BOCA RATON, Fla. - China Direct, Inc. signed an agreement to acquire 52 percent of Shanxi Jinwei Magnesium Co, Ltd.
Under the agreement, CDI China, Inc, a wholly owned subsidiary of China Direct, will acquire the ownership interest in consideration for an investment of working capital.
The remaining 48 percent will be owned by Taiyuan Yiwei Magnesium Co, Ltd, and Shanxi Senrun Coal Chemistry Co, Ltd. The two Chinese entities will contribute facilities currently under construction and energy resources for production.
Jinwei will produce 20,000 tons of magnesium per year, with the first phase of production expected to come online in the fourth quarter of 2007.
The first phase of the project will have an annual production capacity of 12,000 tons of magnesium.
The second phase, scheduled for 2008, will have an additional 8,000 tons of magnesium annually.
“Magnesium prices were up about 20 to 30 percent in the second quarter of 2007 and we believe this trend will continue as supply is removed from the marketplace faster than new government approved facilities can replace that supply,” commented Dr. James Wang, CEO of China Direct.