Asian Metal: Thanks for joining us in the interview. Would you please give a brief introduction of Topsun International Industrial Limited?

Jinde Wen: Topsun International Industrial Limited is a major mining company specialized in high-quality bauxite supply and sales by taking part in mining investment, operation and trade. With a big number of good quality bauxite resources in Indonesia, Malaysia, Montenegro and Jamaica to meet different demand of Chinese alumina refineries, the company works jointly with local mining operations in terms of bauxite investment, exploration, production, management and sales, etc. Paying high attention on bauxite quality and reliable supply, the company holds sufficient bauxite inventories in major China ports like Huanghua, Caofeidian, Laizhou, Yantai and Jingtang targeting buyers from different regions.

Asian Metal: Chinese bauxite imports volume reached around 100 million tons in 2019 and the figure will continue to rise for sure in 2020. What do you think of the reasons behind the record?

Jinde Wen: Yes, it is true. Chinese bauxite imports volume kept rising by around 20% YoY over the past three years and recorded around 100 million tons in 2019. I think the figure will continue to increase, as Chinese local bauxite resources supply is considerably not enough. Chinese annual alumina production volume increased from around 4 million tons to around 70 million tons over the past ten year, which accounts for more than 50% of the global alumina production volume. However, China's proven bauxite reserves and estimated reserves only account for 3-5% of world reserves. Excluding Yunnan, many alumina refineries inland China would use imported bauxite. In addition, new coastal alumina projects would completely rely on imported bauxite like Guangxi and Inner Mongolia.

Asian Metal: What are the advantages of imported bauxite?

Jinde Wen: Imported bauxite, which is primarily gibbsite with small diasporic content, consumes less limestone and could lower the energy consumption by more than 1/4 during the alumina production. For example, the average alumina production cost in Shandong is around RMB400/t lower than that in Shanxi. All alumina refineries in Shandong rely on imported bauxite. With regard to red mud processing, imported bauxite produces less red mud. Chinese origin bauxite would produce around 1.5t of red mud for one ton of alumina production, and the ratio for Jamaican bauxite keeps at 0.8:1; 1:1 for Indonesian bauxite; 1.2:1 for Guinean bauxite; 1.3-1.8:1 for Australian bauxite.

Asian Metal: How will Chinese alumina refineries use imported bauxite effectively?

Jinde Wen: Chinese local diasporic bauxite requests 270℃ for alumina production, while imported gibbsite bauxite only needs 145℃ and imported mixed bauxite requests 235℃. Imported gibbsite bauxite is capable of low temperature alumina production line, so alumina refineries need to shift high temperature to low temperature. Mixed gibbsite and diasporic bauxite does not request any shift and refineries only need to control temperature.

Asian Metal: How will Chinese inland alumina refineries take technical change to effectively control production cost?

Jinde Wen: Chinese inland alumina refineries could change present high temperature digestion into low temperature by isolating evaporator and preheating section and leaving level 3-4 evaporator and preheater in the low temperature digestion section. New steam heating section only requests 145℃。It roughly costs around RMB2-3 million for one production line shift with a production capacity of 1 million tons per year. Alumina production efficiency would not be affected. After the shift, refineries could swift between high and low temperature freely only equal to the cost of regular restart of the preheater.

Asian Metal: What are main advantages and disadvantages of bauxite from major three countries of Guinea, Australia and Indonesia?

Jinde Wen: Guinea is rich in bauxite and can ensure reliable supply; Guinean bauxite can be used both in low temperature and medium temperature digestion. However, Guinean bauxite is high in organics. Australian bauxite is mixed with both gibbsite and diasporic chemicals, capable of high temperature digestion; Australian bauxite is also high in organics, which will cost more in organics processing; part bauxite has low Al/Si rate, offering high request for red mud sedimentation. Indonesian bauxite has obvious advantages like easy-to-digestion, capable of low temperature digestion, energy saving; low organics, etc. The other side is the high moisture and refineries in North China need to prevent bauxite freezing. Montenegro bauxite is diasporic, with high Al/Si of 20, which can be used directly by Chinese inland alumina refineries by mixing with Chinese local bauxite. Jamaica bauxite is also featured as high Al/Si of 30 and low moisture of 6%max, which can be used in winter by Chinese inland refineries and could be mixed directly with Chinese local bauxite. However, Jamaica bauxite has high organics as well.

Asian Metal: Would you please introduce the bauxite business of Topsun International in 2020 and the strategies for 2021?

Jinde Wen: Topsun International has finished a total of bauxite import volume of around 6 million tons till late October, up by around 30% YoY, around 50% from mines invested by us jointly. We now hold around 1.5 million tons of bauxite in main ports of China. This year, we developed five new bauxite mining areas abroad and built three bauxite warehouses in China. In 2021, we will strive continuously to take more market shares. Firstly, based on present mining resources, we would explore and develop new mining resources by steadily expanding bauxite investment abroad and enlarging scales, to record around 8 million tons of imports next year. Secondly, relying on the joint investment advantage, we will establish international marketing team to improve logistics efficiency. To cope with the possible bauxite export ban in Indonesia in the near future, we invested bauxite mines in East Africa this year and have finished exploitation, to be followed by license application and mine building next year. Thirdly, to strengthen inspection group and overseas offices, invest high quality mining areas and inspection instruments in loading port; to upgrade current facilities in Southeast Asian mining areas; to strictly ensure bauxite quality by a comprehensive supervision from bauxite mine sites, stock yards to ports. Fourthly, in Chinese domestic market, our engineers would technically and directly help alumina refineries to use different bauxite effectively. Fifthly, to set up a shipping team with partners, targeting the most competitive delivery cost. Finally, to actively take part in the environmental protection during bauxite mining, join charity activities and schools assistance.

Asian Metal: Thanks for taking part in the interview. Best wishes with Topsun International.

Jinde Wen: Thanks for the opportunity.