A steel pot used as crucible in a magnesium alloy foundry developed a leak that resulted in a fire and caused extensive damage. Hypotheses as to the cause of the leak included a defect in the pot, overuse, overheating, and poor foundry practices. Scanning electron microscopy, transmission electron microscopy, optical microscopy, and x-ray microanalysis in conjunction with dimensional analysis, phase diagrams and thermodynamics considerations were employed to evaluate the various hypotheses. All evidence pointed to an oxide mass in the area where the hole developed, likely introduced during the steelmaking process.