Compass Minerals Announces Suspension of Lithium Project Pending Regulatory Clarity in Utah
02 Novembro 2023 - 8:00AM
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20231101274315/en/
Investor Contact Brent Collins Vice President, Investor
Relations +1.913.344.9111 InvestorRelations@compassminerals.com
Media Contact Rick Axthelm Chief Public Affairs and
Sustainability Officer +1.913.344.9198
MediaRelations@compassminerals.com
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