Latrobe Magnesium officially selects Sarawak, Malaysia for 100,000tpa magnesium plant
Latrobe Magnesium (ASX: LMG) has officially selected Malaysia’s state of Sarawak to build its 100,000 tonne per annum magnesium plant.
The company’s board has approved the Samalaju Industrial Park in Sarawak as the location for the proposed plant after a review of its available infrastructure.
One of the main advantages of Samalaju is the local production of ferrosilicon, which is one of the proposed plant’s largest reagent requirements.
The area also has proximity to a modern bulk handling port that is capable of importing and exporting 7Mtpa of bulk products with a planned expansion to 18Mtpa.
Samalaju also has access to supporting industries and services through the nearby town of Bintulu, which has a population of 300,000.
The large population provides access to skilled employment at Samalaju and also supports the nearby Petronas liquified natural gas (LNG) complex, which is among the largest in the world.
Latrobe noted the most important advantages of the chosen location was the presence of hydroelectric power generation.
This would mean the plant could operate 100% on renewable power.
According to Latrobe, discussions with Sarawak Government ministry officials and authorities were “well advanced” in relation to a 40 hectare site within the Samalaju park.
The company plans to “immediately” begin the land application process to secure the area.
In selecting Samalaju, Latrobe also looked at Ras Al Khair in Saudi Arabia, and Duqm in Oman as potential places for the plant.
When investigating the technical, financial, estimated capital expenditure requirements, risk and investment scenarios, Latrobe said Samalaju was a “clear leader”.
The company will complete a pre-feasibility B study to evaluate the financial return of the 100,000tpa plant based on the revenues and costs with Samalaju as the location.
Additionally, Latrobe noted it had already received “favourable reactions” from potential financiers during discussions on the proposed plant.
“The selected location offers Latrobe the opportunity to deliver a project that will offer significant returns to shareholders as well position Latrobe to be the world’s cleanest and largest magnesium producer, by volume,” Latrobe chief executive officer David Paterson said.