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Magontec has concluded three Agreements that provide the economic and operating basis for its future endeavours at Golmud in Qinghai Province, China. The signing ceremony took place on 28 May 2014. These Agreements are the basis upon which Magontec will invest US$ 11m in the Magnesium Alloy Cast House equipment adjacent to the Qinghai electrolytic magnesium smelter.

The Agreements provide:

Exclusive rights to manufacture magnesium alloy from liquid pure magnesium produced at this facility with these rights having a 10-year duration.

A guaranteed supply of liquid pure magnesium under a pricing formula that would generate a strong profit under current magnesium pricing conditions.

A detailed road map for future cooperation for Magontec and its partner, Qinghai Salt Lake Magnesium Co. Ltd. (QSLM).

The QSLM smelter, when completed, will be the largest electrolytic magnesium facility ever constructed. It will use renewable energy for over 75% of its total requirements.

Nic Andrews, Executive Chairman of Magontec Limited said "This new project in Qinghai is the largest and most important investment by Magontec for many years. It will re-establish Magontec as a leading magnesium alloy manufacturer and recycler and is expected to deliver a significant boost to group profitability when fully operational. These Agreements represent the foundations on which both Magontec and QSLM will work together and build future prosperity for shareholders of both companies".

The magnesium project in Qinghai is currently under construction and the Magnesium Alloy Cast House is expected to be completed and ready for the installation of Magontec's plant and equipment in the fourth quarter of 2014.

Photography: Signing Ceremony, 28 May 2014 at Golmud in Qinghai Province (China)
Front row from left: Mr. Tong Xunyou, President Magontec Asia, Mr. Xie Kangmin, Chairman Qinghai Salt Lake Magnesium Co Ltd., Vice President Qinghai Salt Lake Industry Co Ltd., Mr. Nicholas Andrews, Executive Chairman Magontec Limited, Mr. Wu Wenhao, Vice President Qinghai Salt Lake Industries Co Ltd.

Back row from left: Mr. Zhu Shiyun, Director of International Cooperation Department of Qinghai Salt Lake Industry Co. Ltd, Mr. John Talbot, Company Secretary and CFO Magontec, Mr. Christoph Klein-Schmeink, President Magontec Europe & Americas, Mr. Li Zhongjun, Non-Executive Director Magontec, Mr. Robert Shaw, Non-Executive Director Magontec, Mr. Robert Kaye SC, Non-Executive Director Magontec, Mr. Andre Labuschagne, Non-Executive Director Magontec.

• [Editor:Phillip.Feng]