Tetra considers Arkansas magnesium project with Pentagon-backed Magrathea

By Ernest Scheyder HOUSTON, Dec 2 (Reuters) - Tetra Technologies (TTI.N) on Tuesday said it might form a joint venture with Pentagon-backed startup Magrathea to build the U.S.’s only magnesium refinery and boost domestic supplies of a metal used across a range of industries. The U.S. lost its only source of the mineral in 2022 when privately held U.S. Magnesium shuttered its Utah operations due to environmental concerns. China produces roughly 95% of the world’s magnesium, which is used in alloys for steel and aluminum across the aeronautics, energy and defense sectors, according to the U.S. Geological Survey. Texas-based Tetra said it signed a term sheet with Magrathea to study a JV that, if formed, would involve adding Magrathea’s new magnesium production technology onto Tetra’s bromine and lithium project in the Smackover, an underground geological formation stretching from Florida through Arkansas and into Texas. Tetra aims to filter bromine, lithium and magnesium from the Smackover’s brines before reinjecting the salty liquid back into the ground. Tetra said it has an understanding on financial and legal terms with Magrathea and will spend the next six months testing its technology, which removes magnesium from saltwater and uses electricity to convert it into metal as part of a process that is expected to be cleaner than the traditional magnesium refining process. “This is new technology,” said Brady Murphy, Tetra’s CEO. “The scientists are very confident that it works, but we need to demonstrate that it scales at a commercial level.” In September, Tetra released a study showing the Smackover had a magnesium resource of roughly 2 million metric tons. Should a JV ultimately be signed, Magrathea is expected to control 51%, with Tetra holding 49%, the companies said. Murphy said the Pentagon’s $28 million grant issued to Magrathea last year was a vote of confidence in the sustainability of the startup’s technology. San Francisco-based Magrathea, named for a fictional planet in the book “The Hitchhiker’s Guide to the Galaxy,” said it picked Arkansas to first demonstrate its technology given the state’s interest in critical minerals production. “More than anything, it’s building in a place where people want to actually build stuff,” said Magrathea CEO Alex Grant.