Latrobe Magnesium Ltd’s planned exports of magnesium to the United States (US) will not be subject to the recently introduced import tariffs following a key exemption outlined in US Presidential action.
The exemption, detailed in Annex II of the April 2, 2025 executive order, reaffirms the status of magnesium as a critical mineral, enabling Latrobe to move forward with its US-focused sales strategy without incurring additional duties.
The company has reiterated its strategy to direct all planned magnesium production to the US market and expressed confidence in meeting rising international demand for this key material.
Competitive edge
The good news for LMG follows a sweeping trade measure introduced by the US Government to apply an ad valorem duty of at least 10% on all imports from trading partners. The action was taken to rectify perceived trade imbalances and strengthen domestic supply chains by imposing reciprocal tariffs. However, certain goods—including critical minerals such as magnesium—have been explicitly excluded from the new duties under Annex II of the Harmonised Tariff Schedule of the United States (HTSUS), with magnesium classified under Item 81041100.
This exemption provides a competitive edge for Latrobe, particularly as the US has simultaneously increased its anti-dumping duties on Chinese-produced magnesium by 54%.
Magnesium produced in China accounted for 87% of global supply in 2023: the anti-dumping duty is up to 111.73% when imported into the United States, further raising its market price.
The move aligns with the Critical Minerals Compact signed between the US and Australia in 2023 and reflects growing interest from US institutions, including recent enquiries from the US Department of Defense regarding magnesium oxide (MgO) supply.
This development significantly enhances Latrobe Magnesium’s competitive position relative to Chinese supply.
Demonstration plant restart
Latrobe is targeting a late-May restart of its demonstration plant, with plans to begin production of magnesium oxide (MgO) and move towards steady-state operations.
To support the restart, the company will focus on securing labour, replenishing reagent supplies, completing the ash stockpile, reinstating its management team, and finalising the Environmental Protection Authority’s (EPA) ongoing review of the plant’s operational plans.
To help with the restart, LMG secured A$2.75 million through an institutional placement and launched a fully underwritten Share Purchase Plan (SPP) to raise a further A$750,000, taking the total capital raising to A$3.5 million.
“I am pleased with our funding progress to allow the start of operations as per our revised strategy of producing steady-state MgO from our 1,000tpa Demonstration Plant, whilst we progress the construction of magnesium metal. The strong support for this equity raising reflects the desire to commence operations to demonstrate our ongoing success in derisking our technology and process, amidst difficult equity market conditions. It is gratifying to see the continued support to make us the first new producer of magnesium in the western world,” Latrobe Magnesium’s CEO, David Paterson said.
“The new funding will enable Demonstration Plant operation to produce MgO, demonstrate sustainable on-spec MgO production to the market, which LMG intends to sell to its Australian customers, collect data to support permitting activities for Stage 2 and build our experience base with our workforce.”