DANVILLE, QC, March 13, 2020 /CNW Telbec/ - Alliance Magnesium announces the closing of funding for its commercial demonstration plant for magnesium production, a plant with a capacity of up to 18,000 metric tons per year. This is an investment of near to $145 million ($M) in the MRC des Sources in Eastern Township area in Quebec, which will employ approximately 100 people during the construction and will create 102 jobs related to the plant operation.
The plant will produce primary magnesium ingots from serpentine and secondary magnesium tailings from recycling scraps from the metal processing industry. The construction of the plant is made possible by the shareholding of the Government of Quebec ($13.4 M), the Japanese company Marubeni ($16.7 M), Fondaction ($10 M) and the company's current shareholders. In addition, a senior loan of $50 M was signed with an American financial Institution and a loan of $12.5 million from the Quebec government. Sustainable Development Technologies Canada and Transition Énergétique Québec are also part of the funding with a financial contribution of respectively $12 M and $3 M.
"We are very proud to take this important step in creating jobs in a high-tech sector and developing our know-how in the production of this critical and strategic material in the most responsible way for the industry," said Dr. Joel Fournier, President and Chief Technology Officer. "We are also pleased to count on the participation of international partners in the project, which will ultimately enable us to position Quebec as an essential player in the production of green magnesium," added Michel Gagnon, Chairman and CEO.
The world's most responsible magnesium
Alliance Magnesium is committed to redefining industry standards with a process that will allow it to reduce the GHGs emitted per ton of magnesium produced by more than 22 tons compared to its international competitors. Magnesium is a very light material, at the heart of the transport electrification strategy. To date, most of the world's production comes from China, which generates more than 26 tons of greenhouse gases per ton of magnesium produced.
For Fondaction, supporting Alliance Magnesium means "subscribing to a new, more efficient, fairer and greener industry, driven by the circular economy, which has enormous potential. We are excited to be one of the partners in this exceptional project, which is part of two of our investment themes: the fight against climate change and the development of sustainable cities and communities." said Stéphan Morency, Chief Investment Officer at Fondaction.
Marubeni is pleased with the progress of the project, as Taichi Kuribayashi, President of Marubeni Canada, attests: "Marubeni is actively involved in this project, in collaboration with a strong management team and complementary partners. Magnesium is an indispensable raw material, as is aluminum, and its market is very promising. We are expanding our operations in Quebec, and our wish is to contribute even more to the province's economy. "
"This innovative project uses the circular economy to develop new magnesium manufacturing processes. In demand in the automotive and aerospace industries, magnesium is one of the solutions favoring lighter structures in order to reduce greenhouse gas emissions. Alliance Magnesium is committed to fully comply with the government directives that will be issued after the BAPE recommendations concerning the safe recovery of asbestos mine tailings for the subsequent stages. I am delighted that the government's support will make it possible to begin construction work on the casting center this spring, which will produce magnesium from recycled metal, " said Pierre Fitzgibbon, the Minister of Economy and Innovation.
Construction in spring, employment in fall
By today's announcement, Alliance Magnesium confirms the start of construction planned this spring, according to a schedule being established. This will begin with approximately a one-year construction of the smelter to produce secondary magnesium from recycled. The hiring of the company's first operators and direct employees will be phased in from the fall of this year. Then it will be the turn of the rest of the plant, for another full year of construction.
An essential material for sustainable transportation
Magnesium is growing rapidly, mainly in the transportation sector. Used to reduce vehicle weight, it is the lightest of all commonly used materials such as aluminum and steel. In addition, it is known for vibration damping, high strength-to-weight ratio, and high stiffness/weight ratio. Magnesium is also used in aluminum alloys and is considered one of the most important critical materials, both in Europe and the United States. Finally, magnesium fits perfectly into the Quebec government's strategy for transportation electrification, as well as the Climate Change Policy.
Alternative Capital Group Inc., one of Alliance's shareholders, also acted as Alliance Magnesium's advisor for the structuring of this transaction.
About Alliance Magnesium
Alliance Magnesium is a private Canadian company engaged in the production of metallic magnesium and other valuable minerals from serpentine. The company has developed an innovative technology and process that gives it a cleaner and less expensive approach than those currently used worldwide by magnesium producers. The magnesium produced by Alliance Magnesium is derived from the recovery of a mine residue, transformed by a clean process of electrolysis and sold on the transport markets to lighten, among other things, the weight of the vehicles and decrease their environmental footprint. The company has developed a three-stage deployment program, with annual production of 50,000 tons in 2024 and the creation of more than 250 jobs. Alliance Magnesium operates in accordance with health, safety and environmental standards.
SOURCE Alliance Magnesium Inc.
For further information: Pierre Saint-Aubin, Vice-President, Corporate Affairs, 514 946-9593, [email protected]; Karine Vallières, Director, Communications and Public Affairs, 819 620-7108, [email protected]