IMCO Recycling Inc. is to start operations in December at a new plant in Germany to produce magnesium from scrap, the head of its German unit said.
Construction of the recycling plant next to the company's existing aluminum refinery at Toeging in south Germany was under way, said VAW-IMCO managing director Roland Scharf-Bergmann.
The plant would initially produce about 5,000 metric tons of magnesium a year, a level scheduled to be reached in the first quarter of next year.
Design capacity would be 15,000 metric tons.
"We will recycle a wide range of magnesium scrap...and will produce cast magnesium blocks," Scharf-Bergmann said.
"We have received a large number of enquiries about the production. Some of our aluminum customers have also expressed great interest in purchasing magnesium from us."
The motor industry was expected to take more than 90 percent of output.
Last year IMCO bought 100 percent control of German aluminum producer VAW-IMCO Guss by purchasing the 50 percent stake held by Norway's Hydro Aluminium, a unit of Norsk Hydro.
Its two secondary aluminum plants in Germany were modernized last year.
He said the improvements meant its German aluminum output would rise to about 270,000 metric tons in 2004 from 240,000 metric tons last year.
He said there was still no sign of a large-scale return of Chinese scrap metal buyers to the German market.
Up to May this year, when China's government took measures to cool the country's economy, Chinese buyers had aggressively purchased German scrap, causing supply problems for German secondary aluminum producers.
"Since May scrap availability has improved considerably and we do not have any supply problems," he said. "There are no signs that the Chinese are returning although there is a lot of talk about this."
No decision had been made by IMCO about a plan to build a 30,000 to 35,000 metric ton per year secondary aluminum plant in in northern England, Scharf-Bergmann said.
Planning permission for the plant had been received, but the main potential customer was Alcan, which was selling its rolled products activities following its takeover of France's Pechiney.
Until the future of the Alcan disposals was clear, no strategic decision could be made about the new project, he said. Reuters