Latrobe Magnesium (ASX:LMG) CEO David Paterson says the company is considering shifting location plans for its 100,000 tonne plant to meet US demand.
Currently intended to be built in Sarawak, Malaysia, Latrobe has completed a Prefeasibility Study for the stage three Commercial Plant, reeling in global firm Bechtel to use ferro nickel slag feedstock.
The news comes after Latrobe was selected by the US Export Import Bank (EXIM) for potential funding over its stage two Commercial Plant.
Speaking to Mining.com.au, CEO Paterson explains that talks about a new location for stage three were sparked following recognition from the US Export Import Bank (EXIM), where the company received a letter of interest valued for up to US$122 million ($185.57 million) for the stage two plant.
“It’s just a recognition that the Americans will back this project,” Paterson says.
The CEO describes the current global magnesium supply chain to be unpredictable, as Chinese export bans loom particularly in the US.
“They still need to be self-sufficient,” he adds.
“It’s been cut off before and it could get cut off again.”
China is known for its magnesium supply, producing 13 million tonnes of magnesium compounds in 2023, as well as 830,000 tonnes of magnesium metal produced, according to World Population Review.
The country is listed as the biggest producer in the world, followed by Turkey, which produced 1.8 million tonnes of magnesium compounds, and 15,000 tonnes of metal in 2023.
The Shanghai Metal Market reports China exported 20,393 tonnes of magnesium ingots in June 2025 alone, which represents a 14.38% increase to the previous month. A vast majority of exports were diluted to the Netherlands and India, each receiving 26.9% and 23.52% of the ingots respectively.
Paterson tells Mining.com.au that the company forecasts market demand to double by 2030 from the vehicle market alone due to sales mix changes.
“That’s just saying changing sales mix, not just increased usage,” Paterson says.
One of 17
Latrobe was one of the 17 critical minerals projects in the Austrade prospectus selected for delegation, naturally being the only magnesium developer.
“The beauty about that is it actually shows you, one, they’re really reliant on magnesium,” the CEO tells Mining.com.au.
“Two, you know, they really want to foster the relationship with Australia and magnesium, and they understand that we know what we’re talking about when it comes to Mining.”
If Latrobe elects to take EXIM up on its offer of a 15-year maximum repayment term, the plant intends to begin magnesium production in 2027.
Undertaken by Bechtel, the company predicts a bankable Feasibility Study to take nine months to complete.
“We have US$50 million put aside for an owner’s equity and US$200 million for the construction costs,” the CEO tells this news service.
Paterson explains that Latrobe’s position as the only magnesium project in development in the world has incited the bank’s interest, along with its intention to sell 100% of its product into the US and project timelines.
The company is also in discussions with the National Reconstruction Fund, Export Finance Australia, and Societe Generale for debt funding.
In conjunction with these funds, the company recently undertook a $6 million placement, along with the $4 million being raised currently through an underwritten rights issue to install and commission the magnesium section of the plant.
It takes three
Meanwhile over in Victoria, the Hazelwood North Demonstration Plant is up and running, producing magnesium oxide after an operational start-up last month, as reported by Mining.com.au.
Also known as the stage one Demonstration Plant, the project is anticipated to reach a commercial production of 1,000 tonnes each year.
Using a hydrometallurgical extraction and thermal reduction process, magnesium metal is extracted from fly ash at the plant to minimise waste streams and create valued byproducts.
Latrobe Magnesium is focused on developing a magnesium metal plant in Victoria’s Latrobe Valley using its world-first patented extraction process, along with its stage two and three plants, reaching up to levels of 100,000 tonnes produced per annum.
Write to Maddison Elliott at Mining.com.au
Images: Latrobe Magnesium
