By PHILIP HOPKINS
IN a major boost to Latrobe Valley industry and jobs, Latrobe Magnesium has paved the way for its plant in Morwell to use the company’s own patented technology to eventually produce magnesium for the international market from the Valley’s brown coal fly ash.
The company, in a release to the ASX on Monday (May 13), announced the completion of commissioning for the first phase of its 1000 tonnes per annum, Stage 1 demonstration plant.
The plant, which was built over the past year, produces what Latrobe Magnesium (LMG) says is the world’s first environmentally sustainable Magnesium Oxide from fly ash – a waste product from the Yallourn power station.
Production of MgO is the prerequisite for proceeding to the next stage of the operation, a commercial plant with a capacity of more than 10,000 tonnes per annum of magnesium metal. This output is 100 per cent contracted.
Magnesium is classified as a critical mineral in multiple countries, with no current producers across Japan, North America, Europe and the Middle East.
LMG said completing the commissioning phase marked a big milestone in pioneering a sustainable magnesium extraction method at an industrial scale. Using the company’s world-first hydromet process showed the value of LMG’s intellectual property.
“The successful production of MgO from the demonstration plant is a testament to our innovative process and commitment to sustainable manufacturing,” the company said.
LMG will now start a bankable feasibility study and financial discussions for the commercial plant.
The chief operating officer at LMG, Ronan Gillen, said an investment decision on the commercial plant was expected by the end of the year.
“We hope to have the commercial plant operating in 2026,” he said, during a tour of the plant with the Express.
Mr Gillen estimated that construction of the commercial plant would create more than 300 jobs, while the fully operating plant would have 50-60 permanent jobs. The aim was to employ locals, such as former workers from Australian Paper, he said.
LMG will extract the magnesium metal and other saleable materials from the industrial fly ash, a waste resource from the Yallourn brown coal power station. There was enough ash from the Yallourn power station for 50 years’ operation, Mr Gillen said.
LMG has been doing research and development on its pioneering technology for 20 years, with various forms of technology tried. The proprietary hydromet process has been extensively tested at laboratories and the CSIRO at a cost of more than $20 million.
MgO production from the demonstration plant will be sold to Rainstorm Dust Control under a memorandum of understanding between the parties.
Long-term 20-year supply agreements of fly ash and ferro-nickel slag waste feedstocks for the plant’s production have been secured.
LMG has international contracts locked in to export the magnesium to America and Japan. Under the US-Australia free trade agreement, magnesium produced in Australia is exempt from any import duty.
LMG’s chief executive, David Paterson, said as the only Western producer of MgO, the importance of LMG’s production was “globally significant”. The US contract would deliver excellent prices to LMG due to US anti-dumping duty payable on magnesium imports from China, he said.
Currently Australia imports 100 per cent of the 8000 tonnes annually consumed.
According to LMG, global magnesium demand is forecast to double to two million tonnes by 2027.
Magnesium is increasingly used in the manufacture of items such as car parts, electric vehicles, laptop computers, mobile phones and power tools.
Mr Gillen said high quality magnesium would be produced from the Yallourn fly ash, with the whole operation cleaning up some of the environmental legacy of the Valley.
“There are no downstream tailings or waste,” he said. The project employs the principles of the circular economy; it turns 100 per cent of potentially hazardous industrial wastes into magnesium metal and valuable by-products.
These saleable by-products including iron oxide, silica, char, agricultural lime and supplementary cementitious material for premium, low CO2 cement production.
LMG said it was the only new magnesium producer in the Western world since 2015 with sustainable production emitting 60 per cent less carbon dioxide than the industry average.
Mr Gillen said five-to-six years ago, LMG had been in talks with the Hazelwood power station to take its ash.
“We were close to a deal when Engie closed the power station. We regrouped and started talks with Yallourn. Energy Australia is totally on board,” he said.
Mr Gillen, a process engineer who has worked in mining for more than 25 years, including many stints in Western Australia, has been with LMG for three-and-a-half years.
For half that time, he worked in production management before he became sick of the remote mining life and transferred to the engineering and construction industry, working on many big projects. He came to LMG with great operation and project delivery experience.
The LMG plant is located on the site of Don di Fabrizio’s former steel construction business, whose steel fabrication was used in building the Loy Yang power station. Other companies leased the land before Latrobe Magnesium took over.
“LMG bought the land off Don, who was excited to see his legacy being put into good use. It’s a shame he is not here to see it (Mr di Fabrizio died in January 2022). The sons visit – they’re thrilled the firm’s legacy is being remembered,” Mr Gillen said.
The ash is transported by truck for the demonstration plant stage. During the EPA application, Mr Gillen said there were no objections, but other arrangements would be put in place for long term.
Mr Gillen said the commercial plant would make the company less reliant on debt. “The demonstration plant was only planned to break even, but the commercial plant will have income stream,” Mr Gillen said.
LMG is also in a 50-50 joint venture to build an international mega-plant in Sarawak that aims to produce more than 100,000 tonnes of magnesium annually. High energy and labour costs mitigate against building such a huge plant in Australia.
The Latrobe Valley promises other sources of fly ash as the Hazelwood mine site is rehabilitated and Loy Yang power stations eventually close.
“No matter what other international ventures come about, the Latrobe Valley is our spiritual home – hence the name ‘Latrobe Magnesium’,” Mr Gillen said.
