In mid-May, Australia’s Latrobe Magnesium (LMG) has secured a US$23 million loan to fund the ongoing construction of its demonstration magnesium production plant in Victoria’s Latrobe Valley.
The company recently signed the documents with specialist investment firm RnD Funding Pty Ltd, with the first tranche of $10 million set to enter in early June. An additional $10 million will be withdrawn in September, with a $3 million backup available early next year to cover any project cost overruns.
Latrobe said its cash on hand and future exercise of the Latrobe option will provide it with sufficient funds to complete the construction of a pilot plant with an annual capacity of 1,000 tons in the first quarter of next year.
Once the plant is operating to design specifications, the company intends to develop a commercial plant with an annual capacity of 10,000 tons, which is expected to generate approximately $110 million in revenue and $42 million in EBITDA. The commercial plant is expected to have one of the lowest carbon dioxide emissions in the global magnesium industry.
Project Progress
The project uses wet extraction process to process fly ash to produce magnesium. Latrobe Magnesium said the detailed design and engineering of the demonstration plant was on schedule and more than 36 percent ahead. The Hazard and Operability Study (HAZOP) of the project has been completed. Regular project risk reviews will also continue to ensure ongoing mitigation plans and risk management. 3D modeling has passed the 30% design review milestone, the procurement phase has begun, and equipment packages are in development.
Over the past month, Latrobe has received bids for the plant’s roasters and reduction furnaces, which have been identified as projects with longer lead times, accounting for 30% of the total equipment purchases. The winning bidder is issued.
Latrobe’s project team will recently release equipment tender packages for forming, filtration, automation, agitator and non-metal canister equipment, and is preparing and releasing an additional 20 equipment packages over the next month. A contract has been signed for the construction of the car park and security gatehouse. Earthworks civil works tender documents are being developed for tendering to the market.