HOT PROSPECTS FOR CHINA MAGNESIUM

Written on the 11 April 2011

HOT PROSPECTS FOR CHINA MAGNESIUM

CHINA Magnesium Corporation (CMC) has received approval for a 50-year lease for 6ha of industrial land in Pingyao County in the Shanxi Province.

It will be used to accommodate the expansion of the Pingyao Magnesium Plant. Phase one of the Shanxi province plant is spread across 180,000sqm with the capacity to produce 20,000 tonnes of magnesium by next February.

CMC raised $12 million after completing an IPO and since upgraded its joint venture in subsidiary Shanxi Luyuan Magnesium Company to fund an upgrade and expansion of an existing magnesium ingot plant.

The capital injection has increased CMC’s stake in the venture from 30.6 per cent to 90 per cent. With cash flows of $10.7 million, the company will seek to further upgrade infrastructure in China.

In March, 1.27 million shares were released from ASX escrow. There are 127.6 million shares on issue with 65,380 remaining in escrow.

CMC aims to be one of the largest producers in the world of pure magnesium and magnesium alloy, supplying domestic Chinese and international customers. Core demand is expected to come from the burgeoning electric car market.

Chief executive Tom Blackhurst (pictured) has been in China pushing ahead with capital works.

Blackhurst says the long-term goal is to expand magnesium production to 105,000tpa over three major phases by 2013.

“We have already received a non-binding letter of intent from the China Construction Bank, one of the world’s largest banks, to debt fund US$14.6 million of the total expansion capital expenditure to 105,000tpa,” he says.

Non-executive chairman Bill Bass says the group is backed by the Chinese Government and guided by a management team with significant experience.

“CMC operates in a country that is actively encouraging resources industry and investment – so the project is not exposed to the current uncertainty created by Australia’s proposed resource super profits tax, and the expansion project has been classified by the local provincial government as a ‘preferred project’,” he says.

The Gold Coast’s newest ASX recruit posted half year net profit of $576,000 after floating in November 2010.


Latest News

BRAMBLES TUMBLES AFTER REDUCING GUIDANCE

BRAMBLES (ASX: BXB) will miss its first-half guidance due to cost pressures at its North America business.

The com...

VILLAGE ROADSHOW PARKS HURT BY DREAMWORLD TRAGEDY

QUEENSLAND visitors to Village Roadshow (ASX: VRL) theme parks have declined 12 per cent in the wake of four deaths a...

ASF UNVEILS TRAFFIC PLANS FOR THE SPIT

A SECOND bridge over the Nerang River is the centrepiece of the ASF Consortium's plan to improve traffic flow ...

BHP AND VALE EDGE CLOSER TO $47.5 BILLION SAMARCO DAM DISASTER SETTLEMENT

BHP Billiton (ASX: BHP) and Brazilian mining company Vale have entered into a preliminary agreement with Brazilian fe...

Related News

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

BUSINESS CONFIDENCE AT A SIX-YEAR HIGH

SMALL and medium businesses have entered 2017 with their confidence at a six-year high, building on strong gains m...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter