Japan-based Marubeni has agreed to acquire shares of Alliance Magnesium (AMI) and also signed a stock subscription agreement with AMI.

The Canadian company will construct a commercial plant to produce magnesium ingot in the province of Quebec.

The project is estimated to cost over C$100m ($75.93m), with Marubeni investing C$ 16.7m ($12.68m).

The construction of the plant is expected to begin in 2020 and the first ingot production taking place in the same year.

The project will involve extraction of magnesium from tailings (mine waste) which were discharged and deposited at an abandoned mine site in Quebec, and produce primary magnesium through the electrolysis process.

Marubeni said in a statement: “Magnesium is one of the materials whose demand has dramatically increased for the purpose of reducing the weight of vehicles. It is the lightest of all commonly used materials and very famous for its high vibration damping capacity, high strength to weight ratio and high stiffness to weight ratio.”

“Furthermore, the power used in the electrolysis process is sourced from hydroelectric dams, so that it is the cleanest magnesium production process available in the world with a greenhouse gas emission rate of only one-twentieth that of the usual process.”

AMI carried out technological verification and secured proper authorisation by using a pilot plant from 2017.

The magnesium plant will have production capacity of 16,700 tonnes annually

Marubeni further stated that the total production of magnesium will reach 16,700 tonnes per year during the full-scale commercialising of the new plant, which also comprises the production of magnesium alloy by recycling the magnesium scrap.

Production capacity is planned to reach 50,000 tonnes in the future which would account for nearly 5% of present global magnesium demand.

Marubeni stated: “With making use of our expertise in aluminum business, Marubeni will support to commercialize this project from the point of low environmental impact and creation of circular economy, and contribute to enhance the sustainability of global society through development and promoting green materials.”