Global steel production began to recover last year and the
first few months of 2017 have also shown strong growth in
worldwide crude steel volumes. While this looks like a positive
indicator for refractory minerals like magnesia, sharp cuts to
steelmaking capacity in China, low capacity utilisation rates
and moves towards consolidation in the European steel sector
means that net demand growth for refractories remains under
Nevertheless, several companies around the world are looking
to enter the magnesia market or expand within it, in the
expectation that refractories demand will rebalance and that
opportunities in areas such as agriculture will bolster
consumption volumes and prices.
The world’s leading importer of magnesite and
magnesia, the US, saw imports increase in 2015 to 571,000
tonnes from 362,000 tonnes in 2014, but volumes then fell back
again to 348,000 tonnes in 2016 (see Figure
The majority of US imports are magnesia, rather than
magnesite, with the former making up around 86% of the volume
it received in 2015. According to the US Geological Survey
(USGS), US imported and locally produced magnesia is
predominantly caustic calcined magnesia (CCM) for use in the
chemical industry, agricultural supplements and environmental
In 2016, the leading sources of US magnesia/magnesite
imports, in descending order, were China, Brazil, Canada,
Australia, Turkey and Russia. Last year, imports from China as
a percentage of the overall quantity fell by four percentage
points from 2015, while shipments from Brazil, Australia, and
other countries also fell slightly. By contrast, imports from
Canada rose 5% and those from Turkey increased by 2% (see
The quality of the starting ore is an important determinant
of the quality of the magnesia product and therefore only
certain sources around are able to meet the standards of end
users, which are often located in different parts of the world
to the best magnesite mines.
Mike Miller, an industry consultant based in Perth,
Australia, has conducted various CCM-MgO product evaluations
for benchmarking purposes. He told IM that
magnesite mineralogy is important for CCM quality for two
"First, the presence of impurities in the magnesite largely
determines the final magnesia grade. Secondly, fine-grained
(cryptocrystalline) magnesite, under the correct calcination
conditions, produces fine-grained magnesia, which has a higher
population of reactive sites along the extended grain
boundaries. For this reason, coarse-grained magnesite generally
produces less reactive magnesia," he said.
Canadian magnesite projects
Canada’s growing share of the US magnesia
market is encouraging for projects such as Karnalyte Resources
Inc.’s carnallite-sylvite mineral deposit, located
near Wynyard in Canada’s Saskatchewan province.
The company hopes to produce magnesium chloride brine, as well
as a synthetic magnesium carbonate (see box).
According to its NI 43-101 report released in June 2016,
Karnalyte’s synthetic magnesium carbonate product
can be used in the paint and printing industries as well as in
fireproofing, fire-extinguishing, flooring, polishing compounds
and as fillers and smoke suppressants in the paper, plastics
and rubber industries.
It notes that high purity magnesium carbonate is also used
as an anti-caking agent in salt, as a bulking compound in
powder formulations and as an antacid.
In late 2016, Karnalyte announced plans to build a pilot
magnesia production plant to make samples that can be used to
fully explore potential markets. The company aims to produce
18,000 tpa high-purity magnesia.
Elsewhere in Canada, MGX Minerals Inc. is looking to build a
magnesite mine at Driftwood Creek near Cranbrook in British
Columbia. Last year, the company conducted a drilling programme
to obtain a 100 tonne magnesite bulk sample for detailed
metallurgical testwork and has since commenced a preliminary
economic assessment (PEA) of the project.
West High Yield Resources Ltd (WHY) is also developing a
project in British Colombia, located between the US border and
Vancouver, and is currently working on environmental studies
and a mine plan, along with micro-plant scale production
simulation tests being undertaken by US-based Drinkard
In Quebec, Mag One Products Inc. is due to begin
constructing a magnesium compound plant this year to process
serpentinite tailings using its own proprietary technology. The
initial plant has a projected capacity of 18,000 tpa magnesia,
but will also aim to produce magnesium metal. Rather than
establishing a vertically integrated business model based on
its own magnesite mines, Mag One is looking to become a
technology and processing company, producing materials that
target the magnesium-based structural-insulated sheathing
Australian magnesite projects
Along with a number of magnesite development projects,
Australia has various active magnesite mines, including the
Kunwarara deposit near Rockhampton in eastern Queensland, which
is the world’s largest known source of
ultrafine-grain cryptocrystalline to microcrystalline nodular
magnesite. The mine produces approximately 3m tpa magnesite
ore, according to USGS estimates, and belongs to Belgian
speciality mineral company, Sibelco.
