Latrobe Magnesium starts ore commissioning at Stage 1 demonstration plant

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By Imelda Cotton - 
Latrobe Magnesium ASX LMG demonstration plant Progress Report

Latrobe Magnesium (ASX: LMG) has begun ore commissioning at its Stage 1 demonstration plant in Victoria’s Latrobe Valley.

First ash delivery was achieved following a number of delays caused by minor leaks from pipes, replacing failed valves, updating control logic sequencing, vendor software issues and replacement of lubrication fluids.

Each of the issues has since been addressed and the demonstration plant will now be further tested and ramped up.

Acid addition is expected early next week and heating of the spray roaster ahead of magnesium oxide production will take place in the coming days.

Ongoing discussions

Meanwhile, Latrobe is continuing financing and development discussions for the construction of a Stage 2 commercial magnesium plant in the Latrobe Valley with a 10,000 tonnes per annum production capacity.

The company intends to target debt funding from a variety of sources including government and commercial lenders, with the majority expected to come from Australian federal government initiatives that fund critical minerals projects.

The funding will be further supported by a 10,000tpa offtake deal secured with US-based Metal Exchange Corporation.

Latrobe has appointed French investment bank Société Générale SA as sole coordinator, structuring bank and mandated lead arranger to manage all financing arrangements.

The bank has significant experience in structuring, advising and financing mining and downstream metals production projects in Australia and worldwide.

Magnesium extraction

Latrobe intends to extract and sell magnesium metal and cementitious material from industrial fly ash, currently a waste resource from Yallourn power station.

The 1480-megawatt brown coal plant is slated for closure in mid-2028.

Latrobe has an agreement with Yallourn to supply its demonstration plant with industrial fly ash.

The company believes there will be enough ash produced over the next four years to supply feedstock to the commercial plant for two decades.

Feasability study to come

GHD has been contracted to assess the fly ash deposit from a hydrogeological and geotechnical perspective.

It will also complete a detailed rehabilitation and mine closure study and develop a mine design for incorporation into a detailed schedule and cost study.

The work will provide the scope and cost inputs for a bankable feasibility study for the Stage 2 commercial plant and will ensure a final investment decision can be made before year end.