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

STOCK EXCHANGE ANNOUNCEMENT
Dated: 12 December 2003

MEDIA RELEASE

Magnesium International Ltd (MIL) announced today the signing of a formal extension of its offtake agreement with ThyssenKrupp Metallurgie GmbH (TK Met).  The agreement covers the purchase of the entire output from MIL's proposed magnesium smelter, amounting to approximately 91,000 tonnes per year at full capacity (the agreement covers all magnesium metal production plus alloying metal).   TK Met is amongst Europe's largest metals distributors and the TK group is Europe's third largest auto part maker.

In announcing the extension of the agreement, Gordon Galt, Managing Director of MIL said "TK Met has been with us now for two and a half years.  While there have been setbacks in the supply side of this industry, both TK Met and ourselves are confident that the West has a big role to play in the future for high quality magnesium alloys.  Our project relies on well proven Dow technology.   The failure of a number of new technology western projects this year means that our project is now the most advanced western project and is rated as the most likely to proceed by industry watchers, including CRU International Ltd".

Managing Director of TK Met, Mr. Peter Koken, said "the TK group (www.thyssenkrupp.com) has considerable business in the automotive sector and is a consumer of magnesium alloys at various locations.   It is our firm opinion that the demand for Mg-alloys in the automotive sector will need western quality sources as well as deliveries from China.   Along with quality considerations, reliability of supply, political and performance risks also play a major role for consumers.

We have chosen to back only MIL's proposed project because of the technical risk being considerably lower than their rivals.   The fact that ex-Dow staff are available to commission the plant is, in our opinion, also a significant asset."

Mr. Galt added "TK Met is aware of the site review we are currently undertaking in Australia, understands the motivation for it and supports us in carrying it out.  TK Met is perfectly comfortable with whatever location we decide to settle on in Australia".

For further information contact:

Gordon Galt

Managing Director

Magnesium International Limited