Australian-based Chinese Magnesium Corporation to Produce Magnesium in China

2010-06-08

The Southport company, headed by local businessman Tom Blackhurst, will sell the magnesium back to China.

China Magnesium Corporation Limited has recently announced it will be selling magnesium to China. The company needs to raise between $4 million and $8 million before its July 13 listing.

Shares will begin trading at 25c, with 32 million available from the 112 million issued. Mr Blackhurst said the company had had interest from London, Hong Kong and Singapore.

CMC was founded three years ago after Mr Blackhu rst travelled by car through China looking for opportunities.

CMC, in which the Chinese partner has a 20% stake, will produce magnesium at a plant in Pingyao in the Shanxi Province.

"Once we signed that joint venture, we finalised applications (to build the world's largest magnesium plant at 105,000 tonnes per annum) and we were awarded those permits in November 2007," said Mr Blackhurst.

"It has taken us nearly two-and-a-half years to be shovel ready. We have had all the legal due diligence completed."

The company, which plans to produce 105,000 tonnes over the next three years, also has a call option on a nearby dolomite quarry, owned by a relative of the company's joint-venture partner.

Mr Blackhurst said the process for mining magnesium in China was complicated and went through several steps before it was sold.

"We get the pure magnesium; we melt it once; we alloy it straight into the die-caster. So we cut out a whole process," he said.

He also said a large Chinese car manufacturer had announced it was building a 300,000-car plant nearby and the die-casting plant was being built in Pingyao. Production is expected to start in February.