CHINA MAGNESIUM MAKES BARGAIN FERROSILICON BUY

Written on the 21 March 2012

CHINA MAGNESIUM MAKES BARGAIN FERROSILICON BUY

BOUNDING in to the Gold Coast’s Top 10 ASX list for the first time, China Magnesium is one of the few Australian mining companies producing in China.

The company has signalled its intentions in Asia with a $6 million acquisition this month of a ferrosilicon plant in the north eastern Chinese province of Ningxai, about 650kms from its magnesium ingot production operation in the Shanxi province.

Headquartered at Marine Parade Southport, the company’s net profit for the half to December 11 was up 96 per cent to $1.1 million, while revenues increased by 252 per cent to 1.18 million on the same period in FY10.

“I love a bargain,” says managing director Tom Blackhurst (pictured), of the latest acquisition.

“You need to be very patient in China, you can’t make a deal straight away. There is no such thing as making an acquaintance after having met a bloke twice.”

The patience is paying off. CMC raised $4.5 million at 30c per share to fund the buy and a further $5 million is in the bank for future acquisitions after releasing 14 million shares at 35c – a 30 per cent premium to the price prior to the announcement.

The company has a 90.7 per cent interest in CMC China, which owns a magnesium ingot production operation in Shanxi province. The company has key permits in place to expand production to 105,000 tonnes per annum and intends to do so in three phases by December 2013. If successful it will become one of the world’s largest magnesium producers.

Blackhurst says CMC has no debt, but with a slowdown in the China economy, his operations will also ease.

“The Australian Government is happy to spend billions in Australia to build port facilities just to sell stuff to China, but we’re on the ground in China and our business grows as the economy grows. Our boat rises on their tide,” he says.

Magnesium is the lightest of all the structural metals and its main advantage is its weight-to-strength ratio, considerably higher than that of competing structural metals. It is the eighth most abundant element in the earth’s crust.

Its largest market is for use in the production of die-cast parts for the automobile industry. It’s also used to make beverage cans.

----------

TOP COMPANY
9.
China Magnesium Corporation (CMC)
MD: Tom Blackhurst
Market Cap: $21m
Revenue ’11: $1.18m
Staff: 450
Established: 2010

Read more about the city’s top companies in the annual Gold Coast Business News top companies edition out now.

Comment on our Twitter page using the @GCBN tag.


Latest News

BABY STEPS FOR BELLAMY'S IN TURNAROUND

GREEN shoots are appearing in the Bellamy's Organic (ASX: BAL) business in the early days of its turnaround.

T...

LOSSES MOUNT AT SLATER AND GORDON

SLATER and Gordon's losses continue to mount following its disastrous entry in to the UK market. The compa...

NVC PLAYS A DIFFERENT GAME, AND WINS

AS its profits rise, National Veterinary Care's (ASX: NVL) focus on training over retail is proving to be a wi...

SUPERLOOP $2M LOSS DOES LITTLE TO KILL SLATTERY'S CONFIDENCE

BEVAN Slattery (pictured) is optimistic that Superloop's (ASX: SLC) financial position is promising, despite t...

Related News

HOW TO TAKE CONTROL OF YOUR CAREER THROUGH TRAINING

GIG economy, remote working, and freelance Friday are more than just buzz terms; our workforce is changing, and so...

EVERYTHING YOU NEED TO KNOW ABOUT THE NATIONAL BROADBAND NETWORK

THE National Broadband Network (NBN) is more than an internet connection, it is an opportunity to transform your b...

WHY EMPLOYEE-OWNED COMPANIES ARE BEATING ASX200 SHARE PRICES

EMPLOYEE-owned companies command a higher share price than their publicly listed peers, reaping a 17 per cent prem...

RISE OF THE MACHINES HAS WORKERS SWEATING

UP TO 3.8 million Australian workers are fearful their job may soon be terminated by a robot, a new survey has shown....

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter