A geology professor stands on the shore of Utah’s Great Salt Lake during a site visit to an industrial facility. Workers brief him on safety protocols—his eyeglasses should be removed because the chlorine emissions are strong enough to affect contact lenses.
What he’s about to study is one of America’s most contaminated industrial sites, now facing bankruptcy. The central question: Who will pay the $100 million cleanup bill?
The Expert’s Findings
Bill Johnson, a professor of geology at the University of Utah, has served as the technical advisor on this Superfund cleanup since 2013. His findings are alarming: acidic wastewater ponds have corroded earthen barriers, sediments pose hazards to wildlife, and a toxic groundwater plume may be moving toward the Great Salt Lake.
Johnson has examined soil samples and studied the hydrology beneath the facility’s surface for over a decade.
A Plant the Size of a City
The industrial footprint covers roughly 4,500 acres—about the same size as South Salt Lake—on state-owned lakebed at the Great Salt Lake’s western shore. For decades, this facility processed briny lake water into magnesium metal, a critical mineral used in car parts, wind turbines, and solar panels.
It was once America’s largest producer of magnesium. Today, the smokestacks are silent, and what remains is a contaminated legacy.
The Red River and EPA’s $900 Million Threat
In 2001, EPA investigators documented an unlined canal running 2,000 feet long and 20 feet deep, filled with liquid so acidic that workers called it the “Red River.” The canal flowed into an equally acidic waste lagoon.
The EPA sued and threatened penalties of $900 million. The facility operator, MagCorp, filed for bankruptcy within months and sold assets to billionaire Ira Rennert’s Renco Group, which created a new entity called US Magnesium.
Two Bankruptcies, Same Playbook
US Magnesium avoided the massive EPA penalties that threatened MagCorp. By 2009, the EPA listed the site as a Superfund site, making federal cleanup mandatory. Documented contamination included highly acidic wastewater, chlorinated dioxins, PCBs, hexachlorobenzene, lead, arsenic, and chromium—pollutants released since at least the 1990s.
On September 15, 2024, exactly 24 years after MagCorp’s bankruptcy, US Magnesium filed Chapter 11 in Delaware with liabilities exceeding $200 million.
The Debt Mountain
Court documents showed at least $95.4 million owed to the top 20 creditors, plus $67 million to Wells Fargo—excluding the EPA’s estimate of well over $100 million needed for cleanup. Nearly $7 million in property taxes went unpaid to Tooele County, almost $1 million in administrative costs to the EPA, and $464,732 in royalties to Utah’s Division of Forestry.
Utah regulators stated US Magnesium “has not been a good steward of the land.”
The Cleanup Fund Failure
A 2021 consent decree required US Magnesium to set aside $16.5 million in financial assurance to protect taxpayers from cleanup costs. The company failed to provide $1.5 million in legally required supplemental funds last year.
As the company enters liquidation, it’s requesting that protective funds be released, further exposing taxpayers to the cleanup burden that the financial assurance was designed to prevent.
The Half-Finished Barrier Wall
The EPA’s containment strategy required a barrier wall to prevent acidic water from seeping into the Great Salt Lake. Construction began in May 2023 with an estimated $10 million cost to protect 1,700 acres. After six months, work stopped.
Colorado contractor Forgen reported that US Magnesium hadn’t paid any invoices. The half-finished wall stands as a reminder of ongoing pollution migration toward Utah’s iconic lake.
The Underground Plume
The facility discharged 630 million gallons of wastewater annually into surface ponds. Johnson estimates that at least two-thirds—over 400 million gallons per year—seeped underground rather than remaining in ponds, creating a contaminated groundwater plume that potentially moves toward the Great Salt Lake.
The EPA installed only a “handful” of monitoring wells along the four-mile waste-pond boundary. Johnson noted a contaminated plume could move toward the lake with relative ease of detection.
Lithium Dreams Lost
Before the shutdown, US Magnesium was preparing to extract lithium-rich brines for use in electric vehicle batteries, positioning itself as a domestic source of critical minerals.
Legal disputes over lease approvals and environmental compliance prevented the project from proceeding, ending the green-energy pivot.
The Insider Sale Strategy
LiMag Holdings, LLC—a new Renco subsidiary—was established on the same day US Magnesium filed for bankruptcy and is proposed as the “stalking horse” bidder. Utah regulators view this as a repeat of the 2001 playbook: file for bankruptcy, sell assets to a related company, discharge debts, and leave cleanup obligations unresolved.
State lawyers stated directly that “the Debtor has gone through this charade previously.”
The Billionaire Behind the Curtain
Ira Rennert, 90, has an estimated net worth of $3.8 billion. In 2013, a jury found Rennert liable for looting assets of the magnesium company to finance a $110 million Hamptons mansion. An appeals court upheld a $213 million judgment.
Renco’s corporate structure—holding companies, subsidiaries, strategic asset transfers—has consistently positioned the parent company at a distance from operational liabilities. The current bankruptcy may continue this pattern.
Utah Fights Back
In December 2023, Utah sued US Magnesium directly, seeking to compel cleanup and revoke the company’s mineral lease on state-owned lakebed. A district judge appointed a receiver to oversee the company’s affairs, later narrowing that role to environmental monitoring as litigation and bankruptcy proceeded.
State regulators made clear: US Magnesium must clean up its operations or lose access to public lands entirely.
Impossible Economics
Internal estimates show $40 million is needed to rebuild and restart magnesium production, plus $30 million to $100 million for lithium operations—on top of the cleanup bill. Combined, the total burden could exceed $240 million, making economic viability questionable while meeting environmental obligations.
Production ceased in late 2021 due to equipment failures, yet contamination and legal obligations continued. Between 2021 and 2024, regulators issued multiple citations for violations.
The Contaminated Blot
Lynn de Freitas, executive director of FRIENDS of Great Salt Lake, described the facility as “a contaminated blot on the landscape, and it’s on a landscape that belongs to all Utahns.” The barrier wall remains unfinished. The toxic plume moves through groundwater with minimal monitoring. Workers face job and pension losses.
The unresolved question: With a bankrupt company, an incomplete containment wall, and an insider asset sale under consideration, will Utah’s taxpayers bear the $100 million cleanup cost?
Sources:
“The country’s biggest magnesium producer went bankrupt,” Grist and Salt Lake Tribune, December 2025
“Legacy Contamination at the US Magnesium Superfund Site,” FRIENDS of Great Salt Lake, 2025
“US Magnesium bankruptcy delays state plans to cut off Great Salt Lake water,” Great Salt Lake News, September 2025
“Case Summary: US Magnesium Chapter 11,” BondOro, September 2025
EPA Settlement and Barrier Wall Documentation, U.S. Environmental Protection Agency, February 2024
“Jury: Billionaire Ira Rennert looted MagCorp,” Salt Lake Tribune Archive