BRISBANE, Australia The outlook for magnesium in Australia is no better than it is in Canada. Noranda shut down its Magnola refinery in Quebec last year. Now AUSTRALIAN MAGNESIUM CORP. (AMC) is being forced to restructure. The problems come as the Stanwell magnesium project was being readied for production in December 2004. NEWMONT MINING owns and will retain 27.8% of AMC, but it will take a non-cash write-down this quarter. Newmont's investment in AMC was US$95.8 million as of the end of the previous quarter.
In addition, Newmont assumed certain guarantees and commitments at the time it acquired Normandy Mining in February 2002. As a result of AMC's restructuring, the existing A$75-million contingent facility provided by Newmont will be cancelled, in return for a new A$10-million contingent credit facility to be provided by Newmont. Newmont will also be reviewing the need to take additional charges in connection with a guarantee relating to a magnesium sale agreement and a guarantee pertaining to an AMC subsidiary.
A large gallery of photos from construction of the Stanwell project is available at the AMC web site, www.austmg.com.