U.S. Export Import Bank considers loaning up to $200 million to Latrobe Magnesium

Latrobe Magnesium, which is commercialising a method of extracting magnesium and other useful material from brown coal fly ash, is one of seven Australian companies receiving Letters of Interest (LOIs) totalling over $US 2.2 billion (approximately $3.4 billion) from lender the U.S Export Import Bank (EXIM.)

According to a statement from Latrobe Magnesium, EXIM’s financing would be worth up to US $122 million ($200 million) over a 15-year repayment period, and cover construction of a Stage 2 commercial plant with 10,000 tonne per annum capacity for magnesium metal.

The LOI and the six others from EXIM are non-binding. Other companies were Arafura Rare Earths, Northern Minerals, Graphinex, VHM, RZ Resources, and Sunrise Energy Metals

Managing Director of Latrobe, David Paterson said, “We thank EXIM for supporting our project and our ability to supply magnesium to the United States within the short term.

“The United States [does] not currently have a local primary magnesium producer and LMG is ideally situated to fill this gap in the short and medium term.”

Latrobe was part of a recent CEO delegation to Washington and New York facilitated by Austrade, and the LOI announcement comes on Tuesday (Australian time), shortly following the signing of a bilateral framework on critical minerals and rare earths signed at the White House.

It also follows last week’s placement by the ASX-listed company, which raised $6 million from investors.

Latrobe said it will be appointing Bechtel to undertake a bankable feasibility study for the Stage 2 commercial plant, which has an estimated completion time of nine months. It estimates construction of the plant will be $250 million, covered by $200 million in debt and $50 million in equity.

All of the Stage 2 plant’s magnesium metal output is allocated to US customers. Latrobe intends to complete the plant “in the heart of Victoria’s coal power generation precinct” in the second half of 2027.

It is currently operating a demonstration plant, which is producing magnesium oxide, and intends to open the full plant in the first quarter of 2026.

Magnesium is a critical mineral, with uses including in alloys, and an estimated 90 per cent of production occurs in China, with a further 6 per cent in Russia.

The news follows the announcement of financial commitments by the US and Australia, which is expected to lead to the opening of the Alcoa-Sojitz Gallium Recovery Project in Wagerup, Western Australia.

Picture: magnesium oxide produced from fly ash (credit Latrobe Magnesium)