Ann: LMG IMARC 2023 Presentation, page-24

Hi Ken,

Apologies – I finally got tothis. I have been off grid since last Friday – been camping up the DaintreeForest out of internet mobile phone range.

Only looking at the Major Inputs column.
Tick for fly ash supply.

The next three "Major Inputs" I havenever thoughts about. Are the all contained within fly ash and ferro nickleslag?

Firstly, A few things to point out re the Hydrometprocess and associated patents. Patents for Australia, Europe, the United States andIndonesia were granted in August 2011 for a total of 20 years. A patent tocover India was granted in 2019. So, the patent runs out in 2031. LMG willstill retain an advantage in patent expiry because they will have the know-howin its use and application which any competitor would have to develop – eitherthem selves or poaching LMG staff.

Re the role of the 3 additives, Ican’t find much technical info on the hydromet process, so I have to dig backinto my memory from decades ago when I was a practicing industrial chemist.

The hydromet process uses acid todissolve the Mg out of the fly ash(or slag) as either Magnesium chloride(ifHydrochloric acid is used) or Magnesium sulphate(if sulphuric acid is used. Inthis dissolution process we want to dissolve as much magnesium as possible and minimisedissolving any of the other metals inthe fly ash or slag like iron, Calcium, Chromium, silicates etc.

The dissolved magnesium solutionwill then be heated to evaporatively remove the Chloride or Sulphate to berecovered as hydrochloric or sulphuric acid which can be reused. The remainingMagnesium will be as Magnesium Oxide MgO.

The Magnesium Oxide MgO will thenbe reduced to Mg through the reduction furnace. They have to create the right conditionsto only reduce the Mg Oxide to metal and none of the other metal oxides thatmay be in with it. That’s where lime, Ferrosilicon and Magnesite help.

The 3 additives, Lime, Ferrosiliconand Magnesite may have additional uses at other stages of the process otherthan furnace reduction.

Looking at those 3 additives:

1. Ferosilicon

Ferrosilicon is often used as a reducing agent,reducing metal oxides to metal – essentially the ferrosilicon bonds the oxygenoff the metal. It could be used in the reduction of MgO to Mg and also inextracting the Mg from the flyash so that it is able to more efficiently be dissolvedby the acid. For Ni Slag I would expect to se a lot of iron oxides like Haematitein the residual stuff that is not dissolved and for the flyash I would expectto see some Calcium salts and Silica(as silicates).

2. Quick lime
If we look at the steel industry lime is used to enhance the refractory life of the furnaces. Themagnesium oxide (MgO) reduces the tendency of steel slag to dissolve the MgOwithin the furnace refractory. So, I would expect that in the hydromet process,after addition of acid, quicklime helps keep the Mg in solution rather that anyprecipitating out into the residual fly ash or slag. The Ca in quicklime Iexpect will bind the potentially Mg precipitating ions. For example, I assumethat either Hydrochloric acid or Sulphuric acid is used so to avoid any MagnesiumChloride or Magnesium Sulphate dropping out the Calcium will step in and bindit first. In addition, quicklime can be used in the MgO to Mg reduction process– see below.

3. Magnesite

Magnesite is magnesium Carbonate MgCO3.It is used in the Pidgeon process with Ferrosilicon to reduce MgO to Mg

So here we have the MagnesiumOxide, Quicklime and Ferrosilicon in the reduction furnace to reduce MgO to MGmetal. The by product is Calcium Silicate which I expect is most of the SCM asit’s a very refractory material – good for bricks, laying hard surfaces, etc.

I have tried to get hold of thepatent documents for the hydromet process without success. That would give usthe more precise process.


Hope the above helps – may be a few errors in it asit’s off top of my head with a few quick google searches.

@tropic I know you havementioned the Chinese as potential Investors but I think that may be blocked bythe Australian Government or even other equity partners, such as America(Especially due to a US anti-dumping duty of 141.5% payable on magnesium importsfrom China which greatly favours LMG and the American support for Australiancritical minerals.

I don’t expect China to bean investor however they may weave into the Malaysia plant. There is enormousChinese investment in Indonesia and Malaysia. Over 20% of the population ofMalaysia is ethnic Chinese. Also, over 3% of Indonesian population is ethnicChinese – sounds small but 3% of 350M is large number! Singapore is dominatedby ethnic Chinese; Myanmar has a growing ethnic Chinese population. This is allknown as the “Bamboo network” which has been enormously successful. Most of theNickel mines in Indonesia are supported by Chinese investment so I expect theymay have some sway in who can access the Ni Slag. Would we say No if a Chinesecompany offered $1B for the Malaysia plant??

Cheers

Tropic

Apologies about formatting - I wrote in Word then copied and pasted.