Magontec Limited provides update on operations and business conditions

Magontec Limited (ASX: $MGL) Executive Chairman, Mr. Nicholas Andrews, addressed shareholders at the 2024 Annual General Meeting, discussing the company's operations, business conditions, and the impact of magnesium price volatility. The address also provided an update on the progress at Magontec's key project in Qinghai province, PRC.

Executive Chairman's Address at 2024 AGM

As shareholders will recall, Magontec has cycled a period of extraordinary magnesium price volatility. The price of pure magnesium rose to over ¥60,000 a tonne due to the sudden collapse of US domestic supply, stricter Chinese environmental controls, and soaring coal prices. However, as customers found new sources of supply and coal prices retraced to prior levels, pure magnesium prices have also come back to much lower levels. The falling price of magnesium has impacted volume throughput at the company's recycling facilities in Europe. Nevertheless, the Executive Chairman expressed optimism that volumes for these facilities will be sustainable at a higher level as primary magnesium alloy volumes from the Qinghai facility come online, leading to a potential recovery in profitability.

Outlook and Key Strategic Initiatives

Magontec's operations have been influenced by the fluctuating magnesium prices, impacting profitability and volume throughput. The company's key strategic initiative, the Qinghai project, remains a central focus, with expectations of higher sales volumes of primary magnesium alloys and increased volume throughput at the company's recycling facilities in Europe. The company's strong balance sheet, net cash position, and progress at the Qinghai project indicate a positive outlook. With the Qinghai project expected to positively impact earnings for all Magontec magnesium activities, the company aims to enhance profitability across its magnesium alloy activities, including primary production, recycling, and anode manufacturing.