China Armco Metals Inc announced that Armco & Metawise Limited, the company's wholly owned subsidiary, has entered into a contract to purchase 749,000 tonnes of Brazilian manganese ore fines over the next 16 months which could result in sales of up to USD 180 million over the contract period based on current market prices for manganese ore of this type.

Over 90% of magnesium ore demand is for the production of iron manganese alloys used in the steel industry. It is also used in the production of non ferrous alloys with aluminum, magnesium, copper, nickel and zinc.

In the production of steel, the presence of the manganese is essential for sulfur control, and, in special steels, for the control of carbon and phosphorus. Manganese ore has been in high demand recently, as the Chinese steel industry has continued to rebound in 2010 with industry forecasts calling for continued growth.

Mr Kexuan Yao CEO & chairman of China Armco Metals Inc said that "Securing this contract is a significant step forward for our company's metals distribution operation as we move through 2010. With the ability to sell this product into China under favorable terms we have significantly strengthened our overall supply capabilities. Upon successful delivery over the term of the contract, we are in a position to significantly boost our top and bottom line performance for the remainder of 2010 and well into 2011. We look forward to building on our relationships with this and other international suppliers in the coming months as we continue to see a strong environment for industrial metals in China."