May 28 2003
The magnesium plant currently being built at Stanwell, Queensland, Australia has run into more problems. The plant owners, Australian Magnesium Corp are currently looking for a new strategic investor after the project continues to rack up costs with its non-fixed price construction contract.
Only a year ago, the project ran into similar difficulties and required the state and federal governments to kick in $150 million each to prop up the project.
Australian Magnesium are looking to secure a further $200 million in cash to ensure that the project can be completed. This will be used to cover cost over runs and allow them sufficient breathing space to allow them to progress.
While they are believed to be in discussions with potential investors, they are thought to be struggling to cement a deal before they start running out of cash next month.
At the same time, shareholders are bailing out, with stocks closing at 13cents, down 20%, after making a small recovery.
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