What is a magnesium metal project report?
A magnesium metal project report is a detailed project report (DPR) for a plant that reduces calcined dolomite with ferrosilicon under vacuum and casts the metal into ingots. It sets out the process route, raw materials, machinery, market, project cost, means of finance, five-year projections, DSCR and break-even that a lender or investor reviews before funding the plant.
Promoters use it to size a plant and raise a term loan or equity, and lenders and investors use it to judge whether the plant can sell ingot at a competitive landed cost.
Also known as: magnesium ingot plant project report, magnesium metal business plan, Pidgeon process plant DPR, magnesium extraction from dolomite project report.
Magnesium metal manufacturing plant cost in India
The sample report models a 1.7 MT per day plant, or 561 MT per year over 330 working days. It starts at 60% capacity and reaches 80% in Year 5, selling ingot at ₹2,50,000 per MT before GST.
Plant and machinery is half the project cost, and the vacuum reduction furnaces are the biggest machinery item. Buildings are the next largest line, because kilns, furnaces and the gas plant need heavy sheds and foundations.
| Land and site development | 42.60 |
|---|---|
| Building and civil works | 167.78 |
| Plant and machinery | 328.73 |
| Other fixed assets | 45.36 |
| Contingencies | 24.83 |
| Preliminary and pre-operative | 15.23 |
| Working capital margin | 34.10 |
| Total | 658.63 |
| Promoter's contribution (25%) | 164.66 |
|---|---|
| Term loan from bank (75%) | 493.97 |
| Cash credit limit (separate) | 102.28 |
| Total project cost | 658.63 |
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments. Lowest DSCR in the sample is 1.27. All figures are illustrative.
Magnesium metal manufacturing process
The sample plant uses the Pidgeon process, a batch method in which silicon from ferrosilicon pulls oxygen away from magnesium oxide at high temperature and low pressure. Each retort runs a cycle of several hours, so output depends on how many retorts you run in parallel.
- Calcining the dolomite
Dolomite lumps are burnt in a rotary kiln at about 1,100–1,200 °C, which drives off carbon dioxide and leaves a reactive mix of magnesium and calcium oxides.
- Grinding and briquetting
The calcined dolomite is ground fine with ferrosilicon and a small dose of fluorspar, then pressed into dense briquettes so the reaction surfaces stay in close contact.
- Vacuum reduction
Briquettes are loaded into heat-resistant steel retorts set in a furnace, held at about 1,200 °C and pumped down to a high vacuum, so magnesium leaves as vapour.
- Condensing the crown
The vapour solidifies as a ring-shaped crown in the water-cooled end of each retort; the crown is pulled out and the spent residue is raked out for disposal or sale.
- Refining and casting
Crowns are remelted under a chloride flux that takes up oxides and other impurities, and the clean metal is cast into ingots in a casting machine.
- Surface treatment and packing
Ingots are cleaned, given a protective surface finish against corrosion, weighed by heat number and strapped on pallets for dispatch.
Pidgeon process or electrolysis: which route suits a new plant?
Magnesium is made by two main routes. The silicothermic Pidgeon process reduces calcined dolomite with ferrosilicon, while the electrolytic route splits molten magnesium chloride, made from brines or seawater, into magnesium and chlorine.
The Pidgeon route needs less capital per tonne, starts at small scale and can grow by adding furnaces. Its weak points are high fuel use, short retort life and several tonnes of calcium silicate residue for every tonne of metal.
Electrolysis needs a steady source of anhydrous magnesium chloride, very large and reliable power supply and chlorine handling. It suits large plants beside brine or salt works rather than a first unit near a dolomite mine.
What decides the route in India: dolomite is widely available, so most proposals use the Pidgeon process. The project report should then test cleaner fuel options, such as producer gas or natural gas, because fuel and emissions decide both cost and pollution consent.
Raw materials for magnesium metal production
Ferrosilicon of 75% silicon grade is the costliest input, and its price follows the ferro alloy market. Dolomite is cheap per tonne but bulky: an indicative 10–11 tonnes go into each tonne of metal, so a plant near the mine saves heavily on freight.
