Asian Metal: Good day, Mr. Li. Thank you for accepting our interview. Could you please make a brief introduction of your company?

Li: As the origin of Chinese cobalt industry, Ganzhou Cobalt & Tungsten Co., Ltd. (the original Ganzhou 801 Factory) was set up in 1958. Being one of the important projects of the "First Five-Year Plan", listing 36th of the 100 domestic largest non-ferrous metal smelting enterprises, our company has been awarded the "Top 500 domestic industrial enterprises with the best economic benefits", "Top 100 largest non-ferrous metal smelting enterprises" and "Top 100 Chinese enterprises". Being restructured in December 2009, major technologies, managers and proficient workers as well as intangible capitals like brands and market network of Ganzhou Cobalt & Tungsten Co., Ltd. have been injected into Jiangxi Jiangwu Cobalt Industry Co., Ltd..

Asian Metal: After moving to the new place, Jiangxi Jiangwu Cobalt Industry Co., Ltd. started to test the machines and stocking materials in 2010 and focused on debugging and developing new clients in 2011 and 2012. How about the producing conditions at present?

Li: Currently our leading products are cobalt tetroxide and cobalt powder. With a monthly output of above 100t, we see increasing demand for the material and plan to increase the output to over 200 tons in June. We generally produce 10-20 tons of cobalt powder per month. The output of other products including cobalt powder, cobalt carbonate, cobalt chloride and cobalt sulfate was at 500 metal tons in 2011 and over 300 metal tons in 2012. It is anticipated that the output is likely to reach about 180 metal tons from June and about 1,500t metal tons this year.

Asian Metal: How about the raw materials at present?

Li: Import volumes of cobalt concentrates kept at a low level last year as we were in the phase of consuming ready stocks. Currently we mainly consume cobalt concentrates and also some intermediate goods. We purchase raw materials through long-term contracts and spot businesses.

Asian Metal: Please talk about the changes of cobalt market these years.

Li：Ganzhou 801 Factory was set up in 1958, and the products were mainly used for producing alloy and ceramics at that time. Then the production capacity of cobalt increased dramatically due to the rapid development of domestic lithium battery cathode materials. As the first company which developed the technology of producing cobalt tetroxide, our company began mass production in 2002 with the output of 600tpy. As the first company that started quantity production in domestic market, we have seized the opportunity and gained fat profits. The price of cobalt keeps at about RMB170,000/t at present. Cobalt market has developed from short supply to balanced supply and demand to over supply recent years.

Asian Metal: Cobalt price began to rebound after hitting the bottom from mid April and gradually stabilized and now keeps in a downtrend. What do you think about the price adjustment?

Li: Price increase in mid April is not only supported by costs but also promoted by the news that the Democratic Republic of Congo (DRC) will ban the export of cobalt concentrates. There is much news about the changes of export policies of DRC in the market at present. I expect that Congo is unlikely to totally forbid export of cobalt and copper concentrates as the tax revenue of DRC relies on cobalt and copper export. With so many rumors, it is likely that DRC will impose tariffs on cobalt export. If so, cobalt suppliers will transfer the costs to downstream consumers and in this way the base price of cobalt concentrates will increase as well. If DRC levy taxes on cobalt mines export, a new turn of price increase will start. Cobalt price is likely to stabilize due to the current unclear policies.

Asian Metal: Cobalt industry meets with fierce competition at present and profit margin declines. Could you please make a forecast about the structure of cobalt industry and the future conditions of cobalt producing enterprises?

Li: It is inevitable to reshuffle in cobalt industry and enterprises should strengthen themselves in order to survive as the industry has stepped into a period with no profits. There are three aspects for companies that matter much, including owning high quality resources, advanced management and technologies and affluent capitals. Only having the three aspects can a company survive the fierce competition.

Asian Metal: What is the advantage of your company?

Li: Firstly the group makes strategic positioning for Jiangxi Jiangwu Cobalt Industry Co., Ltd. in domestic market and tries to develop it into the top 5 enterprises in domestic cobalt industry in 5-10 years. The company offers great support for cobalt businesses on resources and capitals as well. Let me introduce the group briefly. As the large state-owned industrial enterprise in Jiangxi province and the backbone enterprise that Jiangxi province emphasizes to support, Jiangxi Rare Metals Tungsten Industry Stock Holding Group Co., Ltd. (short for Jiangxi Tungsten Holding Group) is the largest domestic group that makes tungsten as its specialty and specializes in rare metals exploring and prospecting, mining, converting, processing, trading and equipment manufacturing. The total assets amounted to RMB13.616 billion, operating revenue to RMB13.66 billion and total import-export volume to USD594,000,000 in 2011. The company has developed four non-ferrous metal industrial sectors including tungsten, rare earth, nickel, cobalt and secondary metal and non-ore industrial sector. We will try our best to realize RMB50 billion in sales revenue and USD1 billion in total import-export revenue and become a large rare metals international conglomerate that plays an important role both at home and abroad at the end of the "Twelfth Five-Year Plan".

Secondly, our company has the advantage of technology and brand. Our employees are the original ones of Ganzhou 801 Factory who have strong will and can bear hardships. Though our team still cannot catch up with domestic advanced ones at present, we can catch up with and surpass them in the short-term through practicing and learning from others' advantages and overcoming our shortcomings.

Asian Metal: Could you please share with us about your forecast about the future cobalt market?

Li: We are optimistic about the development of electric vehicle cars in the future, however, the demand explosion for the electric vehicles will appear in 2-3 years. As a consequence, cobalt industry will gradually make resources concentration to large enterprises in the following 2-3 years. We can get the trend from the supply of cobalt concentrates and intermediate products. Many small scale ore enterprises significantly reduce their supply at present or even stop supplying. More and more cobalt materials begin to be concentrated to large suppliers. Cobalt salt market will also keep in such tendency in the future.

Asian Metal: Thank you once again for your support for Asian Metal and wish you a bright future.

Li: Thanks.