Hard blow for the municipality of Val-des-Sources in Estrie: the company Tergeo, formerly known as Alliance Magnésium, is protecting itself from its creditors.
The news was confirmed via press release early Thursday. The Company reserves the right to comment.
The Estrie-based company thought big. By 2026, the company wanted to build an industrial complex to convert the Jeffrey mine tailings into magnesium. However, Tergeo Minerals Critique and the three Alliance Magnésium companies owe their creditors nearly $170 million, according to documents filed under the Bankruptcy and Bankruptcy Code. The factory’s operations were temporarily suspended on August 19. Several dozen employees were laid off.
Investissement Québec is one of the secured creditors, having injected almost $40 million. However, on August 31, Hydro-Québec and the Ministry of Economy, Innovation and Energy rejected Tergeo’s request for electricity, which Tergeo relied on for its negotiations, according to documents filed with the Supreme Court.
“We should rather see this as a result of the company’s financial restructuring problems. Minister Fitzgibbon often says that we have dozens of projects requiring megawatts of electricity. You couldn’t freeze an energy block. The company was unable to achieve a real recovery in the short and medium term. That doesn’t mean there won’t be power when there’s a recovery,” said Rep. Andre Bachand of Richmond.
Magnola in 2003, Norsk-Hydro in 2007: Magnesium has led to the loss of several companies in the past. So why put more money into this industry?
“Because the magnesium sector is a sector with a future,” affirmed Mr. Bachand, who recalled that the problems at Norsk-Hydro were very different than today. We need magnesium to reduce our greenhouse gas emissions. By using magnesium with other metals, we reduce the weight of vehicles and thus save greenhouse gases.”
Regarding the Tergeo file, the government is giving itself a few days to examine its options for intervention. The Member for Richmond concluded by recalling that partners with significant liquidity are needed to drive the magnesium sector forward.