Low-silica, low-iron dolomite gives better recovery, so check the MgO content of each lot. Pure dolomite carries about 21.9% MgO.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Ferrosilicon, 75% grade | 55% | 300.24 |
| Coal for producer gas fuel | 22% | 120.10 |
| Dolomite lumps | 11% | 60.05 |
| Heat-resistant steel retorts | 5% | 27.29 |
| Fluorspar | 4% | 21.83 |
| Refining flux | 3% | 16.38 |
| Total | 100% | 545.89 |
In the sample, raw materials are 55.6% of sales. Coal for the gas plant is counted here, so the separate power and fuel line is only 6.7% of sales.
Machinery for a magnesium metal plant
Reduction furnaces with their retorts take ₹115.05 lakh, about 35% of machinery cost in the sample. Retorts are replaced as they creep and scale, so budget for them as a running cost as well.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Rotary kiln | Calcines dolomite | 65.75 |
| Ball mill and briquetting press | Grinds and presses the charge | 32.87 |
| Vacuum reduction furnaces with retorts | Reduce MgO to magnesium vapour | 115.05 |
| Vacuum pump system | Holds the retorts under vacuum | 26.30 |
| Producer gas plant | Makes fuel gas from coal | 32.87 |
| Refining furnace and ingot caster | Cleans the metal and casts ingots | 29.59 |
| Dust collection and gas cleaning | Controls kiln and furnace emissions | 16.44 |
| Electrical and instrumentation | Temperature and vacuum control | 9.86 |
| Total plant and machinery | 328.73 | |
Costs are the sample report's estimates for a 1.7 MT per day plant. Get current quotations before you finalise.
Licences, approvals and standards for a magnesium plant
A magnesium plant burns fuel at high temperature and handles a reactive metal, so expect closer scrutiny than a typical metal products unit. Confirm each item with the state authorities for your site.
| Business registration | Udyam (MSME) registration where the investment fits, and GST registration |
|---|---|
| Pollution board consent | Consent to establish and operate from the State Pollution Control Board. Some states list metal extraction as red category; Odisha's red list, for example, includes ferrous and non-ferrous metal extraction |
| Factory licence | Licence under the Factories Act, with safety measures for furnaces, molten metal and the producer gas unit |
| Fire safety | Fire NOC from the state fire service; magnesium fines and turnings burn fiercely and must not be fought with water |
| Product standard | IS 6694:1999, the BIS specification for magnesium ingots, as the quality reference for grades and chemistry |
| Power | Industrial power connection sanctioned for the kiln drives, vacuum pumps and casting line |
Market for magnesium metal in India
Indian demand comes from aluminium alloy makers, steel plants that desulphurise hot metal, ductile iron foundries and a small die casting industry. Pharma and chemical makers buy smaller lots of turnings and powder for Grignard reactions.
Supply is concentrated. The U.S. Geological Survey puts world primary output at about 1,100 thousand tonnes in 2025, of which China produced 950 thousand tonnes.
- Aluminium alloy, can stock and extrusion makers
- Steel plants for hot metal desulphurisation
- Ductile iron foundries and nodulariser makers
- Magnesium die casters for auto and electronic parts
- Pharmaceutical and fine chemical companies
- Metal traders and importers
Where a new plant wins: buyers now import almost all their ingot and hold stock against long shipping times. A domestic plant that offers steady grade, short delivery and pricing linked to the import parity can win regular contracts.
Mistakes that weaken a magnesium metal project report
- Pricing from a single import quote
Magnesium prices swing with Chinese supply. The report should build the selling price from landed cost and test a fall in price against DSCR.
- Assuming full recovery from dolomite
Not all the magnesium in the charge reaches the crown. Use a realistic recovery rate, or raw material use per tonne comes out too low.
- Treating retorts as a one-time asset
Retorts creep and oxidise at 1,200 °C and need regular replacement. Leaving them out of running cost overstates profit.
- No plan for the residue
Each tonne of metal leaves several tonnes of calcium silicate slag. Lenders and the pollution board want to see where it goes.
- Ignoring the ferrosilicon link
Ferrosilicon is the largest input cost. A report that does not test a rise in its price hides the main risk to margins.
