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Magnesium Billet Plant Marked for Shutdown

June 8, 2008
Timminco will outsource materials for downstream needs

Timminco Ltd. is closing an Ontario magnesium billet operation, citing rising raw materials costs. It indicates plans to source its billets from outside suppliers. The Haley, ON, plant produces extrusion-grade magnesium billets that are supplied to a Timminco plant in Aurora, CO. It also produces magnesium granules and turnings, and those products now will be produced at a Timminco plant in Nuevo Laredo, Mexico.

Toronto-based Timminco produces magnesium alloys, cast automotive wheels, and solar-grade silicon used to produce photovoltaic cells. The latter appears to be the line of business being emphasized for future growth. Timminco uses a proprietary technology to processes metallurgical-grade silicon into low-cost solar-grade silicon.

“Our magnesium business has significant long-term potential, but current economic conditions require that we further reduce our operating costs significantly,” stated Timminco president, Light Metals, John Fenger. “The closure, although difficult, provides us with a path to profitability and potential divestiture or other strategic alternative for the rest of our magnesium business.”

Timminco estimates it will save C$5 million annually with the closing of the Haley plant. The initial charges are estimated at C$15 million to C$17 million.

Primary magnesium is increasingly difficult to source for producers of cast and extruded products. The slow shutdown of North American capacity and the reliance on Chinese and Russian suppliers has forced buyers to overcome rising global demand, tariffs, and transportation costs for the light metal.