Investing in Magnesium

Magnesium is an alkaline earth metal and the most commonly used structural metal after steel and aluminium. It is also used in specialty alloys and as an incendiary.

Domestic Production and Use: Seawater and natural brines accounted for about 54% of U.S. magnesium compounds production in 2010. Magnesium oxide and other compounds were recovered from seawater by three companies in California, Delaware, and Florida; from well brines by one company in Michigan; and from lake brines by two companies in Utah. Magnesite was mined by one company in Nevada, and olivine was mined by two companies in North Carolina and Washington. About 60% of the magnesium compounds consumed in the United States was used in agricultural, chemical, construction, environmental, and industrial applications. The remaining 40% was used for refractories.

In 2010, magnesium was produced by one company at a plant in Utah by an electrolytic process that recovered magnesium from brines from the Great Salt Lake. Magnesium used as a constituent of aluminum-based alloys that were used for packaging, transportation, and other applications was the leading use for primary magnesium, accounting for 41% of primary metal use. Structural uses of magnesium (castings and wrought products) accounted for 32% of primary metal consumption. Desulfurization of iron and steel accounted for 13% of U.S. consumption of primary metal, and other uses were 14%.

Recycling: In 2010, about 20,000 tons of secondary production was recovered from old scrap. Some magnesia-based refractories are recycled, either for reuse as refractory material or for use as construction aggregate.

Import Sources (2006–09): Magnesium metal: Canada, 36%; Israel, 25%; China, 11%; Russia, 8%; and other, 20%. Magnesium compounds: China, 78%; Austria, 6%; Canada, 4%; Brazil, 3%; and other, 9%.

Events, Trends, and Issues: In October, the U.S. Department of Commerce, International Trade Administration (ITA), made a final determination of antidumping duties for imports of pure magnesium from China into the United States for May 1, 2008, through April 30, 2009. The ITA determined a duty of 0% ad valorem for one company and a China-wide duty of 111.73% ad valorem, the same as the China-wide rate had been since the 2007–08 review. In its final review of primary magnesium shipments to the United States from Russia from April 1, 2008, through March 31, 2009, the ITA determined that the dumping rate for one of the two Russian primary magnesium producers was 0% ad valorem. For the other, even though the company did not sell material into the United States during the period of review, the ITA determined that if any material from the company had entered the United States through another firm, it would be subject to the “all others” rate of duty established at the time that it was imported into the United States. Normally, if a company had not made any sales into the U.S. market, the antidumping duty would be rescinded. The ITA also completed an expedited 5-year sunset review of magnesium alloy imports from China and pure and alloy magnesium imports from Russia into the United States. Because no party in the original determination notified the ITA that it intended to participate in the reviews, the ITA determined that revocation of the antidumping orders would likely lead to a continuation of dumping. As a result, the ITA maintained the antidumping duty orders. For alloy magnesium from China, two companies had a duty of 49.66% ad valorem, and the China-wide duty was 141.49% ad valorem. For pure and alloy magnesium from Russia, one primary magnesium-producing firm had a duty of 21.71% ad valorem, the other had a duty of 18.65% ad valorem, and the Russia-wide rate was 21.01% ad valorem.

U.S. magnesium consumption increased in 2010 from the low level in 2009 as end-use markets that had been significantly affected by the global economic downturn began to recover slightly. Magnesium prices rose slightly in the United States because of tight supplies resulting from the antidumping duties assessed on magnesium imports from China and Russia. The duties also led to imports that were lower than historic levels, with Israel accounting for 62% of the total of U.S. imports of metal and alloy through the first 8 months of 2010. Magnesium supplies in the United States also were affected as a new titanium sponge plant in Rowley, UT, which began operating at the end of 2009, ramped up to full production. Significant quantities of magnesium used for titanium tetrachloride reduction were required for the initial startup period; the magnesium was supplied by the nearby U.S. producer.

In June, the U.S. Environmental Protection Agency (EPA) issued a final rule that requires annual greenhouse gas (GHG) emissions reporting from four source categories—one of which was magnesium production. Each facility must report total annual emissions for each of the following cover or carrier gases—sulfur hexafluoride, hydroflurocarbon HFC-134a, the fluorinated ketone FK 5-1-12, carbon dioxide, and any other fluorinated GHG as defined in the rule. Collection of the data was scheduled to begin on January 1, 2011, with the first report due on March 31, 2012. In a ruling by the 10th Circuit Court of Appeals, a 2007 decision exempting the U.S. primary magnesium producer’s waste streams from regulation by the EPA under the Resource Conservation and Recovery Act (RCRA) was thrown out. In the lawsuit originally begun in 2001, the company argued that the EPA exempted five wastes from regulation under subtitle C of RCRA and that the EPA could not change that interpretation, at least not without first complying with the notice and comment procedures of the Administrative Procedure Act. The district court had agreed with the company, but, according to the new appellate court ruling, because the EPA never previously adopted a definitive interpretation, it remained free to change its mind and issue a new interpretation of its own regulations. The appellate court remanded the decision to the district court. The first production of magnesium from a new primary magnesium plant in Malaysia began in June, although the plant had not ramped up to commercial-scale production. The facility in Taiping in the state of Perak used locally mined dolomite feedstock for a Pidgeon-process plant using natural gas to fuel the process. The initial production capacity was 15,000 tons per year. The company planned to double the capacity in the future and to begin producing magnesium alloys.

Although still below 2008 production rates, U.S. steel production through July 2010 was 62% higher than that in 2009. Increased steel production and capacity utilization led to increased imports of dead-burned magnesia, compared with those in 2009. By July, dead-burned magnesia imports were almost 200,000 tons (gross weight), which was more than those for the full year 2009.

