Latrobe Magnesium Ltd (ASX:LMG) is working to develop a magnesium production plant in Victoria's Latrobe Valley using a world-first process of combined hydromet / thermal reduction.
Latrobe Magnesium Ltd (ASX:LMG) has signed an agreement with Tokyo's largest titanium and magnesium trading house to acquire 4,000 tonnes of magnesium per annum from the planned production facility in Morwell, Victoria.
Under the MoU, Advanced Material Corporation of Japan has also agreed to provide a deposit against the sales contract to assist with costs of acquiring, installing and commissioning LMG’s expanded plant.
AMCJ will also assist LMG to obtain financial assistance from the Japanese government owned banks for the funding of its initial and expanded plants.
However, this is likely the first of four offtake agreements that could see all magnesium and cementitious material sold from the plant.
The offtake agreements form the basis for funding of the new plant.
A feature of the proposed LMG plant and interest from Japananese magnesium buyers is the low carbon footprint, which emits 60% less emissions than the Chinese plants.
The commitment is subject to LMG completing a satisfactory feasibility study and securing financial close for the plant’s construction.
LMG said it believes it will pre-sell most of the 40,000 tonnes per annum of planned magnesium production.
There are very few impurities in LMG’s beneficiated fly ash, it currently produces 99.7% pure magnesium before the refinery stage against normal dolomite production which is in the order of 95%.
Japan currently uses 40,000 tonnes of magnesium per annum and this is projected by industry sources to increase with greater use of magnesium by the motor vehicle industry.
Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.