Jul 17 2003
Following the announcement by Australian Magnesium Corp (AMC), that they would be mothballing their Stanwell Magnesium Project after construction costs exceeded estimates by 65%, they have terminated their US$1.3 billion deal to supply Ford with magnesium for the next 10 years. The plant was to be the largest magnesium plant in the world and the deal with Ford, would have seen them take almost half its proposed 90,000 tonnes per year output under the agreement.
AMC will refund a US$30 million deposit paid by Ford to AMC in 1997-98 as part of the contract termination agreement. Newmont Mining, a 28% shareholder in the Stanwell Magnesium Project will pay Ford a further US$10 million on behalf of the project to exit their supply obligations to Ford and complete the termination. However, the two companies have agreed to work together in the future.
SAMAG, the magnesium project from South Australia, run by Magnesium International are said to be pursuing Ford, with an eye to supplying magnesium that they would have otherwise sourced from AMC.
Meanwhile, Latrobe Magnesium, another Australian magnesium project is offering 10 million shares at 5 cents each on the Australian Stock Exchange. The funds will be used to fund a feasibility study pertaining to a proposed $984 million, 100,000 tonnes per year project for the Latrobe Valley in Victoria, Australia. Uptake is currently slow, after investors shy away from magnesium projects after the AMC disaster.
It should be said that, the technologies for all three plants are different, while the Latrobe Project also uses waste products from power stations, so they don’t have mining or transportation costs, and use feedstocks that the power stations need to get rid of.
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