Latrobe Magnesium prepares for commercial launch as production begins from demonstration plant

Latrobe Magnesium (ASX: LMG) is set for a major milestone with the start-up of early-stage magnesium oxide (MgO) sales from its demonstration plant project in Victoria.

The company’s project and construction teams have completed the fast-tracked construction of the plant areas required to produce one-ton bulk bags of MgO in preparation for the start of commercialisation.

Latrobe is using the bagging plant to help demonstrate its patented, world-first hydromet process to all stakeholders.

LMG intends to sell the MgO produced in the initial phase to Rainstorm Dust Control under an existing memorandum of understanding, prior to the production of magnesium metal.

Fly ash processing is ongoing through the Latrobe demonstration plant in the lead-up to MgO production.

Demonstration plant progress

Work on the remainder of the demonstration plant is continuing with the construction and commissioning of the briquetting system, reduction furnace area, the furnace automation and vacuum system.

The second phase of the plant will then be completed and commissioned, with magnesium metal targeted for Q3 2024.

Contractor Tenova’s supervisors mobilised in February to progress the commissioning of the spray roaster, which continues to be a key item on the project’s critical path.

Latrobe’s construction team has successfully completed the installation of the roaster, including all mechanical, piping, electrical and instrumentation items and cabling.

Hydromet construction

Construction of the hydromet area is complete, with all major mechanical, piping and electrical equipment fully installed and commissioned.

Only minor punch list items remain, with thickeners, tanks, pumps, agitators, heat exchangers, piping, valves, cabling, instrumentation, junction boxes and all terminations to motor control centres ready for final ore commissioning.

Local Latrobe Valley company Traralgon Industries has completed the installation of personal protection insulation and cladding on certain piping and tanks for operator safety.

The project’s commissioning team was dramatically increased during the quarter, with up to 20 personnel assigned to complete all commissioning checks in preparation for the first magnesium oxide production.

Corporate activity

In its March 2024 quarterly report, Latrobe confirmed that the Australian Taxation Office continues to review the company’s research and development tax rebate for the 2023 financial year.

This follows the submission of additional information on 17 April, with the potential rebate amounting to $12.6 million.

Elsewhere, Latrobe has appointed Société Générale as the sole co-ordinator and structuring bank for the development and construction of the Stage 2 commercial 10,000-tonne per annum magnesium plant.

Latrobe’s strategic supplier program for its Stage 2 commercial plant is designed to fast-track its development ahead of production in 2026.