Latrobe Magnesium begins Magnesium Oxide production at Hazelwood

Key highlights:

• First product out: Latrobe Magnesium’s Hazelwood North Demonstration Plant has produced magnesium oxide (MgO) and is stockpiling for initial offtake shipments. 
• Ramp-up plan: Operations are building toward ~1,000 tpa steady-state with scheduled maintenance pauses used for training and preventative work. 
• By-products made at scale: Char, silica, iron oxide and agricultural lime now produced from brown-coal ash; validation trials with potential buyers to begin. 
• Supply chains secured: Deliveries include LPG (Origin Energy), industrial gases (Coregas) and acid (Ixom); ash logistics operating under EPA Victoria’s waste tracker. 
• Strategy and timeline: Demonstration Plant underpins full-flowsheet commissioning in Q1 2026; 10,000 tpa Commercial Plant targeted 2H 2027; Sarawak “Mega” Plant concept at 100,000 tpa progressing through PFS phases. 
  
   

What changed today—and why it matters

Latrobe Magnesium (ASX: LMG) has crossed a pivotal line: the company confirmed first MgO production from its Hazelwood North Demonstration Plant, a milestone that validates the core, proprietary elements of its patented flowsheet and reduces commissioning risk ahead of full-plant start-up. Severe weather briefly stalled ash deliveries earlier in the month, but logistics are now flowing—more than 200 tonnes of ash arrived over the past two weeks—allowing the operations team to complete start-up and ramp toward steady state. 

For readers new to the story, MgO (magnesium oxide) is a key intermediate on LMG’s journey to magnesium metal production. Demonstrating stable MgO output from brown-coal ash is a proof point for the recycling-led flowsheet the company intends to scale in Victoria and, later, internationally. 

The operations picture: steady, deliberate ramp-up

LMG’s update described a disciplined commissioning approach: building operating knowledge, inserting planned maintenance pauses, and training crews so that future interruptions are shorter and recovery quicker. Importantly, critical reagents and energy inputs are contracted and arriving regularly—LPG (Origin Energy), industrial gases (Coregas) and acid (Ixom)—with EPA Victoria compliance in place for ash transport. This supply-chain stability is non-glamorous but crucial in early operations. 

The company is now bagging MgO in one-tonne units and moving product to storage ahead of first shipments to offtake partners. Alongside MgO, the plant is also producing char, silica, iron oxide and agricultural lime from the ash stream—by-products that LMG will put through validation trials with multiple counterparties to progress long-term offtake agreements for both the Demonstration Plant and the future Commercial Plant. If contracted, these streams can diversify revenue and improve unit economics. 

Management commentary: de-risking the flowsheet

Chief executive David Paterson framed the milestone plainly, noting it “validates the core proprietary components of the Company’s patented magnesium metal production process and further de-risks operations, representing another significant step forward,” while thanking shareholders for their support and recommitting to transparent updates. 

That wording matters. Early commissioning is where many first-of-kind projects slip. By confirming product on spec and keeping reagent and ash logistics running, LMG is knocking down the known unknowns that sit between a demonstration and a bankable commercial plant.

What the timeline looks like from here

• Demonstration Plant: MgO production underway; build to ~1,000 tpa steady-state through training, preventative maintenance and incremental optimisations. First offtake shipments are the near-term catalyst. 
• Full-plant commissioning: The full Hazelwood facility is scheduled to be commissioned in Q1 2026, enabling the company to complete performance runs across the combined hydrometallurgical / thermal reduction process. 
• Commercial Plant (Victoria): 10,000 tpa magnesium metal targeted for 2H 2027, leveraging proximity to feedstock, infrastructure and labour in the Latrobe Valley. LMG indicates sales will be placed under long-term contracts with a U.S. distributor. 
• International “Mega” Plant (Sarawak, Malaysia): Concept for 100,000 tpa magnesium metal using ferronickel slag feedstock; PFS-A completed and further phases to follow. 
  
   

Why magnesium—and why this process?

Magnesium has the highest strength-to-weight ratio among common structural metals, making it a key input for automotive light-weighting, aerospace, electronics and medical applications. LMG’s proposition is to recycle industrial ash that would otherwise head to landfill, extracting magnesium units while generating saleable by-products. In ESG terms, the flowsheet aims to reduce waste, support a circular economy, and operate with lower CO₂ intensity than conventional routes—all attributes that can help win customers and financing in today’s market. 

For a company with a ~A$71m market cap, each operational step—first shipments, by-product contracts, commissioning milestones—can move the valuation needle. But as with all first-deployment technologies, investors should expect non-linear progress: steady gains punctuated by fix-and-improve phases as teams learn the plant.

LMG’s first MgO marks a practical, measurable step toward commercial magnesium metal production. The operating cadence—ramp, pause, train, optimise—reads like a team intent on getting the small things right before scaling. If the company can ship first product, lock in by-product offtakes, and hit commissioning timelines into 2026, it will have done the hardest part: proving that ash-to-magnesium works outside the lab and at plant scale. For investors, that is the kind of de-risking that turns a long-shot concept into a business with repeatable cash flows. 

LMG traded at A$0.027 ( up by 17.39%) by 12:22pm AEST.