Agreement Includes Significant Water Rights Donation to the State
OVERLAND PARK, Kan.--(BUSINESS WIRE)--Sep. 3, 2024--
Compass Minerals (NYSE: CMP), a leading global provider of essential minerals, today announced that it has executed a binding Voluntary Agreement (Agreement) with the Utah Division of Forestry, Fire and State Lands (FFSL) outlining water and land conservation commitments the company is making toward the long-term health of the Great Salt Lake. As previously announced, Compass Minerals and FFSL had entered into a Term Sheet in early March, 2024, establishing the framework for negotiations on a binding Agreement.
“The Great Salt Lake is a vital ecosystem and economic engine that we must all work to protect, and Compass Minerals stands with the many diverse stakeholders contributing toward the preservation of this globally significant resource,” said Edward C. Dowling Jr., president and CEO. “Through this Voluntary Agreement, we commit to significant contributions toward lake health, while also ensuring future predictability in our water use allotment that supports sustainable production at our Ogden facility.”
Per the terms of the Agreement, Compass Minerals will donate non-production-related water rights totaling approximately 201,000 acre feet annually to be used by the State of Utah for lake conservation and preservation. Additionally, the company will remit back to the State nearly 65,000 acres of leasehold, also currently not utilized for production, which will subsequently be set aside from future mineral leasing to be preserved in perpetuity for conservation and other beneficial uses according to FFSL’s existing management authority. Finally, the Agreement outlines a progressive set of brine withdrawal caps for certain of Compass Minerals’ consumptive water rights, based on annual lake elevation and informed by the Great Salt Lake Strategic Plan. Compass Minerals does not expect these consumption caps to materially impact its essential mineral production on the Great Salt Lake unless lake elevations were to fall to historic lows.
“This agreement is an example of the good we can accomplish when public and private come together to be a part of the solution,” said Utah Governor Spencer J. Cox. “The donation from Compass Minerals will ensure that water delivered to the Great Salt Lake will remain in the lake. We look forward to the lasting benefit this will make toward the health and sustainability of the lake for generations to come.”
Statutory authority and subsequent benefits for operators to enter into Agreements of this nature was established during the 2024 Utah legislative session through the passage and enactment of House Bill 453 (H.B.453), “Great Salt Lake Revisions”. This legislation, now Utah state law, amends and expands current state statute governing mineral extraction on the Great Salt Lake, including but not limited to new severance taxes and a requirement for the state to develop a mandatory water distribution plan for mineral extractors on the lake. The proactively negotiated caps on certain of Compass Minerals’ consumptive water rights included in the Agreement will be reflected in the state’s water distribution plan. H.B.453 also enabled severance tax relief and protections against potential eminent domain actions for mineral extraction companies that enter into Voluntary Agreements with the state.
“When lake levels are high, Compass can withdraw up to its existing water right, just as they could always do – but in years with lower lake levels, they have committed to decreasing their water use – or suspending it completely if the lake reaches the critical levels we experienced several years ago,” Jamie Barnes, director of the Utah Division of Forestry, Fire and State Lands, said.
As part of its regulatory authorities, FFSL is responsible for managing Utah’s sovereign lands, including the beds and banks of navigable rivers and lakes within the State.
“We have been working with stakeholders across the state to identify ways to conserve water and ensure it makes it to the lake,” said Brian Steed, Great Salt Lake Commissioner. “We recognize restoring the lake to healthier levels will take years, and we appreciate the action Compass Minerals is taking today to help protect the lake. Together, we can make a difference.”
Compass Minerals’ Ogden facility has operated on the Great Salt Lake for over half a century, producing sulfate of potash, salt and magnesium chloride from the lake’s mineral-enriched brine. The company’s Ogden operation currently provides nearly 400 local jobs and representatives of Compass Minerals participate on multiple policy and advisory groups focused on ensuring a healthy lake ecosystem.
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, it is working to develop a long-term fire-retardant business. 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 regarding future operational stability, the donation of water rights and remission of leasehold, the impact of such donation and remission on mineral production, severance tax relief, protections against potential eminent domain actions and the ability to proactively negotiate water conservation commitments. 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 those factors identified in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s Annual and Quarterly Reports on Forms 10-K and 10-Q, including any amendments, 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.
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Media Contact
Rick Axthelm
Chief Public Affairs and Sustainability Officer
+1.913.344.9198
MediaRelations@compassminerals.com
Investor Contact
Brent Collins
Vice President, Investor Relations
+1.913.344.9111
InvestorRelations@compassminerals.com
Source: Compass Minerals
