en.Wedoany.com Reported - Australian company Latrobe Magnesium (ASX: LMG) is accelerating the construction of its world-leading demonstration plant in the Latrobe Valley, which uses brown coal ash (waste) to produce high-value critical minerals, with key structural and installation work now progressing at an increased pace.
LMG released this latest update as governments and manufacturers worldwide seek to diversify their magnesium supply sources to reduce reliance on China. Magnesium, a lightweight metal classified as a critical mineral by multiple countries, is widely used in aerospace, automotive, defense, and other manufacturing industries.
LMG stated that work on Phase 1B has gradually accelerated since March, when the plant produced approximately 20 tonnes of magnesium oxide (MgO) with a purity of up to 90%. Currently, major structural, mechanical, and piping (SMP) installation work is advancing, alongside electrical and instrumentation installation. Procurement efforts remain strong to support installation, while suppliers responsible for delivering key equipment, such as reduction furnace components, have been remobilized.
Under a distribution agreement with the Metal Exchange in the United States, all magnesium products from LMG's Phase 1 demonstration plant (1,000 tonnes per annum) and the planned Phase 2 commercial facility (10,000 tonnes per annum) have been allocated to the U.S. market. In March, the U.S. distributor prepaid LMG $2 million to support Phase 1B work.
"We are very pleased with the progress of the Phase 1B installation and commissioning project, particularly the significant acceleration of on-site activities since late March," said CEO David Paterson. "As we advance commissioning preparations to achieve first magnesium metal production in the second half of 2026, in line with the distribution agreement with the Metal Exchange, structural, mechanical, piping, electrical, and instrumentation installation activities are proceeding concurrently. It is especially encouraging that this work is being carried out alongside a very strong safety performance, with no reportable incidents to date. With a clear production pathway and 100% allocation of our initial output, LMG is well-positioned to play a significant role in addressing the structural supply gap in this critical market."
Given the importance of magnesium to key industries related to national security, demand in the U.S. market is strong. However, the U.S. has no domestic primary magnesium production, with China accounting for approximately 90% of global supply and Russia around 6%. LMG's market position is further underscored by the fact that it was one of only seven ASX-listed stocks included in the $8.5 billion U.S.-Australia critical minerals deal announced in October last year.
