Latrobe Magnesium is shifting its growth priority to a proposed 50 ktpa magnesium plant in South Carolina, backed by 32 ktpa of non-binding customer interest and a 20-year feedstock agreement. The project carries substantial indicative economics, but still needs funding, site acquisition, feasibility work, permits and binding offtake contracts.
- Proposed 50 ktpa South Carolina magnesium plant with capacity to expand to 100 ktpa
- 32 ktpa of non-binding offtake letters of intent, equal to 64% of Phase 1 capacity
- Indicative capex of US$1.1-1.5 billion and EBITDA of US$320-615 million annually
- Feedstock covered by a binding 20-year ferronickel slag MOU with Société Le Nickel
- First production targeted for April 2030, subject to financing and approvals
South Carolina Becomes Latrobe Magnesium’s Priority
Latrobe Magnesium Limited (ASX:LMG) is redirecting its commercial ambition towards a much larger US project, targeting a 50,000-tonne-per-year primary magnesium plant in South Carolina with an option to double capacity to 100,000 tonnes. The proposed facility is designed to supply the US defence, aerospace, automotive and aluminium industries, in a market where the company says there is currently no operating commercial-scale primary magnesium producer in North America.
The shift gives LMG a more expansive project story, but not yet a construction-ready one. The preferred site remains under negotiation, the company is seeking funding for pre-feasibility and establishment work, and the project is conditional on financing, site acquisition, utilities and logistics agreements, permitting and a final investment decision.
32 Ktpa of Customer Interest, Yet No Binding Sales
LMG has received non-binding letters of intent covering 32 ktpa, or about 64% of the proposed first-stage capacity. Metal Exchange LLC has provided an in-principle commitment to expand its North American distribution arrangement to at least 25 ktpa, while Meridian Lightweight Technologies has indicated interest in 5 ktpa and Twin City Die Castings in 2 ktpa.
The company also reports enquiries for up to 110 ktpa from North American customers and 285 ktpa globally. Those figures are expressions of interest rather than commitments, however, and LMG says the existing LOIs must be converted into binding offtake agreements alongside project financing. The distinction matters: customer appetite is visible, but contracted revenue is not yet secured.
Indicative Economics Depend on a Large Capital Raise
LMG estimates the South Carolina plant would require US$1.1-1.5 billion of capital and incur operating costs of US$2,600-4,000 per tonne. Based on assumed magnesium prices of US$5,000-7,500 per tonne, plus by-product revenue, the company estimates annual EBITDA of US$320-615 million, an NPV10 of US$1.4-2.7 billion and an unlevered real IRR of 18-26% under its mid-case assumptions.
These are preliminary figures rather than bankable project economics. The assessment is based partly on adjusted prior study work, with Class 5 capital-cost and Class 4 operating-cost accuracy described in the announcement. It excludes the full benefit of South Carolina government support and remains sensitive to magnesium and silica prices, construction costs, operating costs and the ability to sell by-products. LMG is separately seeking about US$30 million for land, feasibility work, engineering, related studies and working capital before a final investment decision.
Feedstock and South Carolina Infrastructure Identified
A key advantage claimed by LMG is that the proposed plant’s feedstock is already covered by its binding 20-year memorandum of understanding with Société Le Nickel, part of the Eramet group. The project would process ferronickel slag containing about 33% magnesium oxide, with LMG estimating that an existing stockpile of roughly 28 million tonnes could support the operation for about 60 years at design throughput.
The preferred South Carolina location has access to power, natural gas, water, rail and highway infrastructure, with port arrangements still being negotiated. LMG has also received a proposal for a long-term lease covering a dedicated pier and adjacent land at the Port of Charleston. Bechtel has been nominated as engineering, procurement and construction management partner, although LMG still needs to formally engage an engineering partner and complete the relevant agreements.
US Incentives Strengthen the Case, But Remain Conditional
The State of South Carolina has offered a package comprising cash incentives, in-kind services and tax holidays. The support is pending the purchase of the preferred site and formal approval by state and county authorities, so it should not yet be treated as committed project funding.
LMG is positioning the project against a US magnesium market that relies heavily on imports, with China accounting for about 90% of global primary supply according to the announcement. The company is also responding to a US Defence Industrial Base Consortium request for proposals that includes magnesium among its critical-mineral priorities. Those policy signals may improve the project’s strategic appeal, but they do not remove the execution risk attached to a billion-dollar greenfield development.
Australian Project Slips Behind the US Plan
The new priority comes at the expense of near-term focus on LMG’s Victorian commercial plant, where progress remains constrained by unresolved trailing-liability legislation for declared mines. The company says that issue has already contributed about 12 months of delay, while its Malaysian project remains dependent on approval to import ferronickel slag into Sarawak.
LMG continues to target first magnesium metal production from its Victorian Stage 1 Demonstration Plant in the second half of 2026, with all output allocated to the US market under its Metal Exchange arrangement. For the South Carolina project, the next hard tests are less promotional: secure the site, raise the pre-FID funding, convert LOIs into binding contracts and demonstrate that the feasibility study can defend the proposed economics before the targeted March 2028 investment decision.
Bottom Line?
LMG has assembled a credible strategic case for US magnesium supply, but the investment thesis now turns on funding, binding customers and whether preliminary economics survive feasibility work.
Questions in the middle?
- Can LMG secure the US$30 million needed to reach a final investment decision without materially diluting shareholders?
- How much of the 32 ktpa in non-binding offtake interest can be converted into binding contracts?
- Will site, logistics, utility and government-support agreements be finalised in time for the March 2028 investment decision?