ASX symbol CMC

China Magnesium Corporation Limited

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Company information

FMW

In February 2015, CMC executed and commenced a Co-operation Agreement with Pingyao County Fengyan Mineral Wool Co. Ltd. (FMW) under which CMC has a 60% economic interest in the business of FMW; controls a majority of the FMW board seats; and is responsible for the management of FMW’s business, including any improvements to it.

FMW can produce up to 150,000 tonnes per annum of ferronickel; and uses the waste slag from the ferronickel production to produce mineral (rock) wool & mineral wool acoustic board products, and other industrial products.

FMW currently purchases all of CMC’s semi-coke to use in its ferronickel production.

FMW’s ferronickel plant is also the connection point for the supply of electricity from the Fengyan internal electricity grid to CMC’s Pingyao operations. Any external ferronickel requirements in respect of CMC’s recycling and production of retorts (used for CMC’s magnesium production) are also currently supplied to CMC by FMW.

The production line lends itself to re-configuration where market momentum changes, and has recently converted its production line from ferronickel to pig iron. Although it will mean an end to FMW supplying ferronickel as required for the recycling of retorts, the slag produced from pig iron production can still be used to produce mineral (rock) wool.