Unique cost advantage for the first magnesia smelter in Gansu

Jinta Chunlong Mining Co., Ltd. was established in 2008 with talcum powder and caustic calcined magnesia powder as its main products in the early period after its establishment. It started to produce fused magnesia in 2017 after a breakthrough in beneficiation technology was made, holding two beneficiation lines of 500tpd magnesite and one beneficiation line of 300tpd mid-grade magnesite now.
Asian Metal: Please make a brief introduction to your business.
Li: Our company was established in 2008 with talcum powder and caustic calcined magnesia powder as main products in the early period after the establishment. We started to produce fused magnesia in early 2017 after a breakthrough in beneficiation technology was made. At present, we own two beneficiation lines of 500tpd magnesite and one beneficiation line of 300tpd mid-grade magnesite. We have established close cooperation with steel mills such as JISCO, Pangang and Ningbosteel as well as leading refractory manufacturers including Ruitai Technology and Henan Zhendong Technology since early 2017 and have been engaged in export business since late 2017. In particular, we have formed close partnership with Russian-based MMK now and are boosting the business cooperation with partners in Japan and Uzbekistan.
Asian Metal: Please make an introduction to the mines of your company.
Li: Our mines have obtained all necessary approvals and the mining area is about 1.5 square kilometers. We roughly own 4 million tons of magnesite reserves, among which about 350,000t have been mined. Our magnesite output is stable with steady quality.

Asian Metal: How about the production of your company since early 2018?
Li: We have produced about 20,000t of fused magnesia and 30,000t of caustic calcined magnesia since early 2018. It's expected that our mid-grade magnesia and dead burned magnesia projects to be put into production in late 2018 would have an annual capacity of 30,000t in total.

Asian Metal: What advantages does your company have compared with the magnesia enterprises in Northeast China?
Li: As the first and only fused magnesia producer in Northwest China, our company has an absolute advantage in prices in the northwest market and the freight for our products is lower than that of any producer in Northeast China. Meanwhile, our company, which is far from politic and economic centers and densely populated areas, can guarantee stable supply for high quality products in the long run as it has related policy support, self-owned mines as well as mature beneficiation technology and has laid a solid production foundation; while producers in Northeast China, who are close to political centers and the densely populated areas, have been facing strict policies and issues on resource integration in recent years, being unable to ensure long-term steady supply for high quality products. In addition, thanks to the implementation of the Great Western Development strategy and the Belt and Road policy, the transportation in our region has been notably improved. We dare not say we are much better than producers in Northeast China in above respects, but we definitely have our own advantages.

Asian Metal: As we know, prices of Chinese fused magnesia declined in the first half of 2018 and rose slightly in the recent month. What do you think of the change?
Li: Over 90% of fused magnesia in the Chinese market is produced in Northeast China. Just now, I have mentioned current issues in this region. In the first half of 2018, the mining policy for magnesite in Northeast China was loosened, but the supply of high quality magnesite was still tight. Against this backdrop, both the quality of most fused magnesia and the product standard within the industry declined to some degree, leading to generally declined prices. In fact, the price decrease in fused magnesia market in the first half of the year was mainly shown in medium-to-low grade products with prices of high grade fused magnesia just decreasing slightly. In addition, I attributed the recent price increase to the production halt of 531 companies in Yingkou, Liaoning, the news about air pollution prevention and the coming of traditionally peak season for refracotories in September and October.

Asian Metal: Would you like to share with us your opinion about possible changes in the domestic magnesia market in the fourth quarter? Please tell us your reason about it?
Li: During the so-called heating season in the fourth quarter, the supply of magnesia will be tight in China affected by the inventory replenishments of large steel mills and the issues in the above magnesia producing area of Northeast China. In my opinion, the domestic magnesia market will change more frequently in the early period of the fourth quarter but tend to stabilize in the late period.

Asian Metal: What's the plan of your company? Is it possible for your company to construct new projects?
Li: We will definitely construct new projects in the future. With a new breakthrough made in our beneficiation technology recently, we expected that we would put mid-grade magnesia and dead burned magnesia into production in late 2018. We will insist on the development path of high-end magnesite refractories in the future and consider constructing macrocrystalline magnesia, high-purity magnesia (including high-purity magnesia powder) and magnesia (dicalcium) projects in the future to meet the demand for high-end refractories in the market.

Asian Metal: Do you think your company, the first and only fused magnesia in Gansu, will be likely to increase product variety and production scale in the future?
Li: I am confident about the production and market outlook of refractories in Gansu and even the whole northwest region. After all, we have relatively sufficient resources. Furthermore, the policy and transportation in this region is relatively favorable. I hope that both the local production and market can develop well in the future.
Asian Metal: Thank you for accepting our interview. Wish your company a brighter future.