The challenge

Market Options Analysis

Client was looking to investigate pursuing a circular economy initiative to recover magnesium hydroxide from desalination brine at a Seawater Desalination Plant, in line with their sustainability goals. The project aimed to stimulate local economic activity in the region by supplying raw material for magnesium metal production. Rennie was engaged to conduct a customer and market analysis for their proposed magnesium extraction plant. Additionally, a preliminary commercial feasibility statement and high-level business case was produced to inform the Go or No Go Decision. 

Our solution

Supporting a Go or No Go Decision

Rennie was involved in two stages, with Phase 0 activities looking to inform the more detailed investigation to be completed in Phase 1, including technical analysis. Phase 0 activities included setting up a detailed project plan, governance structure and key stakeholders and engagement plan; undertaking market & customer analysis; conducting a preliminary commercial feasibility study and preparation of preliminary feasibility statement & supporting information for Board / Management. Rennie conducted a detailed analysis of the magnesium market, customers, price, product, technology, capability, support, client positioning and competitors. A detailed issues tree was developed in order to ensure a comprehensive assessment of the magnesium hydroxide market entry strategy for the client. 

Building on the prior phase, Phase 1 activities included detailed participation options analysis and the development of a preliminary business case (incl. recommended solution and its financial implications; benefits to Government; key risks to delivery; and readiness to progress to the next stage of delivery). Rennie performed participation model analysis, multi-criteria analysis, detailed financial modelling and commercial support for a proposed magnesium extraction plant. Rennie worked collaboratively with the client’s  growth team to determine the commercial feasibility of the proposed project through qualitative and quantitative analysis of the identified participation models through a series of workshops. Rennie worked collaboratively to co-design a robust, best practice financial model to the clients’ requirements to assess the magnesium participation options’ financial viability, with input from technical advisors. The outputs of the model were utilised as an input into the multi-criteria analysis performed.

Our impact

Balanced evaluation aligned with government’s intended outcomes

Phase 0 and 1 produced a comprehensive customer and market analysis of the opportunity presented to the client. The detailed DCF financial model development allowed for a quantitative assessment of the opportunity, including model capability for scenario selection and sensitivity to measure the magnesium hydroxide opportunity against a range of participation models and incorporation of the technical advisor’s cost estimates. The multi-criteria assessment tool enabled weighting of criteria to be adjusted (incl. board/other preferences) to determine the preferred participation model. The criteria, weighting and scoring of each of the participation options were workshopped and socialised with a range of key stakeholders. This framework allowed a balanced assessment of the qualitative and quantitative risks and opportunities of the different participation options to highlight a preferred option.

Key insights

• Stakeholder mapping and project management
• Preliminary commercial feasibility statement for evaluation
• Participation model and commercial archetype development
• Multi-criteria analysis
• Commercial support (incl. detailed pricing and levelised cost analysis)
• Detailed financial modelling to assess financial feasibility
• Succinct presentation materials for regular reporting to the Board / Steering Committee