Latrobe Magnesium raises $10m to get world-first critical mineral plant off ground

• $10m raise to complete Latrobe Magnesium’s 500tpa plant and progress to commercial-scale production in Q1 2026
• World-first process converts brown coal fly ash into magnesium oxide (MgO), cutting CO₂ emissions by over 60% vs China
• Patented tech and strong backing position LMG as a secure, low-emissions global supplier of this critical mineral

Special Report: As interest in critical minerals heats up, Latrobe Magnesium has secured firm commitments to raise $10 million to fast-track production of magnesium metal using its world-first low-emissions technology.

The capital raising, supported by new and existing institutional and professional investors, comprises two components: a $6 million institutional placement and a fully underwritten, non-renounceable $4 million entitlement offer.

Proceeds will primarily be used to advance production of the critical mineral at Latrobe’s (ASX:LMG) demonstration plant in Victoria.

LMG says the plant is the most advanced magnesium project globally (outside dominant producer China) and it’s set to ramp up steady-state production to supply 1,000 tpa of magnesium metal from the first quarter of 2026.

This will be followed by production from the 10,000 tpa Commercial Plant in Victoria’s Latrobe Valley, once home to the state’s now-winding-down coal industry. The Commercial Plant already has offtake agreements signed with LMG’s US-based distributor for 100 per cent of capacity, with production targeted from CY27.

Looking ahead to global-scale production of low-emissions magnesium, LMG is also progressing its 100,000 tpa International Plant in Malaysia. Its plans for the Sarawak plant were boosted in March this year when Malaysia granted it hydropower access.

Global game-changer

What sets LMG apart in the magnesium sector is its world-first patented hydromet/thermal reduction process that converts brown coal fly ash – a waste residue from coal-fired power stations – into magnesium metal, magnesium oxide (MgO) and other valuable by-products.

This breakthrough technology offers more than a 60 per cent reduction in CO₂ emissions compared with producers in dominant global supplier China. That’s thanks to LMG’s use of ash feedstocks containing magnesium oxide instead of carbonates and a CO₂-sequestering, water-based extraction system operating at lower temperatures than conventional processes.

CEO David Paterson said he was delighted with the strong support for this equity raising, which reflects the increasing demand for magnesium from domestic and international markets, as well as awareness of LMG.

“It is very pleasing to see the market recognise the importance of LMG as the world’s first producer of magnesium from brown coal fly ash,” he said.

“This equity raise will help fund the magnesium section of our Demonstration Plant, illustrating the commerciality of our full flowsheet.
“In conjunction with the final installation of the Demonstration Plant to produce magnesium metal ingots, we will be advancing plans surrounding the 10,000 tpa Commercial Plant, with a Bankable Feasibility Study to commence once further funding is secured.

“The Placement has also been a fantastic opportunity to diversify our shareholder register with some institutions ahead of a significant period of growth for the company.

“The next 12 months promise to be an exciting time for us, and we are very appreciative of the continued support of our existing shareholder base. We therefore want our existing retail shareholders to have the chance to participate on the same terms as institutional investors through the Entitlement Offer.”

Supply chain strength

Magnesium is on the critical minerals list of countries including Australia, the US, UK, Japan and Canada, as well as the EU.

Better known to many for its benefits to human health, magnesium is also essential for lightweight alloys used in electric vehicles, aerospace, defence hardware, and renewable energy infrastructure. That’s due to it having the best strength-to-weight ratio of all common structural metals.

But as with a number of other critical minerals, magnesium’s supply is heavily concentrated in China – around 85 per cent – and governments around the world are increasingly seeking diversified sources.

Going for global growth

To date LMG has invested $63 million in its Demonstration Plant and more than $20 million in intellectual property, giving it a strong value case against its current market cap of roughly $33 million.

Global magnesium demand is forecast to grow at a compound annual growth rate (CAGR) of 5.8 per cent through to 2032, driven by the shift toward lightweight automotive alloys and EV components.

Along with geopolitical shifts, the rising costs and environmental restrictions in China are forecast to further erode its advantage, providing more openings for low-carbon producers such as LMG.

As well as magnesium, LMG will additionally produce other valuable saleable products from its feedstock, including iron oxide, agricultural lime, and char, diversifying the company’s revenue base.

This article was developed in collaboration with Latrobe Magnesium, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.