Major Japanese integrated trading and investment business Marubeni has taken an interest in Canadian firm Alliance Magnesium Inc. (TSX: ACK)
Alliance Magnesium Inc. (AMI) specialises in the production of primary magnesium from serpentine mine tailings, and secondary magnesium to make value-added products.
Marubeni’s investment in AMI will be in the form of common shares for C$16.7 million and will be dedicated to the financing of the commercial production demonstration phase (phase 1), an investment of more than C$100 million whose construction will begin in 2020. This first phase will be followed by a 50,000 tonne commercialisation plant, whose construction is planned for 2022.
Michel Gagnon, AMI’s Chairman and CEO said that in addition to the investment, Marubeni will contribute to the development of AMI’s business through a presence on its Board of Directors and the participation in various technical and corporate committees.
Mr Gagnon said AMI will benefit from the expertise and extensive experience of Marubeni in the deployment of large-scale operations and particularly in companies in the light metals and critical materials sector.
“We are honoured to have Marubeni join our major industrial project,” Mr Gagnon said.
“Its presence, beyond the amount of money invested, will enable AMI to strengthen its position as a magnesium producer of international stature. In addition, this investment is very much in line with the further development of the light metals industry in Quebec.”
Dr Joel Fournier, President and Chief Technology Officer of AMI, said the company aims to produce the world’s most responsible magnesium, which will bring a significant contribution to the reduction of GHGs attributable in particular to the transportation industries.
“Marubeni’s strategic contribution will go a long way towards achieving this goal,” he added.
Demand for Magnesium has increased significantly in order to reduce the weight of vehicles. It is the lightest of all commonly used materials such as aluminum and steel and is sort after for its high vibration damping capacity, high strength / weight ratio and high stiffness / weight ratio.
“Its demand is growing strongly, mainly in the transportation sector. Magnesium is also used in aluminum alloys and is considered one of the most important critical materials both in Europe and the United States. Magnesium fits very well into the Government of Quebec’s strategy for the electrification of transportation,” Dr Fournier said.