In August, the U.S. Department of Commerce, International Trade Administration (ITA) published its final determinations of its investigation of dumping of magnesia-carbon brick from China and Mexico into the United States. The ITA established a dumping margin of 128.10% ad valorem for 14 producing/exporting companies in China and 236% ad valorem as the China-wide rate. For Mexico, the ITA determined a dumping margin of 57.90% ad valorem. The ITA also found that subsidies existed for magnesia-carbon bricks exported from China, so it established countervailing duties of 24.24% ad valorem for most companies exporting from China, with one firm having a rate of 253.87% ad valorem.

In Australia, the country’s leading magnesia producer returned to full production capacity in June after running at about 25% of capacity since the beginning of 2009. The company also completed an expansion that increased its capacity by about 50% to bring the total to 175,000 tons per year of caustic-calcined magnesia, 135,000 tons per year of dead-burned magnesia, and 35,000 tons per year of fused magnesia. Another firm received State government approval to develop its magnesite property in Tasmania and, in the fourth quarter, began drilling to delineate the magnesite resource. Several companies planned new magnesia plants. In Spain, the leading magnesite producer planned to open two new mines in 2011 with about 57 million tons of magnesite reserves to replace the company’s operating mines that, at present mining rates, have a remaining life of 7 to 8 years. In May, a company in Turkey began production from a new 6,500-ton-per-year fused magnesia furnace, which doubled its fused magnesia production capacity. In India, a new joint venture planned to develop the Panthal magnesite deposit and build a 30,000-ton-per-year dead-burned magnesia plant at the site by 2012. The world’s second-ranked olivine producer planned to close its 1.1-million-ton-per-year mine in Greenland by yearend. The company cited lower olivine prices and unfavorable market conditions as reasons for the closure. The mine had been operating only since 2005.

World Primary Production and Reserves: Magnesium metal is derived from seawater, natural brines, dolomite, and other minerals. The reserves for this metal are sufficient to supply current and future requirements. To a limited degree, the existing natural brines may be considered a renewable resource wherein any magnesium removed by humans may be renewed by nature in a short span of time.

World Resources: Resources from which magnesium may be recovered range from large to virtually unlimited and are globally widespread. Resources of dolomite and magnesium-bearing evaporite minerals are enormous. Magnesium-bearing brines are estimated to constitute a resource in the billions of tons, and magnesium can be recovered from seawater at places along world coastlines.

Resources from which magnesium compounds can be recovered range from large to virtually unlimited and are globally widespread. Identified world resources of magnesite total 12 billion tons, and of brucite, several million tons. Resources of dolomite, forsterite, magnesium-bearing evaporite minerals, and magnesia-bearing brines are estimated to constitute a resource in billions of tons. Magnesium hydroxide can be recovered from seawater.

Substitutes: Aluminum and zinc may substitute for magnesium in castings and wrought products. For iron and steel desulfurization, calcium carbide may be used instead of magnesium. Alumina, chromite, and silica substitute for magnesia in some refractory applications.

Magnesium Producers

Advanced Magnesium Alloys - - magnesium recycling
Applied Magnesium International
Baotou Xinjin Magnesium Industry
Beacon Hill Resources - magnesite deposits in northwest Tasmania
Buschle & Lepper - seawater magnesia
Compass Minerals (NYSE: CMP) - Magnesium chloride
Continental Casting
CVM Minerals
Dead Sea Magnesium
Fugu Coal & Chemical Group
Grecian Magnesite - Yerakini magnesite mines
K-Mag - - This division of Mosaic Co. (NYSE: MOS) makes potassium magnesium sulfate fertilizers which are an excellent source of magnesium, potassium, and sulfur.
Korea Magnesia Clinker Industry Group
Latrobe Magnesium (ASX:LMG)
Magnesium Resources Corp. of China
Ningxia Huaying Mining Group
Ningxia Huiye Magnesium
North Cape Minerals AS - Norwegian olivine producer
Olivine Corp. - olivine mine and processing plant
Pan Asia Magnesium
Quay Magnesium (ASX:QMG) -
Queensland Magnesia
Quintermina AG
Qinghai Salt Lake Industry Group
Revstone Industries - aluminum and magnesium diecasting
Rio Tinto -
Saudi Arabian Mining Co. (Ma'aden) - Zarghat high-grade magnesite depoist
Shanxi Gu County Golden Magnesium
Solikamsk Magnesium Works
Spartan Light Metal Products - magnesium diecasting
Steinsvik Olivin AS
Sungri Trading Co. - caustic-calcined magnesia
Taiyuan Changxin Magnesium
Taiyuan Tongxiang Magnesium
Taiyuan Yiwei Magnesium
Tianjin Magnesium International
Trabzon Mining and Metal Corp.
UCM Group - fused magnesia
Unimin Corp - olivine mine and processing plants
U.S. Magnesium -
VSMP-Avimsa Corp.
Yiwei Magnesium

Magnesium price chart -

International Magnesium Association -
Magnesium EFM e.V. -

Magnesium News
2011-07-06 - (mb) - Low-priced magnesium imports making inroads in US market
2011-06-27 - (nn) - High-energy density magnesium batteries for smart electrical grids
2011-06-24 - (bw) - Research and Markets: Magnesium Market Review
2011-06-15 - (mw) - Compass Minerals to nearly double its magnesium chloride production capacity
2011-06-13 - (pi) - China Direct Industries provides third quarter fiscall 2011 magnesium segment update
2010-11-01 - (fc) - How a handful of countries control the Earth's most precious materials

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