Latrobe Magnesium Secures $6.29M R&D Rebate, Accelerates Production Plans
Latrobe Magnesium Limited has received a $6.29 million R&D tax rebate from the ATO, using the funds to reduce debt and progress its magnesium production plants in Australia and Malaysia.
- Received $6.29 million R&D tax rebate including interest
- Rebate used to repay $8.9 million in R&D-related debt and equipment leases
- Contracts in place to sell two lots totaling $2.8 million with settlements by mid-2026
- Extended R&D lease to 2027 amid ongoing financier negotiations
- Advancing magnesium extraction plants in Victoria and Sarawak, Malaysia targeting commercial production by 2028
Significant R&D Rebate Boosts Financial Position
Latrobe Magnesium Limited (ASX, LMG) announced it has received a $6.29 million research and development (R&D) tax rebate from the Australian Taxation Office, including approximately $31,000 in interest. This substantial rebate reflects the company's ongoing investment in its innovative magnesium extraction technology and provides a timely financial boost.
The rebate proceeds have been strategically applied to repay outstanding R&D-related debt and equipment lease liabilities, which together total approximately $8.9 million. This debt reduction effort is a key step in strengthening Latrobe Magnesium’s balance sheet as it prepares for the next phase of its development.
Progress on Asset Sales and Lease Extensions
Latrobe Magnesium has contracts in place to sell two lots valued at a combined $2.8 million, with settlements expected by mid-2026. The company has already issued a contract for one lot worth $1.5 million, with the buyer demonstrating strong interest. These asset sales are expected to further support the company’s financial flexibility.
In parallel, Latrobe has extended its R&D lease to 2027, although negotiations with financiers continue regarding the terms and validity of this extension. The company has disclosed a contingent liability related to this lease, which remains under discussion. Management has committed to keeping shareholders informed as these negotiations progress.
Advancing Magnesium Production Projects
Latrobe Magnesium is developing two key magnesium metal extraction plants, a Demonstration Plant in Victoria and a larger-scale 'Mega' Plant in Sarawak, Malaysia. The Demonstration Plant, which utilises a patented hydrometallurgical and thermal reduction process, is scheduled for commissioning in the first half of 2026. This facility aims to validate the technology and produce magnesium metal from industrial waste ash, a resource currently considered a byproduct of brown coal power generation.
Looking ahead, the company targets commercial production of 10,000 tonnes per annum at the Victorian plant by mid-2028. Meanwhile, the Malaysian subsidiary, Latrobe Magnesium Sdn Bhd, is progressing a pre-feasibility study for a 100,000 tonnes per annum plant in Sarawak, leveraging ferronickel slag as feedstock. Both projects underscore Latrobe’s commitment to sustainable, low-carbon magnesium production aligned with environmental, social, and governance (ESG) principles.
Positioning for a Circular Economy
Latrobe Magnesium emphasises the environmental benefits of its technology, which recycles industrial waste and reduces landfill, contributing to a circular economy. Magnesium’s strength-to-weight ratio makes it increasingly attractive across automotive, aerospace, electronics, and medical industries, sectors that are prioritising sustainable materials.
With these developments, Latrobe Magnesium is positioning itself at the forefront of next-generation magnesium production, combining innovative technology with strong ESG credentials.
Bottom Line?
Latrobe Magnesium’s R&D rebate and debt repayment mark a pivotal step as it advances toward commercial magnesium production and sustainable growth.
Questions in the middle?
- How will ongoing lease negotiations impact Latrobe Magnesium’s financial commitments?
- What is the timeline and certainty around the settlement of the contracted lot sales?
- How will the Demonstration Plant’s performance influence the scale-up to commercial production?
