An impression of the magnesium plant going ahead in Hazelwood North. file photographPHILIP HOPKINS
By PHILIP HOPKINS
LATROBE Magnesium Ltd has signed an upgraded exclusive distribution agreement with Metal Exchange Corporation (MEC) to sell the majority of its magnesium into North, Central and South America and the Caribbean markets.
Latrobe’s chief executive, David Paterson, said the contract would deliver excellent prices to LMG due to a US anti-dumping duty payable on magnesium imports from China.
“This 2019 initial agreement between the parties has been upgraded because of LMG’s current expansion plans to its demonstration plant and expanded 10,000+ tonnes per annum capacity,” he said.
The agreement now includes:
A minimum firm commitment of 8000 tpa of magnesium;
A minimum initial term with a rolling annual renewal, and;
A minimum floor price for the purchase of the magnesium.
Latrobe Magnesium is developing a magnesium production plant in the Latrobe Valley using its world first patented extraction process.
LMG intends to extract and sell magnesium metal and cementitious material from industrial fly ash, which is currently a waste resource from Yallourn brown coal power generation. Construction of the demonstration plant has begun.
The company previously had negotiated with Hazelwood power station before its closure.
Metal Exchange Corporation is headquartered in St Louis, Missouri.
Founded in 1974, MEC has grown from a regional aluminium scrap company to a global corporation with international offices in Switzerland and China.
North and Central America consume more than 160,000 tonnes of magnesium per annum, and this is projected to increase with greater use of magnesium by the motor vehicle industry.
There is only one magnesium producer in the USA, which is currently undergoing a capital refurbishment and has been mostly out of commission since 2021.
Consequently, the majority of magnesium is imported.
Mr Paterson said that with exports from China banned for a period in September 2021, USA magnesium users had been searching for alternative magnesium suppliers.
“Some have moved away from primary high grade magnesium and turned to lower grade magnesium and recycling. The US anti-dumping duty on imported China magnesium means that the USA magnesium price is frequently twice the FOB China magnesium price, mainly due to the anti-dumping duty placed on most imports from China of 141.49 per cent,” he said.
Under the US-Australia free trade agreement, magnesium produced in Australia is exempt from any import duty. LMG proposes to sell up to 80 per cent of its production into the Americas.
LMG has completed a feasibility study validating its combined hydrometallurgical/thermal reduction process that extracts the metal.
Construction has begun on its initial 1000 tonne per annum magnesium plant, with commissioning targeted to start at the end of second quarter this year.
All going well, a commercial plant will then be developed, with a capacity of more than 10,000 tonne per annum magnesium, shortly thereafter.
Further plant capacity expansion will be considered once the 10,000 tonne per annum is operating successfully.
The plant, in the heart of the Valley’s coal power generation precinct, provides immediate access to feedstock, infrastructure and labour.
The 100 years of tailing dumps is virtually an unlimited resource.
LMG plans to sell the refined magnesium under long-term contracts to USA and Japanese customers. Currently, Australia imports 100 per cent of the 8000 tonnes annually consumed.
Magnesium has the best strength-to-weight ratio of all common structural metals and is increasingly used in the manufacture of items such as car parts, laptop computers, mobile phones, and power tools.
Mr Paterson said the LMG project was at the forefront of environmental benefit, by recycling power plant waste and avoiding land fill, and was a low emitter of carbon dioxide.
“LMG adopts the principles of an industrial ecology system,” he said.
