and bromine, leading Gov. Spencer Cox to ask the Environmental Protection Agency to include it within the Northern Wasatch Front ozone nonattainment area later that year.
Environmental groups also pointed to concerns with a pond of contaminants at the site.
The $30 million will come from a rainy day fund that Utah set aside years ago for water purchases and other needs, said Ferry, who also serves as Utah's water agent. It's not a part of any new funding requested this year or from the $53 million allocated for projects that bring more water to the Great Salt Lake.
Utah could set aside some of the other assets to allow for more sustainable mineral extraction along the lake, using technologies that don't consume much water, he added.
"By securing these assets, the state is keeping more water in the lake, addressing long-standing environmental risks and supporting advanced mineral development," said Gov. Spencer Cox, in a social media post on Tuesday, as he lauded the Utah Department of Natural Resources for stepping in. "This is a common sense investment in Utah's future, and in one of our most important natural resources."
The state's purchase comes as Utah has started working with other mineral producers along the lake to help reduce the consumption of lake water. It reached an agreement with Compass Minerals in 2024 on a deal to permanently direct over 200,000 acre-feet of water to the Great Salt Lake every year.
Waterleaf Resources recently completed a feasibility study to extract lithium from the lake, where it expects to use technologies that lead to no net losses of lake water. It's the first mineral extraction company to complete a feasibility study since the program was created a few years ago, Barnes said.
Utah also secured multiple new water leases last year to increase water deliveries to the lake, she added. It's helped as the lake has declined in recent decades due to drought and overconsumption of the water that typically ends up in the lake.
Having the US Magnesium plant is expected to be a major boost to the efforts to get the lake back to its healthy levels.
"This is a huge advancement in the right direction to get us there," Ferry said. "We're going to continue to work hard and to make the investments necessary so that we're looking out for the best interests of the people of Utah."
