THE site selection process for a planned Latrobe Valley-based magnesium plant, set to commence by mid-2015, had been narrowed to two locations.
Latrobe Magnesium chair David Paterson told The Express negotiations were in their final stages over the sites. He would not reveal their locations but said both were in close proximity to power stations, but not co-located.
Mr Paterson said a recent report in Proactive Investors, an investments news organisation, which said the proposed plant was entering a new stage of development, was accurate.
Proactive Investors said LM had just increased the “net present value” of its proposed Valley-based plant to $120 million from $83 million following test work undertaken on its hydromet technology-based process.
Long-held plans by the Sydney-based company to build a local magnesium plant continue to evolve but Mr Paterson said production would not commence until mid-2015.
In November last year Chinese company Beijing Tieforce Engineering conducted site visits in the Valley to assess suitability for accommodating an initial LM-run 5000 tonne plant, and future 40,000 tonne plant expansion.
Last week it was reported the costings from a 2011 pre-feasibility study on the proposal had been “refined” in light of “significant design changes” to aspects of the plant which meant a potential reduction in capital and labour costs.
“The result of these savings substantially improves the value of the project from $83 million to $120 million for the 40,000 tonnes per annum magnesium plant,” Proactive Investors said.
“It is planning to further increase the value of the project with more detailed work on improving iron removal and the creation of an additional product.”
Mr Paterson said LM was “finalising a 500 kilogram bulk fly ash sample for shipment and testing in a commercial operation in China”, work which was expected to take up to five months.
The bankable feasibility study would start once “fly ash and property agreements” had been finalised, likely to be by next quarter, he said
“We have to have the fly ash agreement signed off by a local provider and have the property finalised and we have allowed until June to see this happen, but we hope it will be sooner,” Mr Paterson said.
He said the company was confident of attracting government and private investment dollars for the project, with “high level ministers” indicating their support to see it happen.
“When we started this project in 2002 we got a federal grant of $3 million and, when you look at what the Federal Government has done for someone like Energy Brix which is going to close, for example, and we are actually about creating jobs, we are asking for about $20 million and I don’t see it as a big issue when you look at the quantum of what we are doing… and we are helping the car industry as well since they are the second biggest user of magnesium,” Mr Paterson said.
He has estimated it would cost about $45 million to build an initial plant, which he said satisfied “green criteria”.