OVERLAND PARK, Kan.--(BUSINESS WIRE)--Compass Minerals (NYSE: CMP), a leading global provider of essential minerals, today announced that, until it has clarity on the evolving regulatory climate in Utah, it will be suspending indefinitely any further investment in its planned lithium project.
“While we remain confident in the value creation potential of this project, we also have a responsibility to our shareholders to operate as prudent stewards of the capital we expend,” said Kevin Crutchfield, president and CEO. “As we continue to engage in productive discussions with the State of Utah, I’m hopeful that we will be able to chart a path forward that will allow this resource to be responsibly developed for the great benefit of all stakeholders, including the State. Until we have that regulatory certainty, however, we will be suspending this project indefinitely and focusing our efforts on continuing to maximize the performance of our high-quality salt, plant nutrition and emerging fire retardant businesses.”
Compass Minerals’ Ogden facility has operated responsibly on the Great Salt Lake for over half a century. The company’s Ogden operation currently produces three essential mineral salts—sulfate of potash, sodium chloride and magnesium chloride—and provides approximately 370 local jobs. It is anticipated that the lithium project would create in excess of an additional 100 jobs in the area. Compass Minerals is an engaged community partner and active lake stakeholder, committed to the shared goal of protecting the long-term health and sustainability of the Great Salt Lake.
As previously announced, Compass Minerals is pursuing the sustainable development of an approximately 2.4 mMT lithium carbonate equivalent (LCE) resource on the Great Salt Lake to help enable the critical formation and expansion of an advanced battery supply chain in North America. Utilizing synergies with its existing Ogden production assets, lithium chloride would be the fourth mineral salt harvested from the same unit of brine already being processed, minimizing environmental impact with no incremental brine draw required from the Great Salt Lake.
The March 2023 passage by the Utah State Legislature of House Bill 513 (H.B. 513, Great Salt Lake Amendments), and the subsequent regulatory rulemaking process it authorized with regard to lithium production on the Great Salt Lake, has introduced a significant amount of uncertainty regarding the regulatory environment in which the company’s lithium program would be operating, as well as the timing of when that investment could proceed. Since the inception of H.B. 513, Compass Minerals has actively engaged with the State of Utah in a collaborative attempt to ensure the provisions of the bill, now statute, were implemented in a way that would not slow or halt the progress the company has made to date in pursuing the development of a sustainable lithium salt resource to service the North American advanced battery market. The proposed rule published in mid-October by the Utah Division of Forestry, Fire and State Lands (FFSL) introduces new obstacles to lithium salt production on the Great Salt Lake that have slowed progress and will require resolution prior to Compass Minerals proceeding further.
As a result, Compass Minerals will be indefinitely suspending any further investment in its lithium project in Utah beyond certain already committed items associated with the early stages of construction of its commercial scale demonstration unit. The company will temporarily redeploy lithium-related personnel where appropriate. Compass Minerals will also leverage this period of time during project suspension to consider potential partners at the project level with an aim of reducing its share of capital costs and lowering execution risk in the event that the project was restarted. Any such partnership would be conditioned on the achievement of an acceptable and predictable regulatory framework in Utah governing the production of lithium salt on the Great Salt Lake.
“Our shareholders can be certain of two things with regard to our lithium development plans,” added Joe Reece, non-executive chairman of the board. “First, our board will only authorize further investment in this project if the evolving regulatory climate in Utah encourages responsible lithium development like we have been pursuing. Second, and equally as important, we are firmly committed to avoiding the use of common equity at the enterprise level to fund our company’s portion of any future investment in the project.”
About Compass Minerals
Compass Minerals (NYSE: CMP) is a leading global provider of essential minerals focused on safely delivering where and when it matters to help solve nature’s challenges for customers and communities. The company’s salt products help keep roadways safe during winter weather and are used in numerous other consumer, industrial, chemical and agricultural applications. Its plant nutrition products help improve the quality and yield of crops, while supporting sustainable agriculture. Additionally, the company is pursuing development of a sustainable lithium brine resource to support the North American battery market and is owner of Fortress North America, a next-generation fire retardant company. Compass Minerals operates 12 production and packaging facilities with nearly 2,000 employees throughout the U.S., Canada and the U.K. Visit compassminerals.com for more information about the company and its products.
Forward-Looking Statements and Other Disclaimers
This press release may contain forward-looking statements, including, without limitation, statements about the company's lithium brine development project any potential future partnership relating to the lithium project; efforts to expand the company's minerals portfolio; value creation; and the regulatory climate in Utah. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. We use words such as “may,” “would,” “could,” “should,” “will,” “likely,” “expect,” “anticipate,” “believe,” “intend,” “plan,” “forecast,” “outlook,” “project,” “estimate” and similar expressions suggesting future outcomes or events to identify forward-looking statements or forward-looking information. These statements are based on the company’s current expectations and involve risks and uncertainties that could cause the company’s actual results to differ materially. The differences could be caused by a number of factors, including without limitation (i) weather conditions, (ii) inflation, the cost and availability of transportation for the distribution of the company’s products and foreign exchange rates, (iii) pressure on prices and impact from competitive products, (iv) any inability by the company to successfully implement its strategic priorities or its cost-saving or enterprise optimization initiatives, and (v) the risk that the company may not realize the expected financial or other benefits from the proposed development of its lithium mineral resource or its investment in Fortress North America. For further information on these and other risks and uncertainties that may affect the company’s business, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s Annual Report on Form 10-K for the period ended Sept. 30, 2023 and its Quarterly Reports on Form 10-Q for the quarters ended Dec. 31, 2022, March 31, 2023 and June 30, 2023 filed or to be filed with the SEC, as well as the company's other SEC filings. The company undertakes no obligation to update any forward-looking statements made in this press release to reflect future events or developments, except as required by law. Because it is not possible to predict or identify all such factors, this list cannot be considered a complete set of all potential risks or uncertainties.