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Description and Issues of Mineral Extraction on the Great - Tom Tripp, US LLC MINERAL EXTRACTION PERSPECTIVES MINERAL EXTRACTION PERSPECTIVES

 Disclaimer – This presentation is the work of Tom Tripp and doesn’t imply the official approval or opinion of any of the mineral extractors on the Great (or anyone else)

Cactus on Stansbury Is. THE GREAT SALT LAKE

 Remnant of a inland sea –

 Largest natural lake in USA west of the Great

 Terminal lake with no outlet

THE GREAT SALT LAKE

 Average inflow (surface water, direct precipitation, ground water) = 6 million acre∙ft

 Average outflow = 6 million acre∙ft (by evaporation)

 Mineral content derived from dissolved chemical species in the inflows from a large

MINERAL EXTRACTION ON THE GREAT SALT LAKE

 The of the Lake is obvious to even casual observers

 It is presumed that native populations made use of the salt in the Lake prior settlement

 The lake has been used for salt production from the earliest historic accounts

MOUNTAIN MAN EXPLORERS

Jedidiah Smith Captain Ashley

Jim Bridger PIONEER SALT PRODUCTION EARLY SALT INDUSTRY

 Salt companies formed on the Great Salt Lake as early as 1870  Jeremy and Co -1870  Inland Salt Co - 1890  Inland Crystal Salt – 1891  Intermountain Salt – 1892  Diamond Salt – 1901  Maybe six others MINERAL EXTRACTION ON THE GREAT SALT LAKE

 What is the current state mineral extraction on the lake? MINERAL EXTRACTION ON THE GREAT SALT LAKE

 There are four major mineral extraction operations on the Great Salt Lake:  Great Salt Lake Minerals  Morton Salt US Mag  Salt  US Magnesium  A couple of minor enterprises MINERAL PRODUCTS FROM THE GREAT SALT LAKE

 Cargill Salt  Located at Timpie, Tooele County  Sodium  Kiln dried  Water softener  Agricultural blocks  Technical grade

 Cargill ships almost all of its product out of the State

MINERAL PRODUCTS FROM THE GREAT SALT LAKE

 Morton Salt  Located at Southeast end of Stansbury Is. Tooele County   Road salt  Kiln dried  Water softener  Agricultural blocks  Technical grade  Morton’s presence on the GSL goes back to at least 1915

MINERAL PRODUCTS FROM THE GREAT SALT LAKE

 Great Salt Lake Minerals  Located in Weber County near Bear River Bay

 Products include:

Sulfate   Solutions  Prills  Sodium Chloride  Sodium sulfate

 Great Salt Lake Minerals Corporation (GSL) is the largest producer of sulfate of potash (SOP) in North America.

MINERAL PRODUCTS FROM THE GREAT SALT LAKE

 US Magnesium LLC  Located in Stansbury Basin, Tooele County  Products include:

 Magnesium metal  (liquid)  Magnesium chloride  Calcium chloride  Sulfate (raw)  Sodium chloride (raw)  Iron (byproduct)

 Only primary magnesium production facility in North American  Supports ATI titanium operation with Mg

MINERAL EXTRACTION ON THE GREAT SALT LAKE

 What makes the Great Salt Lake naturally attractive for mineral extraction?  Abundance and composition of mineral content  Weather patterns favorable to evaporative concentration  Shallow lake bed geography facilitates evaporation impoundments  Access to infrastructure, transportation and populations centers GREAT SALT LAKE - MINERAL CONTENT

 Nominal Composition (south arm) of the water in: GSL Ocean Water  Chloride (Cl-) 8.2% 1.9%  Sodium (Na+) 5.1% 1.08% +2  Sulfate (SO4 ) 1.1% 0.091%  Magnesium (Mg+2) 0.5% 0.13%  Potassium (K+) 0.3% 0.04%  Calcium 0.006% 0.04%

