Australian-based Latrobe Magnesium have updated the terms of its contract with Metal Exchange Corporation (MEC) for the supply of magnesium metal for distribution in the US market.

Following the signing of an exclusive distribution agreement in January 2023, Latrobe has updated the terms of its distribution agreement under which the company will supply the entirety of its pilot plant’s magnesium metal production to the US market. In addition, Latrobe intends to direct an additional 2ktpy from its phase 2 production into the US market.

The company is currently constructing its Hazelwood North pilot plant in Victoria that will utilise a fly ash waste stream as feedstock for its proprietary production process. Despite delays related to labour and external financial factors, the project claims to remain within budget and is targeting completion in Q4 of 2023 with a capacity of 1ktpy. Once the pilot plant has successfully demonstrated the scalability of the processing technology, Latrobe plans to initiate the construction of a 10ktpy plant as a second phase.

Currently, the US has a single primary magnesium producer while it is the largest producer of secondary magnesium. However, these domestic sources do not produce enough magnesium metal to supply the demand that the US market requires. As a result, a large portion of magnesium metal is imported. Additionally, the rise of Chinese magnesium has also had a significant impact on the North American magnesium metal supply landscape, as producers were outcompeted and subsequently closed operations.

Historically, imports of magnesium metal have faced several obstacles, with the US implementing anti-dumping laws against the import of Chinese, Russian and Israeli magnesium metal over the last two decades to protect its domestic production.  Given the need for magnesium supply into the US market, Latrobe has looked to place itself as a cost-effective option for magnesium metal supply, a strategy Latrobe wants to capitalise on for the development of its phase three 100ktpy plant in Malaysia. However, most of the forecast demand growth will be able to be met by ramp-ups and new production already planned in China, according to Project Blue data, and ex-China projects will face familiar obstacles to entering the market.