Latrobe Magnesium (ASX:LMG) has signed an agreement with Germany's RWE Power to investigate the commercial viability of its hydromet process in Europe.
The two companies will first assess the results of hydromet and laboratory test work over the past year on the RWE brown coal fly ash from its Hambach mine near Cologne.
LMG achieved 70% iron removal from RWE Power's fly ash using the hydromet process, but is looking at additional measure to remove more iron content.
This is likely to be achieved by adding a physical separation step or by reconditioning the fly ash's mineralogy.
The results of the study will help determine how to proceed with the development of a magnesium plant in Germany.
Both companies have identified the fly ash from Hambach mine as most suitable to commercially extract magnesium. Initial estimates indicate that some 80,000 tones of magnesium and 500,000 tonnes of cementitious material could be produced annually.
Europe imports most of its magnesium from China.
But based upon Australian adjustment studies, LMG's process is cost competitive with Chinese producers.
Latrobe Magnesium is developing a magnesium production pant in Victoria's Latrobe Valley using a patented extraction process that utilises the industrial fly ash, which is currently a waste stream from brown coal power generation.
It recently completed a pre-feasibility study validating its combined hydromet/thermal reduction process that extracts the metal.
Production from the initial 5,000 tonne per annum magnesium plant is due to start in July 2015. The plant will be in the heart of Victoria’s coal power generation precinct, providing immediate access to feedstock.
The company's refined magnesium will be sold under long term contracts to the domestic market and the US.
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