Causmag International’s Thuddungra project near
Young in New South Wales (NSW) has a production capacity of
approximately 18,000 tpa. The company had its licence suspended
in August 2016 over unpaid environmental fees, although this
was lifted later that month by the NSW Department of
Industry’s Resources Regulator, after the company
paid a Australian dollar ($A) $540,000 ($407,457*) environment
rehabilitation security deposit.
While Canadian magnesia companies have robust market
opportunities in North America, particularly in neighbouring
US, their peers in Australia are naturally looking to Asian
Australian magnesia producers already have strong export
relationships with some Pacific nations, including New Zealand,
where there is a growing market for agricultural lime
(see Figure 4). But the prospect of growing
populations in the Association of South East Asian Nations
(ASEAN) region and their projected demand for magnesium-based
chemicals tends to be cited as the justification behind the
expansion of many existing Australian magnesite projects and
the development of new ones.
Thessally Resources Ltd, an Australian exploration company
focused on the Huandot magnesia project 80km south of Darwin in
the country’s Northern Territory, sees future
demand growth coming from the ASEAN.
Formed in 2015, ASEAN includes Indonesia, Malaysia, the
Philippines, Singapore, and Thailand, Brunei, Cambodia, Laos,
Myanmar and Vietnam and has a population of more than 600m and
a nominal GDP of $2.31 trillion.
Indonesia imported around 90,000 tonnes magnesite and
magnesia in 2015, up from around 70,000 tonnes in 2011, an
increase of around 30% (see Figures 5 and 6).
Australia has various free trade agreements with ASEAN
members, giving its magnesia exporters a potential advantage
over suppliers from other Western nations.
"ASEAN is rapidly becoming a very important customer for
magnesia products," Thesally Resources told
IM. The company is optimistic about high
growth rates in the region’s agricultural sector,
which may ultimately become a food supplier to large consumers
Thessally’s Huandot project is based on a
shallow, macrocrystalline magnesite deposit with a JORC
resource (indicated and inferred) of around 9m tonnes at 44%
magnesium oxide (MgO). Approximately 25,000 tonnes of ore has
been lifted from the deposit on a trial mining basis and bulk
samples have been sent to the Canadian arm of Norway-based
aluminium producer, Norsk Hydro, for testing.
Thessally has also performed various end user specification
studies on CCM and is currently looking for equity partners
with an interest in offtake agreements for Huandot
Also in the Northern Territory, diversified mineral explorer
Korab Resources Ltd is developing the Winchester magnesite
deposit, for which it completed a pre-feasibility study (PFS)
in March 2015. Following the release of the Winchester PFS,
Korab entered a $6m development funding arrangement with
undisclosed Chinese steel interests.
The company believes that the growing market for magnesium
carbonate will continue to expand, due primarily to demand for
MgO in refractory bricks, flame retardants, fire and
moisture-resistant building materials, magnesium alloys,
hydrometallurgy, water purification and soil treatment.
In South Australia, Archer Exploration Ltd is working on the
Leigh Creek magnesite project, which claims to be the
world’s largest cryptocrystalline (fine grained)
magnesite deposit at 453m tonnes at a grade of 41.4% MgO.
Archer recently announced that its magnesite is being tested
by the Australia-based Commonwealth Scientific and Industrial
Research Organisation (CSIRO), with dead burned magnesia (DBM)
and CCM products currently being assessed.
Calix Ltd, an Australian magnesium materials company, built
its first flash calciner at Bacchus Marsh in the state of
Victoria in 2011 and acquired mining tenements in South
Australia in 2012, giving it access to high grade magnesite. By
2014 the company had built its first magnesium hydroxide liquid
manufacturing facilities in Victoria and Queensland.
The company is currently exporting to Europe and South East
Asia and in early March it announced that its BOOSTER-Mag
product had achieved registration as a fertiliser in the
Philippines "for almost all crops". The trademarked product is
applied to crops as a foliar spray to promote plant growth and
The Philippines currently imports over 4,000 tpa magnesium
minerals, of which China is the main supplier.
Calix also sells its ACTI-Mag water treatment product in the
Philippines and has reported growing sales across its product
lines, including for air treatment and infrastructure.
"We are focusing on high value, new markets being developed
in Australia and overseas as a result of our patented calcining
technology," Calix told
IM, adding that it hopes to expand into the
US and China by its next financial year.
The Bandalup magnesite project (BMAG) near Ravensthorpe in
Western Australia recently began producing small amounts of
magnesite. The company told IM that the first
600 tonnes have so far been extracted from the site for use as
an alternative liming agent to limestone and as a source of
magnesium in broadacre (large scale crop) farming.
