Great interview with François Perras, CEO of Alliance Magnesium | Succeed where others have failed

(Danville) The project to build a magnesium processing plant from asbestos mining residues on the site of the former Magnola plant in the Eastern Townships is progressing at a good pace. We will not only produce green magnesium there, but we will carry out multiple transformations with the production of amorphous silica and nickel-cobalt to supply the electric vehicle battery sector. An industrial resurrection planned for 2025, explains the new CEO of Alliance Magnesium, François Perras.

Alliance Magnesium was created in 2012, when a group of investors and developers bought the dumps (piles of waste) from the former Magnola factory of the company Glencore, which had closed the Danville site in 2003, unable to compete with Chinese producers, responsible for 85% of world magnesium production.

Last year, Alliance Magnesium launched the production of secondary magnesium in a demonstration smelter built on the site where products are recycled to make ingots.

“From January, we should be able to reach our cruising speed and transform 600 tons of magnesium per month in the foundry, but we plan to start the real project in the second quarter of next year with the construction of a new factory.

How does Alliance Magnesium intend to succeed in making a magnesium plant profitable when others who have tried to do so before it have failed miserably?

The Norwegian company Norsk-Hydro closed its Bécancour plant in 2007, which it had built at great expense in 1986, and Magnola – a joint venture between Noranda and Société Générale de Financement (Investissement Québec) – closed its shop in 2003 after having invested more than 1 billion in its Danville magnesium processing plant.

New context, new challenges

“The context has really changed. Norsk-Hydro did not control its raw material, it bought it from China, which sold it at a high price while it sold its magnesium at a discount on the North American market.

“For its part, Magnola did not control its technology and was never able to optimize its production, while it too was a victim of Chinese dumping”, recalls François Perras.

Alliance Magnesium is setting its project in motion in a completely new environment at a time when we want to shorten supply chains and especially when we want to reduce our carbon footprint to a minimum.

“We don’t do mining, we rehabilitate a site where we recycle mine tailings. There are 120 million tonnes of mining dumps that we will be able to recycle. We expect to process 120,000 tonnes per year. We have an asset for several generations. »

All manufacturers in the world must decarbonize their supply chain and Quebec green magnesium will allow them to contribute to improving their balance sheet.

Magnesium is 75% lighter than steel and 33% lighter than aluminum. It is used by automobile manufacturers, aluminum processors to make cans, the aeronautical industry and the military sector.

The growing polarization with China will force many manufacturers to find other suppliers.

“North American consumption of magnesium is 180,000 tons per year. There is only one American producer, US Magnesium, which has been out of production for a year. So there is a demand. Europe also consumes 180,000 tonnes annually and has no producer and relies mainly on China”, specifies François Perras.

Multiple transformation and financial partners

The plant that Alliance Magnesium is about to start aims for multiple processing. In addition to magnesium, the industrial process will produce amorphous silica, used in the manufacture of tires, concrete, computer and telephone screen windows, etc., and nickel-cobalt, necessary for the manufacture of batteries. for electric vehicles.

“We will use the asbestos serpentine that we melt with chlorine to manufacture 40,000 tonnes of amorphous silica per year and in the process, we will harvest in a second stage iron cakes with a high concentration of nickel. -cobalt.

The construction and start-up of the Alliance Magnesium plant will require investments of more than 1.5 billion. The current shareholders who have invested $85 million in the pilot project since 2012 are the Quebec investment firm Alternative Capital Group (37%), Investissement Quebec (14%), a Japanese magnesium distributor (13%), Fondaction (9 %) and some private shareholders.

“We are in the round of financing and we have approached financial investors specialized in the sector and potential customers [fabricants d’autos et d’ordinateurs/téléphones] and other users such as aluminum producers who need magnesium. Funding is expected to end by mid-2023,” says François Perras.

In office since the beginning of November as the new CEO of Alliance Magnesium, François Perras is convinced of the success of the project with which he has joined.

A metallurgical engineer by training, holder of an MBA, he was chief of staff of the management office at the head office of ArcelorMittal, in Luxembourg, before returning to Quebec where he held various positions in the multinational steel company.

He was for five years the CEO of ArcelorMittal Long Products Canada, which operates nine steel processing plants, including the Contrecœur, Longueuil and Montreal complexes, which employ 2,000 people and achieve a turnover of 2 billion while with very good profitability.

“We are going to allow the local supply of magnesium while contributing to the decarbonization of the economy and the recovery of mining waste. We can no longer always exploit the earth to extract minerals, there are limits. We are revitalizing an old site by developing several product portfolios. It’s an exciting project, my 13-year-old son told me. »