Latrobe Magnesium awards PFS study for second plant using ferronickel slag

Latrobe Magnesium ASX LMG Bechtel pre-feasibility study
Bechtel has been awarded a contract to conduct the pre-feasibility study for Latrobe Magnesium's second magnesium metal project.

Latrobe Magnesium (ASX: LMG) has issued a contract covering the pre-feasibility study (PFS) for its second magnesium metal project to global engineering and construction company Bechtel.

This plant, to be built at a yet undecided foreign location, will have a production capacity of 100,000 tonnes per annum and will use ferronickel slag as its feedstock. 

It is expected to boost the company’s output more than tenfold, which is currently at 10,000tpa from the development getting underway in Victoria which is to produce magnesium metal from fly ash, a waste by-product of the giant, 1,480-megawatt Yallourn power station that burns brown coal.

After completion of the PFS, Latrobe Magnesium will hold discussions with potential joint venture partners.

New project expected to generate $1 billion in revenue

Latrobe has finalised discussions with a ferronickel producer for supply of 12 million tonnes of slag over 12 years.

A binding memorandum of understanding with this supplier is expected to be signed this month. 

The company’s timeline is to be in production in Victoria by 2024, initially producing at the rate of 1,000tpa of magnesium, then being expanded to 10,000tpa. 

The company plans to sell refined magnesium under long-term contracts to United States and Japanese customers. Victoria is expected to generate $100 million in revenue. 

In 2026 Latrobe expects have the bigger 100,000tpa plant in operation, with revenue of $1.014 billion.

Magnesium best structure to weight ratio

The overseas location of the second plant will be decided upon during the PFS process.

Latrobe has also appointed London and Dubai-based consultants Jasper Consult to approach potential joint venture partners.

The PFS study is due to be completed by the end of 2022, at which stage it will be released to those potential partners.

Latrobe describes magnesium as having the best strength-to-weight ratio of all common structure metals and is increasingly being used in the manufacture of car parts, laptop computers, mobile phones and power tools.

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