Japanese aluminium giants seeking magnesium in China

Three Japanese aluminium giants announced on November 22, 2007, that they would team up to invest in a Chinese joint venture Shanxi Jinwei Magnesium Co., Ltd.

The three investors are Kobe Steel Ltd. (Kobelco), Sumitomo Light Metal Industries Ltd., and Furukawa-Sky Aluminum Corporation. It is their first investment in overseas companies as they are seeking raw material magnesium in China for their aluminium alloy production.

Taiyuan Yiwei Magnesium Co., Ltd. contributes 51% of the CNY 19.5 million registered capital of the JV and the rest 49% will be provided by the three and Alconix Corporation, who is already a shareholder of the JV. Their shares are: Kobelco and Furukawa-Sky, respectively 14.7%, and Sumitomo and Alconix, respectively 9.8%.

The JV will pour JPY 600 million (USD 1= JPY 109) in building a plant in China, which is planned to be put into production in March 2008. The plant will produce 6,000 tons of magnesium metal every year by then, including 2,940 tons to be exported to Japan.

China produces 80% of the magnesium in the world each year, according to data.