For Investors

INTRODUCTION

Quay Magnesium Limited (QMG) is a company based in Sydney, Australia, established to invest in the magnesium alloy sector. It is listed on the Australian Stock Exchange (ASX Code: QMG).

The Nanjing plant currently is capable of producing 25,000 tonne of magnesium alloys per annum (t.p.a.).

The plant comprises a 25,000 t.p.a. production module, using a single refining unit and twin casting lines.

The factory building is large enough to accommodate a 50,000 t.p.a. facility via construction of another refining and casting module. In addition, the Nanjing site is approximately 60,000 square metres and has ample room for further expansion of alloy production, or the construction of other facilities related to magnesium production or die casting.

GLOBAL MAGNESIUM MARKET

Quay supplies the consumers of high quality magnesium alloys that die cast automotive components, lightweight electronic equipment.  Through advanced production techniques, strict product quality control and close collaboration with customers, Quay is well positioned to take advantage of the rapidly growing market demand for quality magnesium alloy.

The recent trend of sustained higher oil prices, combined with an increasing focus on reducing greenhouse gas emissions, has prompted automotive manufacturers to seek fuel efficiencies more aggressively. As this leads to further pressure to reduce vehicle weight, Quay anticipates the stimulation of a greater demand for magnesium alloys.

WHAT DIFFERENTIATES QUAY MAGNESIUM?

The suite of technologies Quay Magnesium has chosen is well proven and robust. The production process adopted has the advantage of being modular and therefore easy to expand to meet market demand.

The plant is located at the city of Nanjing, some 270 km west of Shanghai, China. The city is large, well serviced and provides a suitably skilled local work force. The location also offers significant advantages over most other alternative locations around the world, providing access to large quantities of primary magnesium metal, competitive operating costs, and a significantly lower tax rate.  Most of China’s automotive industry is located in a corridor running between Nanjing and Shanghai.

STRATEGIC LOCATION OF QUAY

Availability of Primary Magnesium:
China is the world’s largest producer of primary magnesium metal and Quay’s plant is positioned to take advantage of this abundant supply

China’s Rapidly Growing Automotive Sector:
Chinese agencies recently forecast that the domestic automobile sector would consume 176,400 tonnes of magnesium alloys by 2010, compared with 6,000 tonnes in 2003.

Favorable Plant Location and Business Conditions:
Located in Nanjing, the facility is readily accessible to road and rail transport and shipping ports for efficient export to customers.

Quay has secured a 50 year land use agreement for its site in the Nanjing New and High Technology Zone, and this agreement confirms the favourable legal and taxation treatment that applies to its subsidiary Nanjing Quay Magnesium Co. Ltd.

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