Germany's MAN Ferrostaalhas been selected for the engineering, procurement and construction (EPC) contract on the estimated $350 million project to build a large-scale magnesium smelter at Ain el-Sokhna port near Suez. The smelter is being developed by Egyptian Magnesium Company (EMAG), the project company set up by a consortium of local, Australian and German investors (MEED 3:6:05).
MAN Ferrostaal will complete the smelter project by mid-2008, with all local content to be carried out by the local DSD Ferrometalco, a subsidiary of Germany's DSD Stahl Group, which in turn is 49 per cent-owned by MAN Ferrostaal. The UK's K Home Internationalis co-operating with MAN Ferrostaal on the engineering portion. Australia's Magnesium International (MIL)is the majority shareholder in the project, with the local Amiral Investmentsand Germany's ThyssenKrupp Metallurgie (TKM)holding minority stakes. TKM has also signed a 15-year offtake agreement for 100 per cent of the smelter's 88,000-tonne-a-year pure magnesium metal output. MIL has an exclusive licence for the magnesium smelting technology of the US' Dow Chemical Companyand will convert the magnesium metal to alloys at the site. An agreement for magnesite feedstock supplies has yet to be signed, with EMAG understood to be evaluating four deposits in Egypt and Saudi Arabia. Germany's Kreditanstalt fuer Wiederaufbau (KfW) has been appointed to arrange the project's debt portion, which it will also partially underwrite. Other German and regional banks are expected to join the financing. Financial close is targeted for later this year.