Morwell magnesium move

LONG-held plans for a magnesium plant in the Latrobe Valley have progressed with an announcement yesterday the project’s proponents have secured a brownfield site in Morwell for a proposed start-up.

Latrobe Magnesium Limited chairman David Paterson told The Express the company had finalised documentation to locate its magnesium plant, which it hoped would eventually produce 40,000 tonne of magnesium per annum, on land owned by the Di Fabrizio family on Tramway Road.

He said LMG expected to be in production in the third quarter of the 2015 calendar year. The proposal entails converting brown coal fly ash to magnesium, cement material and char.

Mr Paterson said the site secured was almost 11 hectares and included some office and factory buildings.

The land had “historically been used for major infrastructure projects being the Loy Yang Power Station, Eastern Stand of the MCG and the Eastlink bridge beams,” he said.

Mr Paterson said the existing buildings would sufficiently accommodate LMG’s initial 5000 tonne per annum magnesium plant and allowed for expansion.

It was also “ideally situated close to existing gas and water pipelines and local infrastructure”.

LMG, a Sydney-based company, has secured an option for 12 months to enter into a three-year lease over the site and a right to buy the property during this period, Mr Paterson said, adding the 12-month option period “should be sufficient” for LMG to complete a bankable feasibility study of its proposal.

He said the company was currently negotiating fly ash agreements with local suppliers and was also negotiating with “potential key suppliers and customers”.

Test work was being undertaken before preparing a 500kg material sample to be sent to, and processed in, China in October, Mr Paterson said.

Final test work would then follow and LMG intended to tender the design and engineering for its plant in the last quarter of this financial year, he said.

Late last year The Express reported LMG had signed a ‘follow-up’ agreement with Beijing Tieforce Engineering to help progress plans for a Valley-based operation and BTE was understood to be the only company in the past 15 years to have built a magnesium smelter in the western world.

The potential for a local magnesium plant has been touted for many years and LMG first listed on the Australian Stock Exchange 10 years ago.

When asked why it had taken so long to progress the project, Mr Paterson said his company had “a breakthrough” with its technology several years ago, indicating it was now commercially realistic.