IMCO to Start Magnesium Recycling in Germany

U.S. group IMCO Recycling Inc announced plans to build a plant in Germany to recycle magnesium, the head of its German unit said.

The company won a contract from carmaker BMW to recycle a new type of engine block with a high magnesium content. BMW will then take back the recycled metal, said Roland Scharf-Bergmann, managing director of VAW-IMCO Guss. It was hoped the plant would recycle for other customers in the future.

A magnesium recycling plant would be built next to the company's existing aluminum refinery in south Germany at a cost of around four million euros (slightly more than $5 million).

The facility was expected to start operations by the middle of next year, and produce about 5,000 metric tons of magnesium alloy annually.

The plant would have capacity of 15,000 metric tons, and the company would be seeking scrap supplies from other sources.

Last year IMCO acquired 100 percent of VAW-IMCO Guss by purchasing the 50 percent shareholding held by Norway's Hydro Aluminium, a unit of Norsk Hydro.

Its two secondary aluminum plants in Grevenbroich in central Germany and Toeging were modernized last year with new production technology.

"We produced 240,000 metric tons of aluminum last year, and this year plan to produce 270,000 metric tons," he said.

Europe's aluminum scrap market remains tight because of aggressive purchasing by Asian consumers, especially China, to supply their rapidly-expanding industries.

But the strengthening of the euro had brought some relief recently, he said.

IMCO had not made a decision about building a 30,000 to 35,000 metric ton per year secondary aluminum plant in north England, Scharf-Bergmann said, who also heads the group's British unit.

Planning permission for the plant has been granted from local government authorities, but the strategy of the project's main potential customer, Alcan, was unclear following its takeover of France's Pechiney.

Alcan's Latchford plant may have to be sold as part of conditions set down by the European Union for its approval of the takeover.

Until a decision is made about the Alcan disposals, no decision could be made about the new project, he said.

IMCO remained interested in purchasing more secondary aluminum smelters in southern and eastern Europe, he said.

However, targets viewed so far were unsuitable and there were no concrete takeover discussions underway. Reuters