Shareholders of Chilean molybdenum processor Molymet approved a US$216mn capital increase with the issue of 12.7mn shares to be used for funding of several growth projects that could include organic expansions and acquisitions, according to company CEO John Graell.

With demand rising steadily and molybdenum prices at record levels of around US$33.00/lb, Graell said Molymet's main objective is increasing capacity.

"That has meant building a new plant roughly every four years," the CEO told reporters Thursday on the sidelines of an outstanding shareholder meeting to approve the capital increase.

The company's Mejillones plant in northern Chile's region II is scheduled for completion at the end of 2009, following which the company would remain on the 4-year track to build its next operation while also considering expansions to Mejillones, he said.

Mejillones will have an initial processing capacity of 33Mlb/y (14,969t/y) to convert molybdenite concentrate into molybdenum trioxide but has been designed to accommodate expansions up to four times that if necessary, according to Graell.

As for new standalone operations, the executive said the company is seriously considering China and other parts of the world where it has no operations as the next destination for a plant.

INTEGRATION, ACQUISITIONS & BONDS

In addition, Molymet is involved in preliminary studies on whether to venture into the mining industry as a way to secure less expensive raw materials while also looking at moving further downstream towards producing more value-added products, according to Graell.

Molymet could also start buying scrap molybdenum and recycling it as a way to save on its raw material costs, and would likely purchase the scrap from its own customers once they are done with the products previously sold, he said.

On the company's recent placement of bonds in Mexico, Graell said they could take longer to sell than previously expected because of the present wariness in the global financial market brought on by the US mortgage and investment bank crisis.

In July Molymet launched a bond program in Mexico for up to 1.50bn pesos (US$140mn).

The company operates in Chile, Mexico, Germany and Belgium, and made US$151mn in profits last year with sales of 77,374t. Its products include molybdic oxide powder and briquettes, ferromolybdenum, perrhenic acid, rhenium metal powder and pellets, and ammonium dimolybdate. – BNamericas