The company is looking to mine around 20,000 tonnes
magnesite over 2017-2018 under its approved programme of
Last year also saw Jindalee Resources Ltd obtain the Arthur
River and Lyons River magnesite deposits in Tasmania, now
rechristened as the Prospect Ridge magnesite project.
|Terna Group in Greece are deliberating over whether
to proceed with
the third phase of their magnesite project.
Rest of the world magnesite projects
Apart from China, which continues to dominate the global
magnesia market, there are few countries outside Canada and
Australia where significant new magnesite deposits are being
Russia’s Magnezit Group is a major producer of
magnesia for Russian and CIS nations and has a number of new
deposits under licence, at various stages of
Austrian refractories producer RHI AG owns magnesite mines
in Austria, Italy, Turkey and China and recently agreed to
merge with Brazilian producer Magnesita SA, consolidating the
company’s Brazilian mines with its own
The Turkish magnesia industry has had a difficult time in
the last few years and early 2016 saw the closure of 50-year
old magnesia company, Superates, due to tough trading
conditons. Others, like Akdeniz Mineral Kaynaklari, which is a
joint venture with Greece’s Grecian Magnesite,
have managed to weather the tough market by concentrating on
high purity, speciality CCM and other types of magnesia.
In view of the uncertainty about the future of the magnesia
industry, over the last few years, Greek magnesite miner Terna
Mag S A has been deliberating over whether to proceed with the
third phase of its magnesite project on Euboea island in
southern Greece. Last year, its parent, GEK Terna Group said it
had decided to invest around €100m ($106.7m) in its
facilities at Mantoudi Evia to produce CCM, DBM and magnesium
hydroxide. Around €25m of this had been spent as of 30
Having reported a small rise in revenues in the six months
to the end of June 2016, the company predicted strong demand
growth for CCM, which unlike other types of magnesia has a
diverse end user base, over the coming years.
RHI however recorded a decline in 2016 revenues in its
preliminary earnings statement, which it attributed to
continued falling demand for magnesia in refractories due to
rising steel inventories.
RHI has recently stated that it considers the company has
met its target of strategic raw material vertical integration
and its priority is now to balance its use of internal magnesia
supply with external purchasing and selling options.
Exploration companies such as Archer and Korab are now chasing
cobalt, and it looks like until magnesite prices go over the
$250/tonne mark, and general demand picks up, these projects
will remain sidelined for years to come.
|Magnesite ore displaying a stromatolitic texture at
2017: Make or break for magnesia?
According to the USGS, the leading end use of magnesia
continues to be in refractories for the steel industry.
According to the World Steel Association (worldsteel), world
crude steel production increased by 0.8% last year from 2015 to
1.63bn tonnes, although this was still 1.8% lower than the
1.66bn tonnes produced in 2014.
China, which accounts for half of global steel output, has
pledged to slash its steelmaking capacity and claims to have
cut 65m tonnes in 2016 – although these figures have
been questioned in light of export and inventory data. The
country has said it will axe a further 50m tonnes of steel
capacity this year, and whatever the success of the policy, the
nominal trend is likely to mean lower refractories
Chinese demand for DBM and fused magnesia (FM) is expected
to decrease with steel production and the lack of any
coordinated reduction policies in the refractories sector has
meant a surplus of supply. IM reported in
March this year that Chinese magnesia export volumes surged in
January while the value of the material plummeted, according to
Chinese customs data.
Even CCM has not been immune, with average price of CCM
exported in January falling by 14.17% month-on-month to
$162.33/tonne, the lowest value seen in the last four years of
obtainable customs data.
On the other hand, it has been suggested that environmental
crackdowns in China’s magnesia industry could curb
supply by forcing closures of some of the most polluting
plants, which may lend some support to prices.
Most new magnesia suppliers, though, are thinking beyond
refractories and looking at alternative markets like
agriculture which have promising growth projections.
Better technology and investment in R&D are also helping
to create new applications for magnesia, which may benefit from
a shift towards speciality chemicals as traditional bulk
markets come under increasing pressure.
*Conversions made March 2017
Magnesia and magnesite
Magnesia is commonly produced by either calcination of
naturally occurring magnesium-bearing minerals or by
calcination of magnesium hydroxide that has been precipitated
from liquid sources (see below). The latter form is
known as synthetic magnesia.
Magnesite + heat = magnesia + carbon dioxide
MgCO3 + heat = MgO + CO2
Magnesia can also be produced from the calcination of
brucite (magnesium hydroxide), but this source is limited by
the availability of economic ore deposits.
The calcination of magnesium hydroxide that has been
precipitated from seawater, brine or similar sources produces
Synthetic magnesia is generally purer than other magnesia
grades, but is more expensive to produce than magnesia made
from magnesite. Due to this cost premium, synthetic magnesia is
generally excluded from use in the hydrometallurgical