News Releases Back to List

Methanex to Write Down New Zealand and Medicine Hat Methanol Facilities

November 21, 2003

VANCOUVER, BRITISH COLUMBIA--Methanex Corporation announced today that it will write down the carrying value of its methanol production assets in New Zealand and Alberta. The non-cash before and after-tax charge of approximately US$130 million will be taken in the fourth quarter of 2003.

In February 2003, following a re-determination process, Methanex lost substantially all of its remaining contractual natural gas entitlements from the Maui field offshore New Zealand. Since then, the Company has performed a comprehensive review of options and pursued multiple avenues but has not been able to secure sufficient quantities of natural gas feedstock at an economical price.

The Medicine Hat facility has been idled since 2001 and the write-down of the plant reflects the Company's view on long-term North American natural gas prices and its reduced reliance on North American production as it continues to implement its low-cost strategy of expanding methanol capacity in regions with low feedstock costs.

Prior to the write-down, annual depreciation for these assets totaled approximately US$30 million.

Bruce Aitken, President and COO of Methanex commented, "The write-down of these assets reflects the changed economics for natural gas in both New Zealand and North America. Despite the write-downs, we continue to work to secure enough gas to produce from 0.5 to 1.0 million tonnes of methanol in New Zealand during 2004. Prospects beyond 2004 are uncertain." Mr. Aitken concluded, "We continue to view Medicine Hat as valuable swing capacity to supplement our low-cost methanol production hubs in Chile and Trinidad."

Methanex also separately announced today that it has commenced a solicitation of consents to a proposed amendment to the Indenture relating to its 7.75% notes due August 15, 2005. The Indenture provides that Methanex may not make certain shareholder distributions, other than dividends of up to US$30 million in any 12 month period, if the Company's "Consolidated Net Worth", which approximates shareholders' equity, is less than US$850 million. The proposed amendment to the Indenture would allow Methanex to add back to "Consolidated Net Worth" up to US$200 million of non-cash write-downs.

Methanex is the world's largest producer and marketer of methanol. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol "MX" and on the Nasdaq National Market in the United States under the trading symbol "MEOH."



FOR FURTHER INFORMATION PLEASE CONTACT:

Methanex Corporation
Chris Cook
Director, Investor Relations
(604) 661-2600 or Toll-Free: 1-800-661-8851
Website: www.methanex.com