- Pentagon seeks proposals to address US defence supply gaps in magnesium and three other metals, its third DIBC solicitation since mid-2025
- A Wall Street Journal op-ed urges a US magnesium revival, warning America produces none and China controls 90% of supply.
- LMG targets first magnesium metal in H2 2026 while US Ex-Im has flagged up to US$122m for planned 10,000tpa plant.
Special Report: America’s hunt to secure critical minerals has magnesium firmly in its sights just as an Australian project already backed by US customer demand moves closer to first metal.
The Pentagon this week called on US critical minerals companies to submit investment proposals aimed at addressing supply gaps in magnesium, indium, manganese and titanium used in defence applications.
It is the Defense Industrial Base Consortium’s third investment solicitation involving critical minerals and advanced defence technologies since mid-2025, highlighting the growing focus Washington is placing on securing strategic mineral supply chains.
The issue has also moved firmly into the political spotlight. A Wall Street Journal op-ed published this week by Republican congresswoman Elise Stefanik warns that the US no longer produces a single tonne of primary magnesium, while China controls about 90% of global supply.
Magnesium matters well beyond “mag wheels”. It is used in aluminium alloys, steel and titanium production, and across aerospace, vehicles, missiles, drones and other defence applications.
Stefanik called for the US to target 200,000t of domestic magnesium production annually by 2030 and pointed to extracting magnesium from seawater as one route to rebuilding supply.
The idea has history. The US produced magnesium from seawater during WWII, but the newer technologies being developed to revive that pathway remain at research or pilot scale rather than commercial primary-metal production.
That is where Australian player Latrobe Magnesium (ASX:LMG) enters the picture.
LMG is targeting first magnesium metal from its 500tpa Demonstration Plant in Victoria’s Latrobe Valley in the second half of 2026.
Its July project update said construction was 50% complete and commissioning work was advancing, after a prototype furnace test at 1180C resolved a known technical risk.
The company has already achieved continuous production of high-grade magnesium oxide from brown coal ash.
An investor presentation in April outlined that about 20t of 90%+ MgO was produced over a two-week continuous run, with the material suitable for the next step into magnesium metal production.
First metal will therefore be an important further validation of LMG’s process rather than the starting point for the technology.
US connection in place
The US Export-Import Bank issued the company a non-binding letter of interest in October 2025 indicating it would be prepared to consider up to US$122m in financing for LMG’s proposed 10,000tpa Stage 2 Commercial Plant, subject to an application and standard due diligence.
Ex-Im chairman John Jovanovic linked the interest to US national security, supply-chain resilience and reliable access to critical minerals.
There is also a ready customer base. LMG says 100% of the proposed Commercial Plant’s magnesium output is allocated to the US market under offtake arrangements, where it would be distributed by St Louis-based Metal Exchange Corporation.
Metal Exchange has already made a US$2m prepayment against future magnesium deliveries.
While Stefanik has called for 200,000tpa of US production by 2030, rebuilding that capacity will take time and likely require multiple sources of supply.
LMG’s proposed 10,000tpa commercial plant could form part of that longer-term supply mix, providing the US with a dedicated source of non-Chinese magnesium under existing offtake arrangements.
A different magnesium route
LMG also offers a different technical pathway to the seawater proposal highlighted in the Wall Street Journal.
Its patented hydrometallurgical process recovers magnesium from brown coal fly ash, turning an existing industrial waste stream into feedstock rather than developing a new mine.
The company says ash available from Yallourn Power Station and existing stockpiles could support the planned 10,000tpa operation for decades.
There is an environmental angle as well. LMG estimates the commercial plant would produce around 6.6t of CO2 per tonne of magnesium, compared with an industry range of roughly 20-40+ tonnes for conventional production.
Those figures remain company estimates to be tested at commercial scale, but they point to why the process has attracted interest as a lower-carbon alternative to China’s energy-intensive Pidgeon process.
For LMG, the next milestone is straightforward: make magnesium metal at the Demonstration Plant before the end of the year.
If it does, the timing could hardly be more relevant.
This article was developed in collaboration with Latrobe Magnesium, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
