Latrobe Magnesium to accelerate production start-up with new oxide strategy

Latrobe Magnesium (ASX: LMG) has devised a strategy to help accelerate the commencement of production and sales at its Victorian magnesium project.

Following confirmation in recent months that commissioning at its Latrobe Magnesium project has been delayed due to unforeseen external circumstances, the company’s project team has devised a plan to focus on the delivery of the hydromet areas needed to produce magnesium oxide (MgO) as an initial product.

A feedstock into the main magnesium production line, magnesium oxide is also a saleable product and may provide the company with an opportunity to bring in early cash while also proving Latrobe’s patented process.

Strategically focused on early production

Latrobe’s chief executive officer David Paterson said the company is now strategically focusing on bringing forward the development of the areas that will be utilised in the production of magnesium oxide as soon as possible.

The current stretch target is for the end of the year, with a focus on the ash handling, leaching, spray roasting and magnesite areas.

As part of the updated development path, the project team is making slight modifications to the flowsheet to install piping changes and the installation of a bagging plant to produce one tonne bulk bags of magnesium oxide that can then be sold to customers.

Proving the patented process

“The advantage of this strategy is that it allows Latrobe to prove its patented hydromet process sooner. Latrobe’s primary intellectual property pertains to the extraction of magnesium metal from brown coal ash, as well as the subsequent precipitation of marketable, saleable byproducts, constituting the initial phases of our operational process leading to the production of magnesium oxide,” Mr Paterson said.

“This strategy will demonstrate Latrobe’s unique, world-first hydromet process can be operated successfully and prove to shareholders, investors, community, and the government, and all stakeholders the true value of Latrobe’s intellectual property.”

MoU signed for magnesium oxide sales

To support the early magnesium oxide strategy, Latrobe has already executed a memorandum of understanding (MoU) with Western Australia headquartered Rainstorm Dust Control, which utilises the product in its operations on both the eastern and western seaboards.

Latrobe has offered preferential access to Rainstorm for the purchase of all magnesium product at a mutually beneficial price as and when such material is available.

The agreement will also apply to the extent that Latrobe cannot consume all the magnesium oxide that it produces.

Latrobe adapts construction schedule

To facilitate the new plan and to support magnesium oxide production and sales, Latrobe is adjusting the commissioning plan to refocus on initial magnesium oxide production.

Plans are in place to reschedule the commissioning of the reduction furnace area, the furnace automation and vacuum system.

This will then be the second phase of the plant to be fully commissioned.

Latrobe said this strategy will allow operations personnel to familiarise themselves with the flowsheet whilst at the same time generate revenue.

The commissioning team is attending factory acceptance tests for the furnace automation to ensure improved understanding of the automation systems and the commissioning procedures required.

Coregas and Origin sign supply contracts

In another milestone for the project, Coregas and Origin have been named as key product suppliers to the project.

Part of the Wesfarmers Group of companies, Coregas tendered the winning bid to supply oxygen, argon and carbon dioxide to the project.

This product shall be supplied both in bulk (oxygen and carbon dioxide) and in cylinder ‘man-packs’ (argon).

Coregas is currently working to complete the installation of the respective storage facilities.

Elsewhere, Latrobe is partnering with Origin LPG for the supply of liquid petroleum gas to the demonstration plant.

Origin LPG is scheduled to commence work with the design and install of the new storage facility targeted for completion in Q4 2023.

It will exclusively manage and supply all of Latrobe’s LPG requirements throughout the project.