INTERVIEW-China Direct sees profit boost from magnesium

* First-quarter "substantially" better than year ago

* Magnesium prices doubled in two years

By Steve James

NEW YORK, April 28 (Reuters) - China Direct CDS.O, which invests in Chinese resources companies, expects first-quarter profit to be much higher as a result of sky-rocketing magnesium prices, President Marc Siegel said on Monday.

"We knew demand was picking up, but we did not know it would double," he said of the price for the metal, which has gone from $1,850 per tonne in 2006 to more than $4,200 now.

"We got lucky, but sometimes you have to be lucky ... and smart," Siegel told Reuters in a phone interview from company headquarters in Deerfield Beach, Florida.

China Direct, which is listed on the Nasdaq after trading previously on the American Stock Exchange, owns controlling stakes in several Chinese metals, energy and chemical companies and helps Chinese businesses get access to U.S. capital.

Earlier this month, China Direct raised its full-year 2008 revenue estimate to $320 million from $270 million, and its earnings forecast to $24 million from $20 million.

It gave no quarterly outlook, but Siegel said: "The first quarter will be substantially better than the first quarter of 2007. We are comfortable with our guidance."