Compass Minerals International Inc (CMP)

Compass Minerals International Inc (CMP) stock declined by 17.09% due to an announcement from Compass Minerals regarding the U.S. Forest Service's (USFS) decision not to enter into a contract for the use of magnesium chloride-based aerial fire retardants for the 2024 fire season.

• Reason for USFS Decision: During scheduled winter airtanker inspections as part of the USFS’ Integrated Operational Field Evaluation (I-OFE), it was discovered that certain airtankers that had flown Fortress North America’s (Fortress’) proprietary, magnesium chloride-based aerial fire retardants revealed significant signs of corrosion in areas where build-up of the retardant had occurred. This raised aircraft safety concerns, prompting the USFS' decision.
• Company Response: Compass Minerals' President and CEO, Edward C. Dowling Jr., expressed disappointment with the findings but emphasized the company's commitment to safety. They are working collaboratively with the USFS, National Transportation Safety Board (NTSB), and National Institute of Standards and Technology (NIST) on a more detailed assessment. Based on this new information, it is assumed that Fortress’ magnesium chloride-based aerial fire-retardant formulation will not be utilized for the foreseeable future in the fight against wildfires.
• Prior Achievements and Future Plans: Fortress became the first new company in over two decades to have long-term aerial fire retardants added to the USFS’ Qualified Product List (QPL) in December 2022. They had entered into a contract with the USFS in May 2023 to provide up to five mobile-deployed fire-retardant air tanker bases during the 2023 wildfire season and were negotiating a contract for the 2024 season before the corrosion concerns arose. The company is now working to achieve full qualification of proprietary, non-magnesium chloride-based aerial fire-retardant products.