Essential US manufacturing company files Chapter 11 bankruptcy

Most Americans know very little about magnesium. 

In fact, they may be more aware of it as a health supplement that purportedly helps bone and heart health, along with a long list of supposed benefits. 

Magnesium, however, has been named a "critical mineral" by the United States government. The U.S. Dept, of Energy shared some of the reasons. 

Key reasons for magnesium's critical status:

• Defense and Aerospace Applications: Magnesium alloys are used in the construction of aircraft, missiles, and other defense equipment. Their lightweight and durable properties enhance performance and efficiency.
• Energy Sector Importance: Magnesium is integral to various energy technologies, contributing to advancements in energy production and storage solutions.
• Supply Chain Security: The U.S. Geological Survey's Critical Materials List highlights magnesium's significance, prompting initiatives to ensure a stable domestic supply and reduce reliance on foreign sources.

"The U.S. Department of Defense has recognized the strategic importance of magnesium by investing in domestic production capabilities. For instance, a $28 million partnership was formed to develop technology for producing magnesium from seawater, aiming to re-establish primary magnesium production in the U.S. for the first time in 40 years," according to The Department of Energy's Energy.gov.

Key magnesium provider has filed Chapter 11 bankruptcy 

US Magnesium, a key producer of chemicals, lithium, and magnesium critical to United States defense efforts, has filed for Chapter 11 bankruptcy after a dispute with the state of Utah.

The filing comes after Utah's Division of Forestry, Fire & State Lands said it was seeking to terminate the company's leases to operate in the state. Utah has blamed the company US Magnesium for pollution, based on an academic review.

US Magnesium shared a statement along with its Chapter 11 filing, saying that it entered bankruptcy to "provide a framework to preserve the value of our business, honor our commitments to employees and partners, [and] continue our longstanding commitment to environmental stewardship while being a key domestic supplier of critical minerals for many years to come."

The U.S. government has been clear on the problem the country faces when it comes to critical minerals.

"Over 80% of our nation’s supply of critical minerals comes from foreign sources, and the United States currently imports over half of its consumption of 43 of the 50 critical minerals and metals," Energy.gov shared. 

Why US Magnesium filed Chapter 11 bankruptcy

Creditsafe Head of Brand Ragini Bhalla shared some data with TheStreet that sheds additional light on US Magnesium's financial condition. 

"US Magnesium’s payment behavior over the past 12 months highlights the mounting financial pressures that contributed to its bankruptcy. Days Beyond Terms (DBT), or the number of days late a company pays its suppliers, shows how severely strained cash flow is," she shared.

• According to Creditsafe data, the company’s DBT was already high in September 2024 (79), meaning suppliers were paid nearly three months late. 

"While US Magnesium’s DBT temporarily improved between January and April 2025 (staying around 31 to 39), this didn’t last long. The company’s DBT jumped again –nearly doubling from 48 in May 2025 to 81 by August 2025. This pattern of persistently late payments (often upwards of two months late) signals chronic liquidity challenges and suggests US Magnesium was struggling to balance its financial obligations," she added. 

More US Magnesium numbers

In the months before its collapse, US Magnesium was forcing suppliers to shoulder increasing credit risk and damaging its own supplier relationships," Bhalla shared. 

US Magnesium’s historical payments show a steady deterioration in its ability to manage obligations, with late payments growing more severe as bankruptcy approached. 

• 16.95% of the company’s outstanding bills were 91+ days late. 
• This figure drastically increased over the next six months – rising to 58.80% in March 2025 and then to 59.02% in April 2025. 
• But what’s most telling is that over 93% of its bills fell into the 91+ days late category between May and August 2025.

"It’s clear that what began as manageable short-term payment delays in late 2024 escalated into severe, prolonged non-payments in the first half of 2025," Bhalla wrote. "US Magnesium’s bankruptcy stems from a mix of financial, environmental, and regulatory pressures." 

The company filed for Chapter 11 bankruptcy with roughly $200 million in liabilities, after Utah regulators moved to revoke its leases over longstanding pollution concerns. Bhalla made it clear that US Magnesium's problem run deep. 

"Beyond environmental litigation, US Magnesium has faced several challenges, including global oversupply, customer losses, equipment failures and an ill-timed $400 million expansion into lithium carbonate production that was later idled due to collapsing prices. While management maintains that bankruptcy is a tool to preserve operations and restructure the business, the filing raises wider concerns. As the only primary magnesium producer in the U.S., its collapse would heighten dependence on imports from China and Russia."

Related: Iconic convenience store brand closed 100s of locations

Key US Magnesium Chapter 11 bankruptcy facts

US Magnesium filed for Chapter 11 bankruptcy protection in the District of Delaware court, according to a filing.

• Filing date: September 10, 2025
• Court: U.S. Bankruptcy Court for the District of Delaware
• Type: Voluntary petition under Chapter 11
• Estimated assets and liabilities: Both in the range of $100 million to $500 million
• Equity ownership: The Renco Group, Inc. holds 100% of the equity interest.

Source: U.S. government

US Magnesium shares official statement

US Magnesium shared an official statement with TheStreet after its bankruptcy was first made public.

"US Magnesium LLC (USM) today announces its voluntary filing for Chapter 11 protection in the United States Bankruptcy Court for the District of Delaware.

This decision, reached after careful consideration, reflects our ongoing commitment to responsibility, integrity, and long-term sustainability as we navigate an accumulation of significant challenges.

Since 2002, USM has served as the only primary North American magnesium producer, extracting resources responsibly from the Great Salt Lake at our Rowley, Utah facility. Given the resources and technological capabilities of USM, it is uniquely positioned to be an important domestic supplier of critical minerals such as magnesium and lithium.

Over the past decade, however, the company has confronted a series of profound disruptions: global oversupply and offshore dumping that drove prices to historic lows; the 2016 closure of a major customer, Allegheny Technologies Rowley plant; and essential equipment failures coupled with the COVID-19 pandemic, which triggered force majeure events and required us to idle magnesium operations.

In response, we pursued diversification into lithium carbonate production, building a new lithium carbonate plant, the first of its kind in the United States, applying advanced technology to our raw material feedstock.

Through support from our ownership, we invested more than $400 million in support of this effort and USM’s operations. However, an 80% decline in lithium carbonate prices and operational challenges coupled with changing regional water policies and an ongoing regulatory assault over the last two and a half years has compelled us to pause these operations."

Related: Critical American manufacturing giant filed Chapter 11 bankruptcy