 Nominally about 4-5 times the salinity than sea water FAVORABLE WEATHER PATTERNS

 A long net evaporation period is mid-March to early October

 Low humidity and in frequent summer precipitation aid evaporation

 Net evaporation is about 50 inches of water

 At US Mag during the hottest part of the evaporative season, daily average evaporation reaches 750,000 gallons/minute

 Magnesium derives +95% of it energy input from solar energy LAKE BED GEOGRAPHY

 In general the Great Salt Lake is shallow with gently sloping floors

 Appropriate evaporations ponds can be constructed with simple engineering

 In many areas there are impermeable clay layers that limit vertical seepage rates

 Areas surrounding the lake provide granular fill for solar pond dike construction ECONOMIC IMPACT OF GSL MINERAL EXTRACTION IN

 Jobs provided*  Direct – 1,967  Indirect – 3,400  Total – 5,638

 Wages paid*  Direct – $168 million  Indirect – $141 million  Total – $309 million

 *Derived from “Economic Significance of the Great Salt Lake to the State of Utah” prepared for the Great Salt Lake Advisory Council by Bioeconomics Inc., January 2012

ECONOMIC IMPACT OF GSL MINERAL EXTRACTION IN UTAH

 Total Economic Output*  Direct – $685 million  Indirect – $446 million  Total – $1,131 million

 85% of the economic impact from the lake is derived from the mineral extraction industries

 *Derived from “Economic Significance of the Great Salt Lake to the State of Utah” prepared for the Great Salt Lake Advisory Council by Bioeconomics Inc., January 2012

MINERAL EXTRACTION - GSL ISSUES

 What Every Business Wants: Certainty

MINERAL EXTRACTION - CERTAINTY

 Long term arrangements that allow confidence for investment  Access to land/ponds  Access to raw materials  Water  Mineral content  Constancy in regulatory requirements

MINERAL EXTRACTION - CERTAINTY

 There are plenty of uncertainty for the mineral extraction industries:  Can’t guarantee weather  Can’t guarantee markets or competition  Can’t guarantee energy costs  Or a host of other things MINERAL EXTRACTION - GSL ISSUES

 What Else Does Every Business Wants:

Equity/Understanding MINERAL EXTRACTION - FAIRNESS

 Industry understands that:  The Lake ownership was granted to the State for the benefit of the citizens

 The Lake is managed for multiple uses

 There are many classes of Lake shareholders with various priorities

 Mineral extraction is a legitimate shareholder that has existed for a long time on the Lake with demonstrated benefits and impacts MINERAL EXTRACTION - FAIRNESS

 Many of the issues to be solved at the Great Salt Lake can only be addressed as watershed issues  Because the mineral extraction facilities are visible, they are a shareholder unfairly expected to solve problems alone while other “upstream” shareholders are not asked to share a burden.  Substantial royalties and lease fees from mineral extraction benefit FFSL restoration in upland areas. MINERAL EXTRACTION – LAKE LEVEL

 Elevation of the Lake is important to mineral extraction industry  There is no certainty on this issue. It is dependent on climate trends and upstream water users  Extreme (natural) swings in lake level are hard to affect  Late 1200’s the lake went dry  Around 1700 the lake naturally flowed to the west

MINERAL EXTRACTION – LAKE LEVEL

 Industry generally supports a State strategy on Lake elevation control

 Infrastructure, both public and private, are jeopardized at high levels

 Access to Lake water/minerals is affected at low lake levels MINERAL EXTRACTION – SALINITY

 The railroad dividing the lake has resulted in a migration of minerals to the North arm of the Lake  Part of the mineral industry looks at this as an injustice  Another part of mineral industries considers the concentrated North arm a mineral treasure to be preserved MINERAL EXTRACTION ON THE LAKE

 The extraction industries on the Lake are diverse long standing enterprises  They are unique in the country and world  They materially contribute to the State’s economic well being and coffers  They are cooperative and respected in local and State government  They desire to be good partners with other Lake share holders

MINERAL EXTRACTION PERSPECTIVES

Thank You for your attention!