Latrobe Magnesium (ASX:LMG) began magnesium oxide production at its Hazelwood North demonstration plant in Victoria, marking a major operational milestone and paving the way for commercial by-product offtake agreements, according to a Thursday filing with the Australian bourse.

Production began after brief storm-related delays in ash deliveries, with over 200 tonnes received and ongoing shipments compliant with Environment Protection Authority regulations, the filing said.

The plant is ramping up toward a steady-state output of 1,000 tonnes per annum, supported by stable reagent supplies and scheduled maintenance for training and process optimization, per the filing.

The plant has produced by-products including char, silica, iron oxide, and agricultural lime, with validation trials underway to secure long-term offtake agreements, the filing added.