The essential minerals company recorded a total of about $77.3m in expense in the first quarter as a result of its decision to terminate its lithium project
Compass Minerals to no longer pursue operations at its lithium brine project in Ogden, Utah. (Credit: Finnrich from Pixabay)
Compass Minerals has decided to no longer pursue operations at the company’s lithium brine project in Ogden, Utah, US, citing regulatory risks.
The announcement was made as part of the US-based essential minerals provider’s fiscal 2024 first-quarter results.
According to Compass Minerals, the decision about the project is in the best interests of shareholders.
As part of the termination of the lithium project, Compass Minerals’s lithium head Chris Yandell has left the company, and the lithium development team has been dissolved.
The essential minerals company recorded a total of about $77.3m of expense in the first quarter as a result of its decision to terminate the lithium brine project.
Its expenses include the impairment of some lithium project assets and future commitments and restructuring charges linked to the exit of certain lithium and Ogden team members.
Compass Minerals said that it intends to continue to monitor and participate in legislative and regulatory processes in Utah to maintain the long-term optionality of the lithium potential at its Ogden operations.
Compass Minerals president and CEO Edward Dowling said: “The environment surrounding our lithium project today is markedly different than the one that existed a couple of years ago when we started down this path.
“The simple fact is that the regulatory risks have increased significantly around this project. When combined with other changes to the commercial landscape, it became clear that the risk-adjusted returns on this project are inadequate to justify the investment.”
In May 2023, Compass Minerals signed a binding, multi-year supply agreement with Ford Motor to provide battery-grade lithium carbonate to the automotive major from its Ogden lithium brine development project.
Under the terms of the agreement, the essential minerals company was to supply up to 40% of its planned phase-one lithium carbonate for a period of five years to Ford Motor once production starts.