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 U.S. Magnesium for pollution, based on an academic review.

“The study from the Cooperative Institute for Research in Environmental Sciences came from a period of winter air pollution in 2017 and showed that the plume from the U.S. Magnesium refinery along the Great Salt Lake produced ’emissions of chlorine and bromine, known as halogenated compounds, [and] were significant contributors to the persistent winter brown clouds,'” Fox 13 reported.

And, while the report is now eight years old, its author, Carrie Womack, said the emissions of chlorine have not shown any significant decline in the last five years.

Key U.S. Magnesium environmental study findings:

• Models showed that chlorine and bromine emitted by the refinery were responsible for 10-25% of the area’s particulate matter during pollution episodes.
• Winter pollution levels of PM 2.5 in the Salt Lake Valley exceed national air quality standards an average of 18 days per year.

“Particulate matter contains microscopic solids or liquid droplets that are so small that they can be inhaled and cause serious health problems. Particles less than 2.5 microns in diameter, also known as fine particles or PM 2.5, pose the greatest risk to health, affecting both lungs and your heart,” the study shared.

U.S. 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.”

Magnesium is a critical mineral, according to the U.S. government.

Image source: Pixabay

Why U.S. Magnesium matters

The U.S. government uses magnesium in a number of different areas and has declared it a critical mineral on the Federal Register.

“The U.S., for example, imports over 54% of their magnesium requirements. And they’re looking for something that’s safe and secure, and preferably onshore in North America, which we are,” West High Yield Resources Director Barry Baim told Investing News Network.

He noted that both the U.S. government and many American companies need the mineral.

“Magnesium is one of the identified critical minerals, or metals that you may have read about in recent news the last couple of years, and it’s very much come to the forefront with all of the geopolitical froth going on in the world,” he added. 

What U.S. Magnesium means to the U.S.

Critical production

• U.S. Magnesium is the only primary producer of magnesium metal in the United States.
• Magnesium is a critical mineral designated by the U.S. government because of its importance to the defense, aerospace, automotive, and energy sectors.
• Without U.S. Magnesium, the U.S. would be heavily dependent on imports (primarily from China and Russia), raising supply-chain and national-security concerns.

National security & defense applications

• Magnesium is lightweight and strong, making it essential in military vehicles, aircraft, missiles, and electronics. 
• The Pentagon has highlighted magnesium as vital for defense readiness, and U.S. Magnesium’s production in Utah helps ensure domestic supply.

Industrial & commercial uses

• Magnesium alloys are widely used in:
  • Automobiles (for fuel efficiency & EV range)
  • Aerospace (airplane parts, missiles, helicopters)
  • Electronics (laptops, smartphones, cameras)
  • Energy (wind turbines, batteries, hydrogen storage research)

Geopolitical importance

• The U.S. government has flagged the risk of overreliance on Chinese magnesium (China produces 85% of the world’s supply).
• U.S. Magnesium’s domestic operations provide supply chain resilience against global disruptions, trade restrictions, or sanctions.

The U.S. needs magnesium

President Donald Trump has called on American companies to manufacture items including magnesium.

“Our national and economic security are now acutely threatened by our reliance upon hostile foreign powers’ mineral production. It is imperative for our national security that the United States take immediate action to facilitate domestic mineral production to the maximum possible extent,” he said in an official White House release.

Key U.S. Magnesium Chapter 11 bankruptcy facts

U.S. 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. 

Related: Another major Tesla EV rival faces Chapter 11 bankruptcy