Noranda To Rationalize Magnesium Business
January 29, 2003
Noranda Inc., Toronto, Canada, plans to rationalize its magnesium business to respond to major structural changes that have taken place in the global magnesium industry. The rationalization is expected to improve operating results and cash flow by approximately $100 million. An after-tax charge of $630 million will be reflected in the 2002 year-end financial results. Noranda has initiated discussions with Societe generale de financement du Quebec (SGF), which owns 20% of the Magnola plant, with respect to temporarily shutting down the Magnola plant until magnesium prices increase and the resumption of operations is financially justified. However, the company will also review with the SGF the possibility of operating the cast-house section of the plant using purchased metal and expanding Magnola's presence in the magnesium alloy market with the introduction of new specialized alloys.