US Magnesium in jeopardy

ROWLEY, Tooele County — US Magnesium has survived a round of bankruptcy, its share of bad press and even a flood.

But officials at the nation's last primary producer of magnesium say now they are facing a fight for their company's life thanks to cheap foreign imports and high energy costs.

Once recognized as the nation's largest emitter of toxic chemicals, US Magnesium, a wholly owned subsidiary of New York-based Renco Group Inc., today is a different place, no longer ranking among the nation's top 50 polluters.

That is largely due to the company's modernization efforts, which have resulted in more than $50 million in new technologies and controls added to its facility, located about 75 miles west of downtown Salt Lake City on the western shores of the Great Salt Lake.

Yet foreign imports of magnesium into the United States from China and Russia have nearly derailed the company's progress.

In March, the U.S. International Trade Commission determined that imports of pure magnesium from Russia and alloy magnesium from China and Russia were materially injuring U.S. producers.

Lee R. Brown, vice president of contracts at US Magnesium, said the ITC decision will go a long way toward ensuring the company's future and preserving the plant's 420 jobs.

"The Chinese 12 years ago were almost non-existent producers," Brown said. "Now they produce the vast majority of magnesium in the world."

Magnesium, a metal used in the manufacturing of automobile parts, aluminum cans, power tools and other consumer goods, is a vital industry, Brown said, that deserves more attention.

"That's the danger in abandoning this industry and just giving it to the Chinese," Brown said. "Once you've created a monopoly, you've given them control of what you are going to pay."

The U.S. spot price of magnesium on Aug. 1 was roughly $1.40 to $1.50 per pound, according to Platts Metals Week. However, the price has fallen as low as $1 per pound, Brown said, due to the flood of imports from China and Russia.

In addition to foreign imports, Brown said, energy prices have taken a toll on the industry. Electricity prices paid by US Magnesium have increased 60 percent since 2001. Natural gas prices since that time have skyrocketed by 300 percent.