London, September 15th (Argus) - Australian company Latrobe Magnesium has confirmed its plan to establish a primary metal magnesium plant with an annual production capacity of 50,000 tons in South Carolina, USA. Previously, the company has received a total purchase intention letter of 32,000 tons per year of magnesium ingots from North American customers.
The company has selected the preferred site for the project, and the factory can be expanded to 100,000 tons per year in the future.
The project will use nickel iron slag supplied by Societe Le Nickel (SLN), a subsidiary of French mining and metallurgical group Eramet, as raw materials. The two parties have signed a binding two-year memorandum of understanding for the supply of nickel iron slag.
The above purchase intentions include: Metal Exchange, Latrobe's existing US distribution partner, has committed to purchasing 25,000 tons per year, Meridian Lightweight Technologies has committed to purchasing 5,000 tons per year, and Twin City Die Castings has committed to purchasing 2,000 tons per year. These non-binding purchase commitments amount to 64% of the plant's design capacity.
Latrobe stated that it has received inquiries from customers in the North American region totaling up to 110,000 tons per year, as well as global customers with a total of approximately 285,000 tons per year.
The company expects the project's capital expenditure to be approximately $11-15 billion, and the operating cost to be approximately $2,600-4,000 per ton. Based on a magnesium price of $5,000-7,500 per ton, the project is expected to achieve an annual Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $320-615 million.
Latrobe plans to make the US project a priority development project, while its commercial chemical plant project in Victoria, Australia, is still awaiting the final solution from the state regarding the announced tailings liability system issue.
The company is currently in discussions with US financial institutions to raise approximately $30 million for project feasibility studies, land acquisition, and the establishment of a US subsidiary.
Meanwhile, Latrobe's project in Malaysia is still awaiting environmental approval for the import of nickel iron slag. This approval process depends on the formal confirmation by relevant governments of New Caledonia's non-OECD member status.
Latrobe plans to complete the project construction within 24 months after obtaining the final investment decision and expects to achieve the first magnesium metal output in April 2030.
