VEEM has secured a 3-year fixed term contract + 2 x 1-year options for supply of centrifugally cast Hollowbar.
Latrobe Magnesium (ASX: LMG) have developed an innovative patented production process that extracts magnesium metal and other valuable by-products from brown coal fly ash, a magnesium rich waste feedstock.
The contract is to supply the 1,000 tpa Latrobe Valley Stage 1 Demonstration Plant, which is fully funded and expected to be operational by mid-2023.
Following successful demonstration, Latrobe Magnesium will construct a 10,000+ tpa commercial production plant at its Hazelwood North site, secured by firm offtake agreements.
Global magnesium demand is set to double by the end of 2030.
VEEM Limited (ASX: VEE) (‘VEEM’ or ‘the Company’), is a manufacturer of highly innovative piping solutions for the processing industry and regularly supplies to many first-tier mining companies locally and abroad.
The contract is for VEEM to manufacture, in Australia, the Hollowbar used in the extraction process of the plant, for an initial fixed period of 3 years with options. All product is manufactured at VEEM’s Canning vale facility and will contribute to maximizing local content and local supply chains for the project. There is also the possibility that VEEM may be able to recycle up to 30% of the scrap hollowbars after they have exhausted their useful life.
The 1,000 tpa Latrobe Valley Stage 1 demonstration plant is fully funded and expected to be operational by the middle of 2023. The project will process almost 100% of fly ash (a waste resource) into valuable products including magnesium metal, Supplementary Cementitious Material (SCM), silica, char, iron oxide and calcium carbonate.
Following successful operation of the demonstration plant, Latrobe Magnesium will develop its Stage 2 full-scale commercial 10,000+ tpa plant in the Latrobe Valley, already secured by supply offtake agreements.
Latrobe Magnesium has also awarded a Pre-Feasibility Study (PFS) for a 100,000 tpa international mega plant processing ferronickel slag feedstock to global experts Bechtel.
The global magnesium market is forecast to double by 2030, owing to the light weighting and electrification of the transport sector.
VEEM Global Commercial Manager Brett Silich said: “VEEM is proud to be working with Latrobe Magnesium and very grateful that the project has awarded the supply contract within Australia. The local manufacture and supply of this Hollowbar keeps jobs in Australia and provides advantages in terms of lead times and potential recycling of waste product. We look forward to the demonstration plant being highly successful and the full-scale commercial plant moving forward as planned.”
Latrobe Magnesium CEO David Paterson said: “Global demand for magnesium is strong and is expected to double by 2030 to allow manufacturing of lightweight sheeting for vehicles and components. This projected market growth and 12 million tons of fly ash feedstock resource supply in the Latrobe Valley, is why it’s essential for us to have a reliable partner in this project. We are excited to be working with VEEM to not only retain and grow local manufacturing and supply within Australia but promote recycling of materials and circular economies.”