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The China Direct Logo

In 2005 China Direct commissioned Xiaohei, a popular artist in Shanghai to create a powerful corporate image.

"The concept was to create a unique image which is representative of this innovative business model. The logo, created in the form of traditional Chinese calligraphy, symbolizes multiple ideals. Incorporating a Bull with the images of the U.S. dollar and the sign of the Renminbi (the local currency of China) the logo uses the traditional colors of China, Red and yellow, found in the official flag of China. The Bull has dual meaning; on one hand it represents the Wall Street Bull, synonymous with upward trends in the financial markets, while reminiscent of the sign of the Ox in the Chinese calendar. The sign of the Ox represents power, balance, and devotion. Those born under this sign are said to be born leaders who inspire confidence in those around them. In the same manner, China Direct has pioneered an innovative business model."

Xiaohei
Artist
Shanghai, China

CLOSE WINDOW
Managment Services Division
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Magnesium Segment

Magnesium and its alloys have many increasingly useful technological and consumer applications. Magnesium is the third most commonly used structural metal, following steel and aluminum, and is used in the production of alloys used in aircraft and automobile parts. Various forms of magnesium are also used in the manufacture of electronic equipment. Magnesium oxide is refractory and may be used as bricks and liners in furnaces. Magnesium powder is also used in flares, flashes and pyrotechnics.

Global production of magnesium was estimated to be approximately 755,000 metric tons per year in 2007 and 725,000 metric tons in 2006, with China representing approximately 80% of the world’s production.

The maximum annual production capacity within our Magnesium segment is approximately 20,000 metric tons. We estimate as planned facilities come on line, our maximum annual production capacity of the subsidiaries currently within this segment should reach approximately 50,000 metric tons annually by December 2008. Our portfolio companies in this segment are described below.

Magnesium Segment Portfolio Companies

Taiyuan Changxin Magnesium Co., Ltd. ("Chang Magnesium")

In December 2006, we acquired a 51% interest in Taiyuan Changxin Magnesium Co. Ltd., located in the Shanxi Province.

Chang Magnesium is a manufacture of magnesium, operating a magnesium plant in Taiyuan China capable of producing 8,000 metric tons of magnesium annually. The primary products include magnesium ingot, magnesium scraps, magnesium powder and other related products. Chang Magnesium produces magnesium ingot with a magnesium element in excess of 99.95%. Chang Magnesium primarily exports various forms of magnesium including but not limited to magnesium ingot, magnesium powder, magnesium scrap, magnesium alloy and various grades of ordinary magnesium slabs.

Shanxi Gu County Golden Magnesium Co., Ltd. ("Golden Magnesium")

In April 2007 we acquired a 52% interest in Shanxi Gu County Golden Magnesium Co., Ltd. Golden Magnesium operates a magnesium refinery with an annual production capacity of approximately 12,000 metric tons. Presently Golden Magnesium is implementing a construction project to increase annual capacity to 20,000 metric tons. The construction, adding an additional 8,000 metric tons of annual capacity is expected to be completed in December 2008.

Pan Asia Magnesium Co., Ltd. ("Pan Asia Magnesium")

In October 2007 we acquired a 51% interest in Pan Asia Magnesium Co., Ltd. Pan Asia Magnesium, formed in May 2001, is engaged in the production of magnesium ingots. Pan Asia Magnesium produced and sold 4,500 and 5,600 metric tons of Magnesium ingots in 2006 and 2007 respectively.

Pan Asia Magnesium is engaged in the production and sale of magnesium ingot with a magnesium element in excess of 99.95% in sizes ranging from 2 kg to 30 kg. Pan Asia Magnesium typically sells its products to foreign entities located in Europe and Asia, with approximately 70% of its production being historically sold to Chinese trading companies who export to foreign countries. The remaining product manufactured is sold directly to European and Asian countries.

Pan Asia Magnesium operates a magnesium refinery located in Taiyuan, China. The plant has the capacity to produce approximately 6,000 metric tons annually. Presently Pan Asia Magnesium is constructing two additional plants with an estimated annual capacity of 12,000 metric tons annually. Construction is expected to be completed in April 2008.

CDI Magnesium Co., Ltd. ("CDI Magnesium")

In February 2007 we acquired a 51% interest in CDI Magnesium Co., Ltd. CDI Magnesium will operate as a distributor of magnesium and magnesium alloy.

Baotou Changxin Magnesium Co., Ltd. ("Baotou Changxin Magnesium")

In February, 2008, we acquired a 51% interest in Baotou Changxin Magnesium Co., Ltd. Baotou Changxin Magnesium, located in the Inner Mongolia Autonomous Region of the Shi Guai District of Baotou City, is constructing a new magnesium facility estimated to have an annual production capacity of 12,000 metric tons. The facility is expected to be completed by June, 2008. Thereafter management of Baotou Changxin Magnesium expects to increase capacity at the facility to 20,000 metric tons in the third quarter of 2008.
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