Magnesium plant proposal

The Latrobe Valley could become the centre of Australia’s first magnesium manufacturing operation – eventually delivering a windfall of about 300 jobs – if a plan to establish a plant in Morwell is successful.

Latrobe Magnesium hopes to establish a plant to extract magnesium from brown coal ash from Hazelwood power station’s ash dams.

The company also hopes to eventually construct a plant capable of producing 40,000 tonnes of magnesium per annum.

On 30 January Latrobe Magnesium completed its preliminary feasibility study, which found a smaller 3000 tonnes per annum facility was feasible and recommended some technical changes.

Its chief executive David Paterson said the company had secured the former Di Fabrizio steel site on Tramway Road and hoped to begin construction on the 3000 tonnes per annum facility in May.

“We want to be on there in May and doing things on site,” Mr Paterson said.

“It’s great for us – it’s 11,000 square metres with two big sheds.

“We have to upgrade the site, mainly the electricity and get a gas linkage to the Churchill pipeline put in.” The 3000 TPA facility would yield 50 direct jobs plus up to 75 jobs during construction.

About a year after operation, the company would look to build a 40,000 tonnes per annum facility.

The larger facility would provide 300 ongoing jobs and up to 240 jobs during construction.

Magnesium is heavily used in the automotive industry with China the world’s major supplier.

“China makes 85 per cent of the world’s… magnesium and there is a producer in Japan, one producer in the United States and no one in Europe,” Mr Paterson said.

“It’s a product that those countries do want to secure from other sources to look at diversifying their supply.”

He called magnesium “the green metal” because it was produced from a coal by-product and allowed stronger, lighter vehicles to be produced – lowering emissions by increasing their fuel efficiency.

Whether work can begin in May on the smaller plant depends on the outcome of the company’s negotiations to secure access to the fly ash located in Hazelwood’s dams and its plan to apply for a $12 million grant from the State Government.

Mr Paterson said the company had been in discussions with Regional Development Victoria about the project and had recently given the organisation the feasibility study.

In a statement to the Australian Stock Exchange on 31 January, the company said it had previously negotiated terms for the supply of ash from Hazelwood but had since entered talks to secure fly ash from its ponds in the wake of Engie’s decision to close the plant.

The statement said the ash from the dams would be sufficient to provide 20 years’ production to the 40,000 tonnes per annum facility.

Committee for Gippsland chief executive Mary Aldred said she had not had any dealings with the company but the project offered “some good opportunities and we need the jobs at the moment”.

Latrobe City mayor Kellie O’Callaghan said she understood the project needed to secure funding.

Cr O’Callaghan said council welcomed “the commitment of Latrobe Magnesium to progress the feasibility study further”.

The State Government did not respond in time for print.