Latrobe Magnesium Eyes 50ktpa US Plant to Fill North America’s Critical Supply Gap
Key Takeaways
- LMG has announced a 50 ktpa primary magnesium plant in South Carolina, USA, with site optionality to expand to 100 ktpa — targeting a market where no operating commercial-scale US primary magnesium producer currently exists.
- Letters of Intent totalling 32 ktpa have been secured from named customers including Metal Exchange LLC (25 ktpa), Meridian Lightweight Technologies (5 ktpa), and Twin City Die Castings (2 ktpa), covering approximately 64% of Phase 1 nameplate capacity.
- Feedstock is 100% covered by a binding 20-year MOU with Société Le Nickel (Eramet group), with an existing SLN stockpile of approximately 28 Mt and generation potential of ~1.8 Mtpa — roughly six times annual project demand — supporting an estimated 60-year project life.
- The mid-case project NPV10 is US$1.4–2.7 billion with an unlevered real IRR of 18–26%, against a capex estimate of US$1.1–1.5 billion; the financial model excludes a State of South Carolina incentives package, representing additional potential upside.
- The indicative development timeline targets feasibility study completion by January 2028, a Final Investment Decision by March 2028, and first production by April 2030 — conditional on securing US$30M in pre-FID finance and completing site purchase.
LMG targets 50 ktpa US magnesium plant as North America’s critical supply gap widens
Latrobe Magnesium Limited (ASX: LMG) has announced its intention to pursue a 50 ktpa primary magnesium metal plant strategically positioned in South Carolina, USA, with site capacity with optionality for expansion to 100 ktpa. The project targets a market where no operating commercial-scale primary magnesium producer currently exists in North America and approximately 90% of global supply comes from China.
Letters of Intent (LOIs) totalling 32 ktpa have already been secured from named customers, representing approximately 64% of Phase 1 nameplate capacity. The indicative timeline targets feasibility study completion by January 2028, a Final Investment Decision (FID) by March 2028, and first production by April 2030.
Incoming Chief Executive Officer Robert Stein commented on the announcement:
Robert Stein, Incoming CEO
“This strategic update is the culmination of years of pioneering and tireless work by David Paterson and the Latrobe Magnesium team. LMG is uniquely positioned to capitalise on this opportunity given our intellectual property and capabilities, which can help solve the United States’ critical magnesium supply gap. Supported by American enterprise and Government, LMG has identified a clear pathway to advance this commercial project, with a clear focus on disciplined execution and shareholder value creation. I’m excited to lead the team on this journey, to continue the work of David and to build a Latrobe Magnesium that is a reliable, safe and sustainable partner to our future customers in the United States, Australia and abroad.”
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Strategic snapshot — project at a glance
The table below summarises the key parameters of LMG’s proposed US project as disclosed in the announcement.
| Project Parameter | Detail |
|---|---|
| Nameplate Capacity | 50 ktpa (Phase 1); site capacity for expansion to 100 ktpa |
| Feedstock | Ferronickel slag (~33% MgO); binding 20-year MOU with Société Le Nickel (Eramet group); 340 ktpa required |
| Products | 99.9% pure magnesium metal; magnesium alloys for casting and extrusion; by-products include SCM, iron oxide, amorphous silica |
| Engineering Partner | Bechtel (nominated) |
| Site | Preferred location in South Carolina, USA; negotiations underway |
| Study & Setup Cost | US$30M (feasibility study, land acquisition, US subsidiary establishment) |
| Capex Estimate | US$1.1–1.5B |
| EBITDA Estimate | US$320–615M pa (magnesium price range US$5,000–7,500/t; spot US$7,050/t) |
| NPV10 | US$1.4–2.7B (mid-case); US$1.0–2.4B (higher-case capital/opex +15%/+20%); US$1.7–3.1B (lower-case capital/opex -20%/-30%) |
| IRR | 18–26% (unlevered real) |
| Indicative First Production | April 2030 |
Why magnesium matters — understanding America’s most urgent critical mineral gap
Magnesium holds the best strength-to-weight ratio of all structural metals, making it indispensable across aluminium alloys, automotive manufacturing, aerospace, defence applications (including aircraft, munitions, drones, and countermeasures such as flares), and electronics. Despite this importance, the United States is heavily exposed to a single dominant supplier.
The US Department of Energy (DoE) named magnesium one of 13 commodities carrying the highest supply risk out of 60 critical minerals assessed in its 2025 list. The only US primary magnesium smelter, located in Utah, ceased production in 2021–22, and its operator filed for Chapter 11 bankruptcy protection in September 2025. The US is now more than 75% reliant on imports for its magnesium requirements.
