Latrobe Magnesium Limited: German Magnesium Plant Is Economically Viable
March 11, 2014 (Source: Latrobe Magnesium) — Latrobe Magnesium Limited (ASX:LMG) has completed the RWE Concept Study which concluded the German magnesium extraction project to be economically viable and worthy of further development.
The Project was defined in the study as a magnesium plant producing 40,000 tonnes of magnesium per annum and some 320,000 tonnes of cementitious material.
RWE Power AG is part of the RWE Group in Germany and has a confidentiality agreement with LMG to examine the feasibility of extracting magnesium metal from its Hambach mine based on LMG’s technology. The RWE Group is a top 30 company listed on the German Stock Exchange (DAX). RWE Power uses a broad energy mix of brown coal, hydro and nuclear power stations and is also a driver of innovation for coal fired power stations and CO2-avoidance. It employs more than 13,500 people.
Currently, Europe imports most of its 150,000 tonne annual magnesium requirement from China.
The Project involves sourcing the brown coal fly ash that is derived from RWE Power’s Hambach mine. In 2012, the coal content of this resource was reported to be in the order of 1.5 billion tonnes, over a 30 year project life. The Project will require only about 33% of the annual coal output of the Hambach mine.
As the Hambach brown coal fly ash contains a higher iron element than some of the Latrobe Valley fly ash, LMG’s hydromet process was expanded to include a magnetic separation step. Recent test work showed that this step combined with a conditioning step removed approximately 80% of the iron in the fly ash. The precipitate produced contained up to 84% iron oxide. This precipitate will be further investigated to determine whether a magnetite product can be developed for sale.
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The financial model indicated that both the operating and capital costs are slightly lower than an equivalent 40,000 tonne per annum plant in Australia. The higher German tax rate means that the net present value of this Project is similar to the Latrobe Valley project.
In June, the Chairman is due to meet with RWE Power executives to discuss how the parties will move this Project forward, define milestones and the indicative timetable.
The information in this statement that relates to the laboratory results is based on information compiled by Mr Kevin Torpey, who is a member of the Australasia Institute of Mining and Metallurgy. Mr Torpey is a Director of Latrobe Magnesium Limited and has sufficient experience which is relevant to the style of mineralization and type of deposit and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Torpey consents to the inclusion in this statement of the matters based on his information in the form and context which it appears.
About Latrobe Magnesium
Latrobe Magnesium is developing a magnesium production plant in Victoria’s Latrobe Valley using its world-first patented extraction process. LMG intends to extract and sell magnesium metal and its cementitious material from industrial fly ash, which is currently a waste stream from brown coal power generation.
LMG has completed its pre-feasibility and adjustment studies validating its combined hydromet / thermal reduction process that extracts the metal. Production from the initial 5,000 tonne per annum magnesium plant is due to start in the December quarter of 2015. The plant will be in the heart of Victoria’s coal power generation precinct at a brown field site located at 320 Tramway Road Morwell, providing immediate access to feedstock.
LMG plans to sell the refined magnesium under long-term contracts to Australian and American users. Currently, Australia imports 100% of the 10,000 tonnes annually consumed.
Magnesium has the best strength-to-weight ratio of all common structural metals and is increasingly used in the manufacture of car parts, laptop computers, mobile phones and power tools.
The LMG project is at the forefront of environmental benefit – by recycling power plant waste, avoiding landfill and is a low CO² emitter.
Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>