Chinese inland alumina refineries tend to rely on imported bauxite
----Interview with Mr. Jue Fan
Board Director
Topsun International Industrial Limited
- Registered in Hong Kong in 2012, Topsun International Industrial Limited is involved in a set of mining investment, mining and bauxite trade, focusing on world bauxite production and sales.
Branches and offices abroad: Indonesia branch, Malaysian branch, Turkish office, Montenegro office.
Subsidiaries in China: Henan Topsun Minerals Co., Ltd (subsidiary); Henglang Co., Ltd. (subsidiary); Shandong Langhai New Material Co., Ltd. (joint venture holding).
Ore stock yard in China: Xiaoyi and Lvliang in Shanxi
- Asian Metal: For the stricter environmental protection policy, a number of alumina producers in Shanxi and Henan started using imported bauxite from the second half of last year. Do you think the phenomenon will continue?
- Mr. Fan: China's policy on environmental protection will be consistent and get strengthened. Chinese alumina refineries will be more dependent on imported bauxite in the near future and the imported bauxite price will be preferable. More and more alumina refineries will conduct technology shift to low temperature line. It will become a trend for alumina refineries in Shanxi and Henan to consume imported bauxite.
- Asian Metal: Does Topsun have bauxite business in Henan and Shanxi? What is your main bauxite source? And how about the specifications?
- Mr. Fan: Our marketing channels include Shandong province and inland regions of Shanxi and Henan. We have traditional bauxite source from Indonesia and Malaysia. Besides, we started importing bauxite from Montenegro and Jamaica years ago, aiming at inland alumina refineries. The quality of bauxite from Montenegro and Jamaica is more easily accepted by inland refineries. From last year, we started cooperation with a few refineries inland.
- Montenegro bauxite: Al2O3 /58-60%, T-SiO2/3-4%; Jamaica bauxite: Al2O3 /48-49%, T-SiO2/1.5%.
- We are the sole agent of Montenegro and Jamaica bauxite.
- Asian Metal: When did you start importing bauxite from Montenegro and Jamaica? How about the import volume?
- Mr. Fan: We started importing bauxite from Montenegro in 2017 and the total volume has reached around 1 million tonnes until this May. By developing new areas, the import volume for 2019 may rise by 40-50% YOY. From the second half of 2018, we started Jamaican bauxite and have imported around 600,000t until this month, and the volume for 2019 may reach 1.5 million tonnes.
- Asian Metal: Which port do you use for bauxite from Montenegro and Jamaica? How about the transportation from the port to Shanxi and Henan?
- Mr. Fan: The main ports are Huanghua Port and Lianyun Port and we mainly use trains for land transportation. For years of long-term cooperation, the two ports offer better conditions for us, ensuring timely delivery from port to refinery.
- We now have bauxite storage yards in both Xiaoyi and Lvliang of Shanxi to ensure in time supply and small-volume demand. We also plan to build the same kind of yard in Sanmenxia of Henan. Therefore, we will meet more demand from Shanxi and Henan.
- Asian Metal: Since last year, a number of consumers complained about the price jump of Montenegro bauxite. Will you adjust the price this year?
- Mr. Fan: Frankly speaking, a few consumers were not clear about the true market. We conduct cave mining for monohydrate Montenegro bauxite and the mining cost is high. In addition, we need to load bauxite for three times, so the transportation cost is high. I think we can control the cost better with the import volume expansion and we will have a preferable price. Inland end users also prefer better quality bauxite with the same transportation cost.
- Asian Metal: The bauxite supply from Guinea and Indonesia increased a lot. What is your opinion on the imported bauxite price in the second half of this year?
- Mr. Fan: It is true that the import volume increased a lot. However, the demand for imported bauxite is also rising. I think the price will be firm without any big change.
- Asian Metal: How about the export policy in Montenegro and Jamaica? Is there export tax?
- Mr. Fan: Our partner in Montenegro is the only one owning bauxite mining right and export license in the country. In Jamaica, our partner is the only miner who has export right. Both countries have no export tax on bauxite now. We are confident in long-term cooperation.
- Asian Metal: Do you have any other bauxite sources?
- Mr. Fan: Last year, we set up an office in Turkey to follow better bauxite mines. One area is going to provide bauxite Al2O3 /56-57%，SiO2/4-5% with a monthly volume of 60,000-70,000t. The first shipment is scheduled in late July.
- We may restart Malaysian bauxite in October with a monthly volume of 200,000t and quality of Al2O3 /46-47%, T-SiO2/5%.
