CMC owns a 91.25% interest in CMC China which owns a 100% interest in a magnesium ingot production operation in the Shanxi province of north eastern China. The operations are licensed to expand output to 105,000tpa, which would make it one of the world’s largest magnesium producers. Studies have been completed which indicate a positive environment for CMC to conduct a major expansion of its magnesium operations.
CMC has converted its existing coal to gas plants to 5 semi-coke crackers (total semi-coke capacity 200,000 tpa) at the site of its existing 20,000 tpa capacity magnesium plant. Waste gas from semi-coke production is now used to provide the energy source required to produce magnesium. Consequently the the combined semi-coke and magnesium plants are expected to significantly lower production costs than for magnesium-only production using the coal-to-gas facilities as originally envisaged when the magnesium plant was built.
Another by-product of semi coke production is tar-oil, which is typically produced at the rate of 1 tonne (~7.14 barrels) of tar oil for every 10 tonnes of semi coke produced. CMC has secured purchasers for all of the tar oil produced at market rates via an offtake agreement. The tar oil can be refined into diesel fuel at a cost which is a fraction of the market price and with a relatively small footprint area.