Japan Light Metal Makers to Launch Magnesium Ingot JV in China

Kobe Steel, Furukawa-Sky Aluminum, Sumitomo Light Metal Industries and ALCONIX Corporation announced on Thursday they established magnesium ingot making joint venture in Taiyuan, Shanxi of China with Taiyuan Yiwei Magnesium Industry of China. Japanese firms try to secure the stable supply source through the joint venture when magnesium ingot price exceeds US$ 3,000 per tonne. Taiyuan Yiwei Magnesium controls 51% of the joint venture with 14.7% share by Kobe Steel and Furukawa-Sky Aluminum each and 9.8% by Sumitomo Light Metal and ALCONIX each. They signed joint venture agreement on October 18 and got joint venture approval from Chinese authority on November 7. Japanese firms have right to purchase the ingot along with the equity share totaling 2,940 tonnes of annual 6,000 tonnes of output. The joint venture with 19.5 million yuan of capital invests 600 million yen to build plant starting operation in first half of 2008. China represents 80% of annual 600,000 tonnes of world output. Japanese buyers including light metal makers depend heavily on Chinese suppliers. Japanese buyers try to secure the materials under tight supply and surging price. The 3 light metal makers try to secure more than 10% of the requirement through the joint venture.