Asian Metal: Mr. Jiang, thank you for accepting the interview of Asian Metal. Firstly, please give us a brief introduction about main business of your company.

Jiang: We mainly produce zircon sand, rutile, ilmenite and zircon powder with annual capacities of 40,000t, 10,000t, 60,000t and 10,000t respectively. At present, we own 40 table concentrators, 8 groups of spiral, over 50 magnetic separation and electric separation equipments, over 40 transmission and hoisting equipments and 2 ball-grinding equipments.

Asian Metal: What do you think the price trend for zircon sand in the future and can you tell us your reasons for this?

Jiang: As far as I am concerned, prices for zircon sand will probably go up in the second half of 2017 and there are 3 reasons. Firstly, demand from high-end manufacturing industry for zircon products, such as zircon metal, compound zircon, nuclear grade zircon sponge and others, is gradually increasing now; the application of zircon products is also expanding constantly into new sectors, such as liquid metal and intelligent terminal, with immeasurable potential in the future market. Secondly, we learned that major overseas suppliers had expected that prices for zircon sand will increase by over USD100/t in the second half of 2017, which will definitely stimulate prices for Chinese zircon sand to increase further in the domestic market. Lastly, the global supply of zircon sand and raw materials, zircon concentrates and tailings, will decline gradually in the Chinese spot market in the second half of 2017 while upstream industry’s requirements on the quality of zircon sand will be stricter, which will also stimulate prices for Chinese zircon sand to go up.

Asian Metal: Just now you mentioned that the global supply of zircon sand will decrease in 2017. Would you like to explain it specifically for us?

Jiang: The 13th Five-Year Plan of China attaches more importance on industrial upgrading, technical improvement and application of new material, which will promote zircon sand suppliers and downstream users to be readjusted and will bring some influences on the supply of zircon sand in China. In addition, overseas major zircon miners are constantly reducing or halting production, resulting in gradual decline for the supply in the overall market. Thus, we think that the tight supply for zircon sand will last for some time in the Chinese market.

Iluka, RBM of Rio Tinto and Tronox are major suppliers for zircon sand in the world. In particular, Iluka has halted the production of zircon sand in Jacinth-Ambrosia Mine in Eucla since April 16th, 2016, and the production halt period will last for 18-24 months according to the market condition; its mine in Murry basin has also ended exploitation since March 2015, planning to finish processing of all stocks before October 2017; the zircon sand output of Iluka was 347,000t in 2016, but is expected to be 275,000t in 2017, down by 7.2% MOM. RBM of Rio Tinto also halted production in May 2016 for one month to make equipment maintenance and the output is expected to be less than 200,000t in 2017. The Australian mine of Tronox has entered the final phase for exploitation now with the output to down by over 35% MOM in 2017 based on expectation; its new KZN project has just gone into production since May 2016 with unstable production and transportation and other problems still existing and thus the output is expected to be nearly 200,000t in 2017. In addition, the output for zircon sand of China is also declining mainly because of the further decline for zircon ore resources in both home and abroad.

Asian Metal: How about the condition of zircon concentrates and tailings, the raw material, especially in the Chinese market?

Jiang: We learned that the number of exporters who export zircon concentrates and tailings to China are declining with less export volume. Stocks held by overseas miners are declining with deep-processing degree to be constantly improved and new miners going into production very slowly. For example, it’s more difficult for MRC of South Africa to make exploitation in Tormin mine and thus the output is also declining; Kenmare Resources has raised its recovery rates with the quality of products selling to China decreasing to some extent.

As for China, the major origin countries for imported zircon concentrates and tailings are Australia, Mozambique, Sierra Leone and South Africa. China imported 270,000t, 105,000t, 61,000t and nearly 47,000t of zircon sand from Australia, Mozambique, Sierra Leone and South Africa in 2016 respectively. However, Iluka, China’s major supplier for Australian origin zircon ores, will reduce its supply for zircon concentrates and tailings in 2017 with the output for zircon sand declining. Major suppliers for Mozambican origin zircon ores are Jinan Yuxiao Group, Kenmare Resources and Haiyu Mineral; the new mine of Yuxiao Group goes into production very slowly while the output of Haiyu Minerals is not stable enough. The main supplier for Sierra Leonean origin zircon ores is Sierra Rutile Limited which was purchased by Iluka on December 8th, 2016, and can’t export the material to China temporarily. The major supplier for South African origin zircon ores is MRC, of which the output decreases to some extent with more difficulties in the exploitation of Tormine mine.

Asian Metal: The supply for zircon ores has become a major concern of domestic beneficiation plants now. Can you source zircon ores stably?

Jiang: We mainly process American origin zircon ores. As a major purchaser, we have singed annual supply agreement with our supplier. Some batches of zircon ores purchased by us have successively reached ports of China since April with the volume of over 4,000t per month. Our raw material is of high washability with good whiteness and zircon content reaching over 36%. Thus, we can produce zircon sand (size: 80-170) with whiteness of 95-96 (based on self-inspection) and fewer by-products.

Asian Metal: Would you like to let us know the market planning of your company?

Jiang: No problem. We plan to focus on the production of zircon sand and fully take advantage of American origin zircon ores to maximize production. As for the downstream market, we will mainly develop zircon silicate industry. In addition, we will gradually raise the output of zircon powder and plan to expand the capacity to 15,000t per year. We will mainly develop refractory material industry and try to enter international market.

Asian Metal: Thank you once again for accepting the interview of us. Wish your company a better future!