Latrobe Magnesium Ltd (ASX:LMG) has chosen the Samalaju Industrial Park in the state of Sarawak, Malaysia, as the ideal location for its 100,000 tonnes per annum magnesium plant.
The availability of abundant hydropower was a significant factor in the decision-making process, enabling the company to produce magnesium with potential net-zero emissions on a life cycle analysis basis using 100% renewable power.
Strengthening the supply chain, the company has progressed discussions with the Ministry and Sarawak authorities to secure suitable land near port facilities and ferrosilicon producers.
Moving forward, Latrobe Magnesium will kick off phase B of the pre-feasibility study (PFS), with Bechtel, on the selected location.
Location highlights
The Samalaju location has notable strengths compared to the other two options which were Ras Al Khair in Saudi Arabia and Duqm in Oman, including:
- Local production of ferrosilicon – the presence of the major ferrosilicon producers, one of the company's largest reagent requirements;
- A substantial modern bulk handling port to cater for imports and export of LMG products – the port can move 7 million tonnes per annum of bulk products and is planned to expand to 18 million tonnes;
- Large workforce capability – substantial industrial employment base already present in Samalaju Industrial Park and nearby; and
- Supporting services – significant supporting industries located nearby in Bintulu, a population of 300,000, that not only supports Samalaju but the Petronas LNG complex, one of the largest in the world.
Latrobe has agreed on a 40-hectare site location upon discussions with Ministry officials and authorities in the Sarawak Government, particularly the Bintulu Development Authority.
Subsequently, the company will immediately kick off the land application process to secure the land.
The PFS-B study will provide estimates of the financial return of the 100,000 tonnes per annum plant based on the revenues and costs for this location.
Furthermore, LMG has received favourable reactions in discussions with financiers in relation to funding the project in Sarawak.
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.