Noranda gains full ownership of Magnola magnesium project

Noranda (TSE) recently spent $500,000 to purchase the 50% interest it didn’t already own in a plant designed to extract magnesium from old asbestos tailings in the Thetford mines area of southeastern Quebec.

Having determined that the project is feasible in the right economic climate, Noranda’s minerals division had originally intended to develop the Magnola project in a joint venture with Lavalin Inc.

But that was before the Quebec engineering giant went bankrupt and the asset was sold to Benvest Capital, a merchant banker which considers potential development costs of $500 million to be beyond its means.

“Noranda will now seek additional partners to assist in financing this project,” said David Rodier, president of Canadian Electrolytic Zinc (CEZinc), Noranda’s zinc refinery in Valleyfield, Que.

After developing the necessary technology, Noranda has been talking with major car manufacturers in a bid to establish long-term supply contracts needed to justify future capital costs.

“Given the realities of today’s economy, we do not plan to move ahead with this project until such financing is secured,” he said.

The Magnola project involves the use of patented technology developed and tested by Magnola to extract magnesium from the asbestos tailings that remain in the area after years of mining.

At Noranda’s recent annual meeting in Toronto, President David Kerr said he expects auto industry demand for magnesium to increase as manufacturers strive to reduce the weight of cars.