Latrobe Magnesium Shifts Strategy to Prioritize 50,000 mt Magnesium Smelting Project in South Carolina, US [SMM Survey]

Published: Sep 17, 2026 09:15

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[SMM Magnesium Survey: Latrobe Magnesium Shifts Strategy to Prioritize 50,000 mt Magnesium Smelting Project in South Carolina, US] Australia's Latrobe Magnesium (ASX:LMG) has announced its latest plan to build a new primary magnesium plant with an annual capacity of 50,000 mt in South Carolina, US, with a long-term expansion potential to 100,000 mt/year, while its commercial project in Australia has been postponed. The project has secured a site and a long-term raw material supply agreement for nickel-iron slag, obtained letters of intent for 32,000 mt/year of offtake, and is supported by matching subsidies and tax incentives from South Carolina, with the company currently in financing negotiations. North America currently has no commercial primary magnesium capacity, and magnesium is included on the US critical minerals list, so the project aims to fill the gap in North America's magnesium supply chain.

Australian publicly listed firm Latrobe Magnesium announced a strategic adjustment on September 15, prioritizing its magnesium smelting project in South Carolina while deferring its large-scale magnesium project in Victoria until the regulatory framework for mine legacy issues is in place. Phase 1 has a designed capacity of 50,000 mt/year, with downstream letters of intent totaling 32,000 mt/year secured, accounting for 64% of Phase 1 capacity, alongside substantial potential demand from North America and globally. Raw material supply is underpinned by a 20-year binding memorandum with Société Le Nickel, ensuring ample nickel-iron slag feedstock reserves to support long-term operations. Total capital expenditure is estimated at $1.1-1.5 billion, with financial projections indicating sound returns, excluding local policy incentives. The company plans to commence feasibility studies in Q1 2027, complete FID in March 2028, with a 24-month construction period and production startup in April 2030. Pre-feasibility work, land acquisition, and establishment of a US subsidiary require $30 million in financing.

The company's Stage 1B magnesium demonstration plant in Australia's Latrobe Valley is 70% complete, with core equipment in place and commissioning underway, targeting first magnesium metal production in H2 2026. The plant employs a process to extract magnesium from lignite fly ash solid waste, with magnesium oxide technology validation already completed. US distributor Metal Exchange LLC has paid a $2 million prepayment, with all demonstration plant output designated for the US market. Full process validation at the demonstration plant will confirm the feasibility of the company's technology, providing technical support for the large-scale commercial project in South Carolina. North America currently has no primary magnesium capacity, global primary magnesium supply is highly concentrated, and Australian-produced magnesium can circumvent US tariff barriers. The enterprise plans to leverage its proprietary technology to fill the gap in US domestic magnesium supply.

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