China Magnesium Corporation Limited Announce An Initial Public Offering

2010-07-01

China Magnesium Corporation Limited is raising up to A$8 million pursuant to an IPO to be followed by an ASX listing. It has (through a JV company, in which it is earning a minimum 75% interest) a pure magnesium plant in China - using the simple, cheap and proven pidgeon process - which has a rare permit in place to substantially expand production to 105,000tpa (which would make it one of the world's largest producers), an option to acquire the supplying dolomite (magnesium ore) mine and will have the new capability to produce higher value magnesium alloys (used for making lighter motor vehicles and mobile devices) at effectively the same cost as producing the pure magnesium. 

Initial plans are to undertake an upgrade and expansion to 20,000tpa alloying capacity (then further expansions in 5ktpa modules to 105ktpa by 2013) and the JV company is anticipating robust operating margins of >US$700/t alloy produced. It has substantial growth potential and the key Chinese parties (including the minority JV partner) also have a significant shareholding in CMC.