2012 June – A new Joint Venture in China strengthens Magontec’s market position

At the end of May 2012 Magontec Limited launched a joint venture together with the Chinese corporation Dongfang Resources concerning the production of magnesium alloys. The capacity of the new project is 30,000 mt. p.a. The company is located in Shanxi Province.

Magontec will hold a 70% stake of the jointly owned company. Magontec will contribute logistics, distribution, marketing, and production expertise and will assume full management control of alloy production. Magontec will invest RMB 7 million (A$ 1.1 million) of working capital.

The product spectrum comprises a wide range of generic alloys as well as high technology alloys. They will be exclusively marketed by Magontec. “The terms of the agreement enable us to sharply compete using competition- and future-oriented pricing” says Nicholas Andrews, Executive Chairman of Magontec Ltd. “Both, our national and international customers will benefit from that.”

While the new plant has already been certified by a number of customers in China, Europe and North America, production will ramp up in the coming months as other customers complete qualification procedures. An advantage of the new arrangement is that joint venture partner Dongfang Resources operates a pure magnesium production plant adjacent to the new plant. The pure magnesium plant with a capacity of 20,000 mt p.a. effectively uses off-gas from a Dongfang coking coal production plant.

Photo:
Signature of the contract by end of May 2012, center: Mr. Nícholas Andrews, Executive Chairman of Magontec Limited.

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