Latrobe Magnesium Limited (ASX:LMG) has executed a binding Memorandum of Understanding (MoU) with Société Le Nickel for the supply of 450,000 tonnes per annum of ferro-nickel slag over 20 years as feedstock for LMG's 100,000-tonne-per-annum magnesium plant.
Société Le Nickel produces some 40,000 tonnes per annum of ferro-nickel and is one of the largest ferro-nickel producers in the world. It is 100%-owned by Eramet SA, a listed French company with some Euro 2.4 billion market capitalisation.
Employing the principles of the circular economy, LMG will take the waste slag product off SLN's hands and turn it into sustainably sourced magnesium.
Port facility can handle the loading
LMG will need in the order of 600,000 tonnes of ferro-nickel slag per annum to produce 100,000 tonnes per year of magnesium.
With its present port facilities, the French company can handle the loading of 450,000 tonnes per annum and is considering expanding its facilities notwithstanding the agreement.
As and when the proposed expansion is undertaken, SLN has advised LMG that it will be able to cater for the additional 150,000 tonnes per annum of ferro-nickel slag.
In the event SLN does not expand its port facilities, LMG will source additional supply from another ferro-nickel producer.
Better than fly ash
The chemistry of the SLN ferro-nickel slag is 33% magnesium oxide, 55% silicon monoxide and 9% iron (III) oxide. LMG has been able to make magnesium, high-grade amorphous silica, hematite and its supplementary cementitious material from this feedstock.
The feedstock has nearly twice the magnesium oxide content as Yallourn brown coal fly ash, another by-product that can be used as feedstock for the plant.
This means that LMG can process less material to achieve the same amount of magnesium when compared to fly ash.
It takes 10 tonnes of fly ash, dolomite or magnesite to make one tonne of magnesium. It only takes six tonnes of ferro-nickel slag to make one tonne of magnesium.
New Caledonian origins
SLN’s facility is one of the largest ferro nickel production plants in the world and makes 1.7 million tonnes of ferro-nickel slag per annum, with a slag heap of some 28 million tonnes on the island of New Caledonia.
New Caledonia contains approximately 20% of the world's nickel ore reserves, facilitating ferro-nickel – and ferro-nickel slag – production for decades to come.
There are also some 20-plus ferro-nickel slag producers in Indonesia and the Philippines.
Pre-feasibility study
LMG is also executing a pre-feasibility study (PFS) for the magnesium plant.
The PFS is being conducted by Bechtel, a global engineering, construction and project management company.
Bechtel will complete a study phase of the PFS by the end of the month, which will evaluate strategic options to leverage and develop the magnesium plant, weighing up two overseas locations.
LMG is also holding discussions with potential joint venture partners who wish to participate in its project.