Magnola late to bloom

Already well behind schedule, Noranda (NRD-T) has again revised the startup date for commercial production at its Magnola magnesium plant in Quebec.

The company now expects Magnola to hit its commercial stride during the first quarter of 2003. Noranda had previously expected to make the milestone during the fourth quarter of 2002. Originally, the facility was slated to reach commercial production in the first quarter of 2001.

Noranda has also lowered Magnola’s 2002 magnesium production target to 25,000 tonnes from the previously projected 55,000 tonnes. During the recent third quarter, Magnola produced 7,168 tonnes of magnesium. In all of 2001, the troubled operation cranked out 9,339 tonnes of pure magnesium and magnesium alloy.

The latest delay is the result of an electrolyte leak in one cell, which was shutdown for repairs. The operation continues to suffer blockages in the magnesium chloride prill transport system. The company also reports damage to some electrodes in the electrolysis cells.

Currently, Noranda has 23 out of Magnola’s 24 electrolytic cells running at about 70% of capacity.

The project’s expected total cost remains at $1.1 billion. The original capital budget was $733 million.

Magnola is 80% owned by Noranda; the Socit gnrale de financement holds the remaining 20%.