Key markers of the supply crisis include:
- DoE critical mineral designation: Magnesium ranked among the 13 highest-supply-risk commodities from 60 assessed
- DIBC RPP II inclusion: The US Defence Industrial Base Consortium added magnesium to the scope of its Request for Project Proposals II; LMG is submitting its Quad Chart by 17 September 2026
- Anti-dumping duty history: Duties on pure magnesium from China in force since May 1995; alloy magnesium duties since April 2005, both continued following five-year sunset reviews
- Utah smelter closure: The only US primary magnesium smelter ceased operations in 2021–22; operator filed for Chapter 11 in September 2025
For investors, the implications are significant. By producing inside the United States, LMG’s project would operate within this protected domestic market, insulated from import duties. US domestic magnesium prices have historically traded at a substantial premium to the FOB China price — a structural advantage that a domestic producer captures directly.
South Carolina — why LMG chose this site and what’s already in place
Infrastructure, utilities and state backing
LMG selected South Carolina on the basis of its port and rail infrastructure, available industrial sites with committed utilities, competitive energy tariffs, a skilled industrial workforce, and the level of support offered by the State of South Carolina.
The preferred site has access to the Port of Charleston (deepwater access), Class I rail connectivity, and interstate highway access on the US Eastern Seaboard. LMG is currently negotiating a 50-year lease with South Carolina Ports Authority for access to a dedicated pier and 11 acres of land at Veterans Terminal. Palmetto Railways, South Carolina’s state-owned railroad, is proposed as the direct rail link between the port and the project site. South Carolina’s energy mix includes a significant nuclear baseload component, supporting competitive industrial electricity and natural gas tariffs, which are material given energy represents approximately 22% of the operating cost estimate.
Utilities have been confirmed: Coastal Electric Cooperative (power), Dominion Energy (natural gas), and the South Carolina Department of Environmental Services (water). A substantial incentives package from the State of South Carolina has been received, comprising cash grants, in-kind services and tax incentives, pending site purchase and formal application. The quantum of the incentives package has not been disclosed, and the financial model presented does not include these incentives, representing potential upside.
Feedstock and offtake — supply and demand already secured
Feedstock is 100% covered by LMG’s binding 20-year MOU with Société Le Nickel (SLN, Eramet group). The project requires 340 ktpa of ferronickel slag. SLN holds an existing stockpile of approximately 28 Mt and has the potential to generate a further approximately 1.8 Mtpa, roughly six times the project’s annual feedstock demand, supporting an estimated 60-year project life.
On the demand side, LOIs representing 32 ktpa have been secured from the following named customers:
- Metal Exchange LLC — minimum 25 ktpa (expansion of existing North American distribution agreement; MX pre-payment obligations from 31 March 2026 remain unchanged)
- Meridian Lightweight Technologies — 5 ktpa (North America’s largest magnesium die caster)
- Twin City Die Castings Co — 2 ktpa (Minneapolis, Minnesota)
Beyond these LOIs, LMG’s customer enquiry database records inbound enquiries from North American customers for up to 110 ktpa and global enquiries totalling 285 ktpa. These are indicative expressions of interest rather than commitments. The LOIs are non-binding and are intended to be converted into binding offtake agreements in parallel with project financing.
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Path to production — timeline, funding and next steps
The announcement describes the US project as LMG’s “most strategically important, fastest and most capital-efficient path to commercial magnesium production.” The development pathway, as disclosed, follows this sequence:
- Site purchase (South Carolina) — negotiations underway
- Binding logistics and utilities agreements — negotiations underway
- Pre-FID funding of US$30M — discussions underway with US financial institutions
- Feasibility Study commencement — end of Q1 2027, 12-month duration
- Permitting commencement — Q3 2027
- Final Investment Decision — March 2028
- Construction start — April 2028 (estimated over 3 million work hours; peak workforce of 1,250)
- First production — April 2030
The permanent workforce is estimated at 150 personnel across management, technical, operations and maintenance roles. LMG is in negotiations to provide funding for feasibility and setup costs of US$30M in return for project-level equity in the US subsidiary.
On LMG’s other projects: the Victorian Stage 1 Demonstration Plant is targeting first magnesium metal production in 2H CY2026. The Victorian Stage 2 Commercial Plant remains on hold pending resolution of the trailing liability legislation. The Malaysian project is pending DOE confirmation of New Caledonia’s non-OECD status through government-to-government communication. LMG expects that matter to be resolved in the medium term.
LMG’s Victorian program follows a distinct feedstock path from the US project, with coal fly ash project development underpinning the Stage 1 Demonstration Plant targeting first magnesium metal production in 2H CY2026.
The project remains conditional on securing pre-FID finance, completing the site purchase, formally engaging an engineering partner, and completing binding logistics and utilities agreements.
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