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                        AMENDMENT NO. 3 TO AMENDED AND
                     RESTATED LOAN AND SECURITY AGREEMENT


                       MAGNESIUM CORPORATION OF AMERICA
                             238 North 2200 West
                         Salt Lake City, Utah  84116

                                                                 August 28, 1997

Congress Financial Corporation
1133 Avenue of the Americas
New York, New York  10036


Gentlemen:

     Congress Financial Corporation ("Lender") and Magnesium Corporation of 
America ("Borrower") have entered into certain financing arrangements 
pursuant to the Amended and Restated Loan Agreement and Security Agreement, 
dated as of August 4, 1993, between Lender and Borrower, as amended pursuant 
to Amendment No. 1 to Amended and Restated Loan and Security Agreement,  
dated January 31, 1996 and Amendment No. 2 to Amended and Restated Loan and 
Security Agreement, dated July 3, 1996 (as amended hereby and as the same may 
be further amended, modified, supplemented, extended, renewed, restated or 
replaced, the "Loan Agreement," and together with all agreements, documents 
and instruments at any time executed and/or delivered in connection therewith 
or related thereto, collectively, the "Financing Agreements").

     Borrower has requested that Lender agree to certain amendments to the 
Loan Agreement and Lender is willing to agree to such amendments to the Loan 
Agreement, subject to the terms and conditions contained herein.  By this 
Amendment, Lender and Borrower desire and intend to evidence such amendments.

     In consideration of the foregoing, and other good and valuable 
consideration, and the respective agreements and covenants contained herein, 
the parties hereto agree as follows:

     1.  DEFINITIONS.  For purpose of this Amendment, unless otherwise 
defined herein, all terms used herein, including, but not limited to, those 
terms used and/or defined in the recitals hereto, shall have the respective 
meanings assigned thereto in the Loan Agreement.

     2.  INDEBTEDNESS.  Section 7.3 of the Loan Agreement is hereby amended 
by deleting Section 7.3 (1) thereof in its entirety and substituting the 
following therefor:  

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          "(1) Indebtedness of Borrower to Renco Metals, outstanding as of the
     date hereof in the amount of $71,598,418.45, which Indebtedness is, in all
     respects, subject and subordinate in right of payment to the right of
     Lender to receive the prior indefeasible payment in full of all of the
     Obligations; PROVIDED, THAT, Borrower shall not make any payments in
     respect of such Indebtedness except to the extent permitted under Section
     7.6"

     3.  TRANSACTIONS WITH AFFILIATES.  The proviso to Section 7.6(b) of the 
Loan Agreement is hereby amended by deleting the reference to "April 30, 
1993" contained therein and substituting the following therefore: "July 3, 
1996."
                 
     4.  REPRESENTATIONS, WARRANTIES AND COVENANTS.  In addition to the 
continuing representations, warranties and covenants heretofore or hereafter 
made by Borrower to Lender pursuant to the other financing Agreements, 
Borrower hereby represents, warrants and covenants with and to Lender as 
follows (which representations, warranties and covenants are continuing and 
shall survive the execution and delivery hereof and shall be incorporated 
into and made a part of the Financing Agreements):

         (a)  No event of Default exists on the date of this Amendment (after 
giving effect to the amendments to the Loan Agreement made by this Amendment).

         (b)  This Amendment has been duly executed and delivered by Borrower 
and is in full force and effect as of the date hereof, and the agreements and 
obligations of Borrower contained herein constitute legal, valid and binding 
obligations of Borrower enforceable against Borrower in accordance with their 
respective terms.

     5.  CONDITIONS PRECEDENT.  The effectiveness of the other terms and 
conditions contained herein shall be subject to the receipt by Lender of an 
original of this Amendment, duly authorized, executed and delivered by 
Borrower.

     6.  EFFECT OF THIS AMENDMENT.  Except as modified pursuant hereto, no 
other changes or modifications to the Loan Agreement or the other Financing 
Agreements are intended or implied and the Financing Agreements are hereby 
specifically ratified, restated and confirmed by all parties hereto as of the 
effective date hereof.  To the extent of conflict between the terms of this 
Amendment and the other financing Agreements, the terms of this Amendment 
shall control.

     7.  GOVERNING LAW. The rights and obligations hereunder of each of the 
parties hereto shall be governed by and interpreted 



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and determined in accordance with the laws of the State of New York.
                 
     8.  BINDING EFFECT.  This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
                 
     9.  COUNTERPARTS.  This Amendment may be executed in any number of 
counterparts, but all of such counterparts shall together constitute but one 
and the same agreement.  In making proof of this Amendment, it shall not be 
necessary to produce or account for more than one counterpart thereof signed 
by each of the parties hereto.

    10.  FURTHER ASSURANCES.  The parties hereto shall execute and deliver 
such additional documents and take such additional action as may be necessary 
or desirable to effectuate the provisions and purposes of this Amendment.

    Please sign the enclosed counterpart of this Amendment in the space 
provided below, whereupon this Amendment, as so accepted by Lender, shall 
become a binding agreement between Borrower and Lender.

                                          Very truly yours,

                                          MAGNESIUM CORPORATION OF AMERICA

                                          By:     /s/ Roger L. Fay
                                             -----------------------------
                                          Title:     Vice President
                                                --------------------------

AGREED:

CONGRESS FINANCIAL CORPORATION

By:     /s/ Josephine Norris
    -------------------------------
Title:     1st Vice President
      -----------------------------



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