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ian davies
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Subject: Invester in refining
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I am thinking of investing in Quay magnesium (Quay magnesium.com) it is an Australian company with a salt refining furnace (electowinning I imagine) in China converiting Mg into alloy
My question is the CEO of the company tells me the production costs are only 10 cents a pound I find this to be suspect I would think closer to 50 cents a pound. I have part of his letter copied below I would appreciate comments on it.
Qote from CEO
" Power is approximately 25 % of our site costs. We budgeted a fullish number from the start and do not expect any final variations to be material. The Chinese are building a lot of new capacity (this should lower charges) which will come on stream in 2006.
* The 11 cents a pound quoted in the prospectus is a cash cost. It is still relevant. What has to be added to this is depreciation (non cash). We have not decided on a policy for this yet so I can't give you any guidance - I guess if you said the project has a "book life" of 10 years you could derive a figure of AUD 2.8 million per annum (28 million/ 10 years) as an approximation. If you go to www.magnesium.com you will see 99.8% magnesium sells for around 78 cents per pound. High grade alloy sells for EURO 2.75 per kilo (the last time I looked) - check the Hydro website."
I find this about 40 cents minimum less than a pidgeon plant where energy use would be directly converted to heat from coal although a higher labor cost would be involved.
Appreciate comments
Kind regards
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| 20-Feb-2005 02:09 |
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Martin Stone
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Quay is building up a homemade rectangular salt furnace with unknown result. Only one furnace of 15000 tpy lacks of flexibility to produce various families of alloy. The production cost should not be lower than 12 cents a pound in Nanjing.
Hydro Xian is selling nowadays USD 2,100 - 2,200/ton, the highest from the roundup. The so-called high grade alloys are recognized from Hydro Canada and Dead Sea so far, hopefully Quay would catch up if the plant could run as planned.
Pidgeon is energy hungry from briquetting and thermal reduction of 12 hours a cycle at 1200C, extraction of one kilo of Mg cost around 30 cents for coal gas in Shanxi.
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| 20-Apr-2005 20:57 |
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Werner Jaschinsky
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>I am thinking of investing in Quay magnesium (Quay
>magnesium.com) it is an Australian company with a salt
>refining furnace (electowinning I imagine) in China
>converiting Mg into alloy
>
>My question is the CEO of the company tells me the
>production costs are only 10 cents a pound I find this to
>be suspect I would think closer to 50 cents a pound. I
>have part of his letter copied below I would appreciate comments on it.
>
>
>Qote from CEO
>
>" Power is approximately 25 % of our site costs. We
>budgeted a fullish number from the start and do not
>expect any final variations to be material. The Chinese
>are building a lot of new capacity (this should lower
>charges) which will come on stream in 2006.
>* The 11 cents a pound quoted in the prospectus is a
>cash cost. It is still relevant. What has to be added to
>this is depreciation (non cash). We have not decided on a
>policy for this yet so I can't give you any guidance - I
>guess if you said the project has a "book life"
>of 10 years you could derive a figure of AUD 2.8 million
>per annum (28 million/ 10 years) as an approximation. If
>you go to www.magnesium.com you will see 99.8% magnesium
>sells for around 78 cents per pound. High grade alloy
>sells for EURO 2.75 per kilo (the last time I looked) -
>check the Hydro website."
>
>I find this about 40 cents minimum less than a pidgeon
>plant where energy use would be directly converted to
>heat from coal although a higher labor cost would be involved.
>
>Appreciate comments
>Kind regards
Think about investing twice, if you like - talk to me about investment oppurtunities in Magnesium refining as well
+43 699 12669001
Kind Regards
Werner
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| 27-Apr-2005 21:05 |
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Nigel Ricketts
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Ian,
Quay Magnesium is planning to process Chinese pure magnesium made from the Pidgeon process into alloys. The large furnaces are settling furnaces as used by Norsk Hydro. The people designing the furnaces for Quay Magnesium have links via prior employment to Norsk Hydro. AMC planned to use similar furnaces.
It is only a matter of time before the larger Chinese producers can make the alloys for themselves with acceptable quality. I find it hard to understand what Quay Magnesium can do that others in China not.
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| 20-May-2005 08:59 |
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ian davies
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Werner, Martin and Nigel
thank you for your responses I will see how Quays marketing goes
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| 30-Jul-2005 11:43 |
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David Sun
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>Quay is building up a homemade rectangular salt furnace
>with unknown result. Only one furnace of 15000 tpy lacks
>of flexibility to produce various families of alloy. The
>production cost should not be lower than 12 cents a pound
>in Nanjing.
>
>Hydro Xian is selling nowadays USD 2,100 - 2,200/ton, the
>highest from the roundup. The so-called high grade alloys
>are recognized from Hydro Canada and Dead Sea so far,
>hopefully Quay would catch up if the plant could run as planned.
>
>Pidgeon is energy hungry from briquetting and thermal
>reduction of 12 hours a cycle at 1200C, extraction of one
>kilo of Mg cost around 30 cents for coal gas in Shanxi.
Thermal reduction cycle in our plants varies from 9-10 hrs at 1200C. None of the 3 plants exceeds 10 hrs.
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| 18-Aug-2005 11:30 |
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rick fine
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Ian,
Would you be interested in investing in a secondary mag plant?
Rick Fine
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| 28-Jul-2010 17:05 |
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