How NPCS helps you plan a magnesium metal plant
- Route and capacityCompare Pidgeon furnace sizes, retort numbers and fuel options for your output target.
- Raw material planCheck dolomite quality, ferrosilicon sourcing and freight for your chosen site.
- Bank-ready project reportProjections, DSCR, sensitivity to ferrosilicon and ingot prices, and working capital in your lender's format.
- Approvals and layoutPlant layout, residue handling, power load and the approvals list for your state.
NPCS's client list includes 116 assignments for metal product units, and the NPCS project team, led by founder Ajay Kumar Gupta, has prepared project reports since 1994.
What's inside the magnesium metal sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
18 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
Real NPCS magnesium metal project reports
These are magnesium metal project reports NPCS has prepared, with the plant capacity, total capital investment, rate of return and break-even worked out in each. Costs have moved since some were written, so we bring any of them up to date for your capacity and location.
| Project report | Plant capacity | Total investment | Rate of return | Break-even | Action |
|---|---|---|---|---|---|
| Amino Acid Metal Chelates for Agriculture Use (Zinc, Ferrous, Copper, Manganese, Magnesium, Calcium) | On request | ₹5.02 crore | 41% | 47% | Get this report |
Figures as worked out in each NPCS report. Total investment includes plant and machinery, land and building, and working capital.
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Magnesium Metal project report: frequently asked questions
How much does it cost to set up a magnesium metal plant in India?
Our sample report models a 1.7 MT per day plant at ₹659 lakh, with ₹329 lakh of plant and machinery and ₹167.78 lakh of buildings and civil works. Larger Pidgeon plants of several thousand tonnes a year run into ₹100 crore or more (indicative). Your own figure depends on capacity, the number of reduction furnaces, land and whether you buy or make your fuel gas.
How is magnesium metal made from dolomite?
Most new plants use the Pidgeon process. Dolomite is calcined in a kiln, ground with ferrosilicon and a little fluorspar, pressed into briquettes and heated to about 1,200 °C in steel retorts under vacuum. Magnesium vapour condenses as a crown at the cooled end of each retort, and the crowns are refined under flux and cast into ingots.
What raw materials are needed to produce one tonne of magnesium?
As an indicative guide, a Pidgeon plant uses roughly 10–11 tonnes of dolomite and about 1 tonne of 75% ferrosilicon per tonne of magnesium. It also needs fluorspar, refining flux, fuel for calcination and reduction, and retorts that wear out. In our sample report ferrosilicon is 55% of raw material cost, the largest single input.
Is magnesium metal manufacturing profitable?
In our illustrative sample, the 1.7 MT per day plant earns a 14% return on investment in Year 3. It breaks even at about 44% of capacity and pays back in about 4.4 years. Real profit depends on the ferrosilicon price, fuel cost per tonne, retort life, recovery from dolomite and the landed price of imported ingot you compete with.
Is magnesium metal produced in India?
An International Magnesium Association presentation on India (2025) describes the country as having no domestic primary magnesium industry and depending on imports, about 85% of them from China. India has large dolomite resources, so a domestic plant would compete with imported ingot on landed cost, delivery time and supply security.
What does a project report on magnesium metal include?
It covers the process route and yields, raw materials, machinery with costs, utilities, manpower, approvals, the market and buyers. The financial part gives project cost, means of finance, five-year profit and loss, cash flow, balance sheet, DSCR and break-even. NPCS reports also add a sensitivity check on ferrosilicon and fuel prices, which move margins most in this product.
Is the sample report free and can I use it for a loan?
The sample is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report. Its figures are representative and not based on a real project, so it should not be submitted to a bank. For a loan, NPCS prepares a report for your own capacity, location and finance plan.
Sources and references
- Mineral Commodity Summaries 2026: Magnesium MetalU.S. Geological Survey, checked Oct 2026
- IS 6694:1999 Magnesium ingots, specification (second revision)Bureau of Indian Standards, checked Oct 2026
- Indian Minerals Yearbook 2022: DolomiteIndian Bureau of Mines, Ministry of Mines, checked Oct 2026
- Red category list of industriesState Pollution Control Board, Odisha, checked Oct 2026
- Status of magnesium in IndiaInternational Magnesium Association, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.