The new magnesium plant built near High River, Alta., will close following a decision by a partner not to continue funding the operation.
The production facility was built by the Magnesium Company of Canada (Magcan), a joint effort of Alberta Natural Gas (ANG) and Magnesium International. ANG said its partner stopped contributing last summer to the additional startup costs associated with the project.
Low magnesium prices, the high value of the Canadian dollar, high operating costs, high interest rates and lower-than-anticipated production contributed to ANG’s decision.
ANG had spent about $80 million on the project since it was started up in 1987. The Alberta government guaranteed a loan for 75% of the initial capital costs.
The Magcan plant, which draws its feed from a magnesite deposit near Radium Hot Springs, B.C., about 300 km from High River, was operating at about 50% capacity. The plant was expected to reach full capacity of 12,500 tonnes per year by October, about 16 months behind schedule.
Canada has two other producing magnesium facilities. Timminco (TSE) operates a magnesium plant at Haley, Ont., near Ottawa, while Norsk Hydro Canada turns out metallic magnesium (from magnesite supplied from China) at Becancour, Que. In Quebec’s Eastern Twps., Noranda Minerals and Lavalin Inc. have been testing a process to extract metallic magnesium from asbestos tailings in their Magnola joint venture.
Magnesium has a number of applications, including as an alloying agent with aluminum, as a deoxidizing and desulphurizing agent in the ferrous industry and in die-casting.
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