Latrobe Magnesium shores-up ferro-nickel supply for 100,000tpa magnesium plant with SLN MoU

Latrobe Magnesium (ASX: LMG) is shoring-up supply for its proposed 100,000-tonne-per-annum magnesium plant after announcing it has inked a binding memorandum of understanding with Société Le Nickel (SLN).

Under the deal, SLN will supply 450,000tpa of ferro-nickel slag for 20 years.

Latrobe plans to use it as feedstock for its plant, which once at full capacity will require about 600,000tpa of ferro-nickel to produce the 100,000tpa of magnesium.

SLN’s ferro-nickel comprises 33% magnesium oxide, 55% silicon, and 9% iron oxide.

According to Latrobe, from this feedstock it has been able to generate magnesium, high-grade amorphous silica, hematite and its supplementary cementitious material.

Latrobe noted this feedstock produced twice the magnesium oxide content that using the Yallourn brown coal fly ash that it is using for its initial 1,000tpa and 10,000tpa plants in Victoria.

“This means that Latrobe can process less material to achieve the same amount of magnesium when compared to fly ash,” the company explained.

Around 10t of fly ash is required to generate 1t of magnesium, whereas 6t of SLN’s ferro-nickel slag can make 1t of magnesium.

SLN owns one of the world’s largest ferro-nickel plants and produces 1.7Mt of the material a year. It has a 28Mt slag heap in New Caledonia. The island is home to about 20% of the world’s known nickel reserves to underpin many years of future production.

Pre-feasibility study for plant

In readiness for the 100,000tpa magnesium plant, Latrobe has engaged global engineering, construction and project management company Bechtel to carry out a pre-feasibility study.

Bechtel will evaluate options to develop the 100,000tpa plant and will select from two overseas locations: the Middle East and South East Asia.

The study is expected to be completed by the end of the month.

As part of its plans to develop the 100,000tpa facility, Latrobe is in discussions with potential joint venture partners.

Latrobe has created a proprietary extraction process and is developing an initial 1,000tpa plant in Victoria’s Latrobe Valley.

This plant will use industrial fly ash as feedstock, which is waste material from the nearby Yallourn brown coal power facility.

Commissioning of the 1,000tpa plant is scheduled for Q2 2023, which will pave the way for a 10,000tpa magnesium production facility to be constructed.

Latrobe will sell the magnesium under long-term contracts to US and Japanese customers.