Estimated read time: 3-4 minutes
- US Magnesium has halted its Skull Valley operations, laying off 186 workers due to market conditions.
- The company says it is hopeful that the plant's closure, influenced by a 90% drop in lithium carbonate prices, may be temporary.
- US Magnesium faces a $5.8 million lawsuit and environmental concerns at the Superfund Site.
TOOELE — US Magnesium says it will halt plant operations at Skull Valley until market conditions are more favorable. It's a decision that has led to a mass layoff of 186 workers, according to a notice sent to the Utah Department of Workforce Services.
Layoffs and the decision to "idle plant operations" were "heavily influenced by deteriorating market conditions for lithium carbonate. Product pricing has fallen by 90% since 2022," the notice says.
A notice was sent to the state in September, to comply with the Worker Adjustment and Retraining Notification Act, which requires a company with over 100 employees to provide written notice 60 days in advance if employers plan on a mass layoff or plant closure affecting 50 or more employees at a single site.
The Skull Valley operation spans over 80,000 acres and can produce 63,500 metric tons of magnesium, 9,000 metric tons of lithium carbonate, as well as liquid chlorine and other chemical products, according to the US Magnesium website. A hundred square miles of evaporation ponds on the Great Salt Lake make a concentrated brine used as the raw material in the complex to manufacture the products.
Positions listed in the layoff notice are varied but include top-level titles, like chief financial officer, vice president of marketing, director of engineering, director of sales and plant controller. The majority of those impacted, however, are boots-on-the-ground roles within the facility — operators, technicians, maintenance workers, warehouse clerks, supervisors and foremen.
The company notice says owners are "hopeful that these layoffs will be temporary in nature, but we are unable to guarantee this," as a reopening depends on the future recovery of lithium carbonate pricing.
US Magnesium, which did not immediately respond to a request for comment, is a defendant in an October lawsuit brought by construction company Forgen. The contractor alleges that US Magnesium owes almost $5.8 million in unpaid invoices and interest and has filed a lien against the company that could potentially entitle Forgen to sell the property to pay debts, according to court documents.
Evidence in the court documents shows a purchase order allegedly issued by U.S. Magnesium of $11.9 million for the construction of a hydraulic barrier wall. In its answer to the complaint, US Magnesium "denies that (Forgen) is entitled to any relief whatsoever."
That wall, described as "an underground pollution mitigation wall" in other court documents, is part of an effort spurred by environmental regulators to build a "large-scale control system to isolate and sequester all historic and future wastes and process waste streams," an EPA report says.
Forgen ceased work on the wall at the end of 2023. It is unclear what this will mean for the protection of the area from the migration of dangerous contaminants.
The plant was designated a Superfund Site in 2008 due to hazardous chemicals contaminating soil, air, surface water and groundwater. The EPA currently reports an "unsafe level of contamination" is detected at the site, there is "a reasonable expectation ... that people could be exposed" and "the migration of contaminated groundwater is not stabilized."
In a 2023 federal study, researchers found high levels of chlorine and bromine released by US Magnesium boosted particulate matter levels by 10-25% in the Wasatch Front area during a winter inversion period.
Ron Thayer, president of US Magnesium, issued a statement to KSL.com calling that study "erroneous" and its conclusions "false." A third party engineering firm hired by US Magnesium to evaluate the study, wrote that the data "do not support the assertion ... that (particulate) increases of 10% - 25% are directly attributable to US Magnesium."
Correction: It was previously reported the 2023 federal study indicated air quality may be positively impacted by the plant closure. That study related to the company's magnesium plant, which has not operated for over two years.
