Latrobe Magnesium on track for October production start at Victorian MgO plant

Latrobe Magnesium (ASX: LMG) is on target to achieve the official handover of its stage 1 magnesium oxide (MgO) demonstration plant in Victoria and the start-up of 1,000 tonnes per annum production in early October.

With only ten long-lead equipment items and minor works outstanding in the construction and commissioning of the plant, Latrobe expects to start receiving revenue shortly after the commencement of production.

Completed tasks include a focus on fine-tuning the process plant to enhance operational efficiency and reliability, as well as the successful installation of new recycle and bypass piping that has already reduced potential blockages.

Workforce requirements

Latrobe highlighted that the target completion and transition into operation of MgO production is being driven by the availability of an operational workforce and replacement agitators.

The latter are currently being fabricated with delivery targeted for late August or early September.

To support its workforce requirements, the company is staging two employment forums in the Latrobe Valley in September to outline opportunities for local workers.

Management recruitment

Additionally, Latrobe is proceeding with the recruitment of management personnel to ensure systems and processes are in place before the October restart and is in discussions with two firms to supply contractors for its maintenance and operation activities.

Latrobe’s magnesium production plant will utilise the company’s world-first patented extraction process.

It will extract and sell magnesium metal and cementitious material from industrial fly ash, which is currently a waste resource from the nearby Yallourn brown coal power generation.

Stage 2 plant

Latrobe is progressing site location studies for its stage 2 commercial plant, expected to be confirmed in the coming months.

Latrobe has contracted Snowy Mountains Engineering Corporation to conduct a site location assessment to determine if any alternative sites in the region offer more benefits than the planned Tramway Road location.

This work is expected to be completed by the end of next month, at which point a decision will be made on whether to relocate or proceed with construction at Tramway Road.

Feasibility study

The company is also finalising work with contractor Bechtel on the cost and scope of the stage 2 feasibility study being conducted in Victoria’s Latrobe Valley.

The engineering contractor has been involved in some of the world’s largest projects, including a number of major mining and oil and gas developments in Australia.

The completion of that process will allow for contract execution and the commencement of the works.

Studies on the 100,000tpa Stage 3 international plant in Malaysia are also making good progress.

The company has lodged a federal manufacturing licence and is conducting follow-up discussions with the Malaysian Investment Development Authority while its local subsidiary is progressing through the various project definition stages.

Ferro-nickel slag

The company has engaged a Malaysian environmental consultant to conduct local and comprehensive analyses of the ferro-nickel slag for environmental categorisation.

Previous tests indicate that the material is clean and should comply with Malaysian environmental laws.

The results from the follow-up studies will be presented to the Sarawak government in the lead-up to the granting of a local manufacturing licence.

As part of its aim of creating a “green” project, Latrobe has sought an allocation of 250 megawatts of hydropower from utility Sarawak Energy and is awaiting a response.