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Samag Limited Investigates A Magnesium Plant In NZ

SAMAG LIMITED INVESTIGATES A MAGNESIUM PLANT IN NEW ZEALAND

SAMAG Limited, a wholly owned subsidiary of the Australian Stock Exchange listed Pima Mining NL, announced today it is investigating plans to establish a magnesium metal production facility in New Zealand.

“We are still in the feasibility stages but the case for building such a facility in New Zealand is looking strong,” said Pima Mining Chairman, Pat Elliott.

“We should have completed our preliminary investigations and have a better idea of how we should proceed within the next few weeks,” he said.

SAMAG Limited has already invested over A$20 million in an engineering, feasibility and environmental impact study for a similar facility at Port Pirie in South Australia. Financial close on that plant is expected late in 2001.

“The type of investment we have made in Australia shows we understand the need to tick all the boxes – both financial and environmental – before proceeding with such a facility,” said Mr Elliott.

“We would, obviously, do the same in New Zealand.”

Mr Elliott said SAMAG had access to well proven, environmentally responsible magnesium production technology. Its source of magnesium is from a SAMAG-owned 579 million tonne magnesite feedstock deposit at Leigh Creek, South Australia.

“SAMAG Limited owns the exclusive world rights to the proven Dow magnesium process. The Dow process has accounted for cumulative production of around 5.6 million tonnes of magnesium, more than all other magnesium production processes combined,” he said.

SAMAG is looking to New Zealand for a second plant as it anticipates the demand for magnesium will substantially increase over the next few years.

“Car manufacturers, in particular, are increasingly turning to magnesium to make lighter, more fuel efficient vehicles,” said Mr Elliott.

“As this use increases naturally enough so will the demand for magnesium.”

To cater for this anticipated demand the proposed New Zealand plant would have a capacity in excess of 50,000 tonnes per annum.

SAMAG is establishing a New Zealand-based company to advance the project which will take at least three to four years to progress. The New Zealand subsidiary would have a sub-license to use the Dow magnesium process technology and be provided with appropriate management and market access agreements.

“The latter is significant as SAMAG has an off-take agreement with ThyssenKrupp Metallurgie GmbH for all of its output which would be expanded to include the proposed New Zealand operations,” said Mr Elliott.

SAMAG anticipates that at an appropriate time New Zealand investors would be invited to participate in the local operation.
For further information:

Visit Pima’s website: www.pima.com.au

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