Magnesium International Limited
A.C.N. 003 669 163

STOCK EXCHANGE ANNOUNCEMENT
Dated: 27 June 2003

MEDIA RELEASE

MIL to call for Expressions of Interest for Power Station Development at Port Pirie

Magnesium International Limited (MIL) has today announced its intention to call for Expressions of Interest (EOI) from potential power station developers (Developers), for the construction of a new power station at Port Pirie. MIL’s intention in issuing this EOI is to obtain an equity contribution towards its SAMAG magnesium project.

Background

MIL was granted a Development Approval for its SAMAG magnesium smelter in 2001, which is current until July 2004. Under the terms of the Development Approval, SAMAG is permitted to construct a 400MW gas fired base load power station. The Port Pirie site is one of only a few sites in South Australia with a development approval in place for the construction of a power station.

In the absence of an existing development approval, any company intending to construct a new power station would incur significant cost and time delays in obtaining a new development approval. MIL considers that the provision of a fully approved site for a base load power station is an extremely valuable asset.

MIL does not intend to purchase its power for the SAMAG smelter from the new power station as it already has a contract, for all its power requirements, with NRG Flinders. The power station can therefore be developed independently of the SAMAG project.

Timing

MIL will shortly be appointing a major Australian investment bank to undertake the coordination of the EOI. Documentation relating to the EOI should be forwarded to Developers in July. MIL’s target date for negotiation of a Memorandum of Understanding with a Developer is October 2003.

Equity

MIL is currently assembling a cornerstone equity group for the SAMAG project, with a target of $80 million. A further $150 million in equity will be sourced from the general equity markets in Australia and the UK when this cornerstone equity group is in place. The major targets for this cornerstone group are organizations which will benefit directly from the commencement of the smelter project.

MIL recently announced that Thiess Ltd has agreed to contribute up to $20 million in cornerstone equity in return for the awarding of a fixed price EPC contract to construct the first module of the smelter. The value of this EPC construction contract will be approximately $500 million.

Proceeds from the successful tender to the EOI will form a part of the cornerstone equity amount.

Rights Issue

MIL is currently undertaking a 1 for 5 rights issue to raise $8.3 million to fund the continuing development of the SAMAG smelter project and the MIL/ CSIRO sheet metal venture. The issue closes on Monday 30 June, 2003.

For further information:

Gordon Galt
Managing Director

In accordance with Australian Stock Exchange listing requirements, the geological information in this report has been based on information provided by geologists who are corporate members of the Australian Institute of Mining and Metallurgy or Australian Institute of Geoscientists and who have had in excess of 5 years experience in their field of activity.