Chinese, Russian Firms to Build Titanium Sponge Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Aricom PLC (London) has signed a memorandum of understanding with ChinaLCO to build a titanium sponge production plant in Jiamusi City in Heilongjiang Province. An investment of $300 million, expected to be funded on a 7:3 debt-to-equity ratio, will be earmarked to build the titanium sponge factory within three years in Jiamusi.

The factory is designed to produce 15,000 tons of titanium sponge every year, and Aricom and ChinaLCO have started research to raise the capacity to 300,000 tons a year. The final products will be sold through ChinaLCO starting in about 15 years. Construction on the titanium sponge factory was planned to start in July, according to a Reuters report.

Ilmenite needed in the first 15 years will be sourced from Aricom's Kuranakh mine in eastern Russia. Reports show that this area can produce a further 900,000 tons a year of titano-magnetite ore, containing an average 62% iron.

The feasibility report, finished by the two groups before the deal was signed, shows the taxed profit rate will be up to 21%. Statistics from September 2007 showed that the total annual capacity of China's 19 titanium sponge producers was 49,300 tons, and in 2006 they produced 19,732 tons of products. Among the 19 producers, 10 could produce more than 2,000 tons every year, and six have produced more than 1,000 tons.

Last month, a Guizhou company showed its intention to invest $137 million to build a 10,000-ton-per-annum titanium sponge project. In the last quarter of 2007, Panzhihua Steel (Sichuan Province) and another Guizhou company started two projects with total annual capacity of up to 15,000 tons.

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