Norwegian firm Elkem, one of the world's biggest producers of carbon and silicon products, has made its first Asian investment, with the purchase of a bankrupt carbon factory in the northwest region of Ningxia. Elkem announced details of the project, which involves investment of US$23 million, at a signing ceremony with the International Finance Corp (IFC) yesterday. The IFC, a unit of the World Bank which lends to the private sector, is taking 20.7 per cent of the plant's capital, worth US$1.7 million, and making a loan of US$12.3 million. Elkem owns 79.3 per cent. It is the largest single foreign investment in Ningxia, one of the mainland's poorest areas. Negotiations took 25 months. The state-owned carbon plant, in Shizuishan city, was built in 1986 to process the area's rich reserves of high-quality anthracite. It has never operated at full capacity, was months in arrears in wages to its 550 workers and had made two unsuccessful applications for bankruptcy. Elkem has for 10 years bought raw anthracite from Ningxia, shipping it to Norway for processing and selling finished products to customers in Asia. 'We chose the Shizuishan plant because the anthracite there is among the best in the world,' said Ole Kristian Jenssen, plant manager. 'We have a guaranteed supply of power at a fair price and very strong support from the local government. Buying an existing plant is four times quicker and five times less expensive than building a new one.' The plant will use just over 200 workers, including five foreigners. Elkem will pay the remaining 350 workers 400 yuan (about HK$374) a month for three years while they are re-trained. Elkem is buying the land, equipment and buildings but not the debt, which remains with the old company. Elkem's long-term equity exposure is US$6.5 million. The plant's capacity is 25,000 tonnes, mainly of electrode paste and electrically calcinated anthracite, which will be exported through the port of Tianjin. It will also build a warehouse in Tianjin.