China Direct Industries Begins Process to Restart Production at Two Magnesium Facilities

2010-05-11

China Direct Industries, a U.S. owned holding company operating in China in two core business segments, pure magnesium production and distribution of basic materials, announced today that it has begun the process to restart production of magnesium ingots at two facilities, Baotou Changxin Magnesium and Chang Magnesium. Management expects production to commence at the facilities beginning in July and August of 2010.   

As production at our Golden Magnesium facility nears its full capacity of 12,000 metric tons annually, management has decided to restart production at Baotou Changxin Magnesium and Chang Magnesium which had been idled due to weak demand for magnesium throughout the course of 2009. Management believes magnesium markets are beginning to firm and anticipates rising demand in the coming quarters. These facilities are expected to add 30,000 metric tons of manufacturing capacity annually once they become operational in late July or early August, 2010.

Commenting on the event, Dr. James Wang, Chairman and CEO of China Direct Industries, Inc. stated, “We remain extremely confident about the long term prospects for our magnesium operations as we move through 2010. We have seen a marked pickup in quoting activity for larger quantity orders in recent months and are confident that the gradual improving trends in price and demand we see in the market will continue to gain momentum throughout the remainder of 2010 and into 2011.”