Aug 30 2008
Aricom is pleased to announce that further to the Memorandum of Understanding announced in January 2008, it has signed and received relevant formal approvals for the joint venture contract with Aluminium Corporation of China ("Chinalco") to construct a titanium sponge plant in North East China.
Aricom and Chinalco will establish the plant in Jiamusi City, Heilongjiang province, China, with an initial production capacity of 15,000 tonnes p.a. of titanium sponge.
It has been agreed that ilmenite feedstock for the plant is to be sourced exclusively from Aricom's Kuranakh mine, and that Chinalco will off-take the titanium sponge to be produced by the joint venture. The parties have agreed that the joint venture company will be owned as to 65% by Aricom and as to 35% by Chinalco with the parties contributing RMB474.5m (c.US$69m) and RMB255.5m (c.US$37m) respectively. Aricom will fund its contribution from existing funds.
Signed on 12 August 2008, the joint venture contract was approved by the Chinese Ministry of Commerce (MOFCOM) on 26 August 2008 and is expected to be registered in September. A formal launch ceremony is planned in Jiamusi on 10 September 2008 after which the full construction programme will commence. Commissioning of the plant is expected during 2010.
Commenting on the joint venture, Jay Hambro, Chief Executive, said:
"With the signing and approval process of this project now complete, Aricom looks forward to the commencement of construction and the consequent contribution to the Group's revenue. Aricom is delighted to have Chinalco as a joint venture partner."
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