Latrobe Magnesium - What the Business Is and What the Deck Says - A Magnesium Metal Story
- Noel Ong
- Oct 29
- 6 min read
Announcement
Latrobe Magnesium (ASX: LMG) is progressing an Australian-first pathway to produce magnesium and associated by-products from brown coal ash via a patented hydromet/thermal reduction process (Figure 1). In late September 2025, LMG confirmed first production of magnesium oxide (MgO) from its Hazelwood North Demonstration Plant. This operational milestone further de-risks the flowsheet ahead of magnesium metal commissioning.
Figure 1: Ash received and stored in Ash Bunker, ready for start-up. Loading of ash into hopper (left) and deliveries of acid for start-up (right) (source: LMG)
Highlights
(Figure 2)
First MgO produced; ramp-up underway. The Demonstration Plant completed operational start-up and is producing MgO; the team is ramping toward ~1,000 tpa steady-state operations with structured training and preventative maintenance during planned pauses.
Feedstock and reagents secured. >200 t of ash was delivered for start-up; LPG, industrial gases, and acid logistics are in place; supply chains remain secure.
By-products at production scale. Char, silica, iron oxide, and agricultural lime have been produced; validation trials will now support long-term offtake for Demo and future Commercial Plants.
Scale-up pathway and timelines.
Demo Plant: Mg metal commissioning/first ingot targeted Q1 CY2026.
Commercial Plant (10 ktpa, Victoria): BFS from 2026, production targeted CY2027 H2; 100% of magnesium metal offtake contracted.
International Plant (100 ktpa, Sarawak): hydropower access granted Mar 2025; FN-slag feed, low-carbon pathway.
Multi-commodity revenue. By-products (SCM, iron oxide, lime, char) expected to contribute ~25% of revenue at Commercial scale, diversifying cash flows.
Process advantage/emissions. Patented hydromet approach (MgO/CaO feed vs carbonates) targets >60% CO₂ reduction vs China-based magnesium producers.
Figure 2: Loading of MgO into 1t bags/storage area - product readying for offtake. (source: LMG)
1) What is the Latrobe Magnesium business?
LMG converts brown coal ash (and, internationally, ferronickel slag) into magnesium metal and saleable by-products using a proprietary hydromet/thermal reduction process developed over many years and protected by international patents. The approach aims to recycle a waste stream, cut emissions intensity, and create a multi-product revenue base (magnesium + SCM, silica, lime, char, hematite).
Operationally, LMG is:
De-risking at demonstration scale in Victoria’s Latrobe Valley (Hazelwood North/Morwell), with MgO already produced and magnesium metal commissioning targeted for Q1 CY2026.
Scaling to a 10 ktpa Commercial Plant in Victoria (Figure 3) with contracted offtake for 100% of magnesium metal.
Figure 3: Stage 1 Site – Morwell, Victoria (source: LMG)
Advancing a 100 ktpa International Plant in Sarawak (Malaysia), leveraging hydropower (Figure 4).
Figure 4: Operations Overview (source: LMG)
2) Investor Presentation (Oct 2025): Overview of the Business
Strategy & Value Proposition. LMG frames itself as a near-term magnesium producer with a technology moat (patented hydromet), a clear scale-up plan (1 ktpa → 10 ktpa → 100 ktpa), and multi-commodity revenue. The Demo Plant has had A$70m invested; IP development A$20m over ~14 years with CSIRO collaboration.
Commercialization Path & Flow Sheet. The Demo Plant’s flowsheet is intentionally similar to the 10 ktpa design, de-risking critical path items; MgO is leached, converted, briquetted, and reduced to 99.99% magnesium through the furnace step (Figure 5).
Figure 5: Process and Flow Sheet. (source: LMG)
Market Position & Emissions. Magnesium is designated a critical mineral by multiple governments; China and Russia currently dominate global supply. LMG’s feed chemistry (MgO/CaO) underpins a >60% CO₂ reduction claim versus typical Chinese routes.
By-products & Diversification. Commercial Plant by-products (SCM, silica, calcium carbonate/Ag-lime, char, hematite) are depicted as ~25% of revenue, broadening customer exposure without incremental production cost (Figure 6).
Figure 6: By-products with an indicative revenue mix to reinforce diversification. (source: LMG)
Funding & Use of Proceeds. In October 2025, LMG tabled an A$8m equity raising (A$4m placement + A$4m entitlement offer, A$0.023/share). Proceeds support commissioning of magnesium metal production at the Demo Plant, steady-state MgO, commencement of Commercial BFS, and working capital.
Project Snapshot
Demo Plant (Victoria, 1 ktpa): MgO in production; magnesium metal commissioning targeted Q1 CY2026.
Commercial Plant (Victoria, 10 ktpa): Of f takes covering 100% of magnesium metal; BFS from 2026; production targeted CY2027 H2.
International Plant (Sarawak, 100 ktpa): FN-slag feed; hydropower access granted Mar 2025; emissions intensity guidance shown as ~4.0 t CO₂/t Mg in project assumptions.
About Latrobe Magnesium
Latrobe Magnesium (LMG) is commercialising a patented hydromet + thermal-reduction process to produce magnesium metal and cementitious by-products from brown-coal ash. Its Latrobe Valley Demonstration Plant has produced MgO, with magnesium metal commissioning targeted for Q1 CY2026, ahead of a 10,000 tpa Commercial Plant in H2 CY2027 (with planned long-term US offtake). LMG is also progressing a 100,000 tpa “Mega” Plant in Sarawak (PFS-A completed), positioning the business as a low-CO₂, circular-economy recycler serving automotive, aerospace, medical, and electronics demand.
Samso Concluding Comments
The LMG story is not something that mainstream investors have a lot of exposure to in the ASX. This has been a long journey, and from Figure 7, it has not been anywhere near being a darling for ASX investors. However, it does have a robust business model. One just needs to take time to understand.
In this recent ASX release, it does appear to have ticked an important box: MgO is being produced and bagged. The ramp—punctuated by scheduled pauses for training and preventative maintenance—reads like a typical operation that is trying to build run-hours without breaking the plant.
The next catalyst is to switch on the magnesium metal section and hit the Q1 CY2026 commissioning target. With the Demo flowsheet intentionally mirroring the 10 ktpa Commercial design, each successful step should be a de-risking scale-up, and the Commercial Plant already has 100% of magnesium metal offtake in place.
Management is doing its best to ride the business curve by diversifying. The by-products are flagged at ~25% of Commercial revenue, which is a significant part of the balance sheet, and LMG has started validation trials now that the product exists at production scale. If those trials translate to firm contracts, that’s another leg under the revenue stool.
Figure 7: Latrobe Magnesium share price chart as of 27th October 2025. (source: CommSec)
What should investors look out for? I think a steady-state MgO and first sales, the metal commissioning window, and BFS momentum for the 10 ktpa plant are important. The value case strengthens if LMG can turn today’s MgO success into consistent plant availability and on-spec magnesium ingots—backed by offtake into the US market already flagged in the deck.
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