NBM Production By Smelting

Lateritic Nickel Ore

Grant Wu

Secretary-General of APOL

Oct. 9, 2012

Main Topics

1 Background

2 Lateritic Nickel Ore Trading in China

3 Treating Technologies for Lateritic Nickel Ore

4 Production in China

5 Some Topics in the Industry

6 APOL Introduction

2 INSG Meeting

1 BACKGROUND

---- TRIGGED BY NICKEL PRICE LME NI CASH PRICE

LME

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---- Trigged By Stainless Steel Industry

Raw Stainless Steel Production since 2001 in China

。

Year Production in ton Increasing in %

2001 67 0,000 —

2002 940,000 40

2003 1,940,000 105

2004 3,050,000 57

2005 3,700,000 21.5

2006 5,610,000 51.6

2007 7,500,000 33.7

2008 9,000,000 26.7

2009 11,400,000 26.7

2010 14,000,000 22.8

2011 15,750,000 12.5

1 BACKGROUND

1 BACKGROPUND

Stainless Steel Production in China:

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粗钢 (万吨) 表观消费量 (万吨)

2 Lateritic Nickel Ore Trading in China

World Nickel Resources:

* Lateritic Nickel ore---70%

Only low grade ore in Yunnan, China

* Sulfil Nickel ore----30%

A few minesites in China

* Nickel metal production:

Over 50% from Lateritic nickel ore

(over 70% from NBM Nickel Base Material in China)

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Truth---Lateritic Nickel Ore Treating:

1 in Many Countries ---Most plants at mine sites

except: Japan, Ukraine, South Korea…

2 In China --- Plants far from mine sites

Products: Nickel Matte, NBM, NPI

No name( Ferro-Nickel? NPI? -----NBM)

Not counted as nickel metal production

Just mentioned in stainless steel statistics

Being called NPI sometimes

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2 Lateritic Nickel Ore Trading in China

2 Lateritic Nickel Ore Trading in China

Lateritic Nickel Ore Import to China

* In 2012, Import peak from Indonesia ---in April and May.

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Year The Philippines Indonesia Total(ton)

2007 8,010,900 7,307,400 15,620,200

2008 4,011,500 7,387,000 12,280,300

2009 8,783,400 7,237,300 16,575,800

2100 12,365,100 12,247,600 25,078,500

2011 22,126,200 25,714,400 48,256,000

2012(1-8) 18,403,100 19,973,500 38,894,900

Facts:

* China’s Port Storage Until August 2012

- From the Philippines : 11,720,000ton

- From Indonesia : 9,220,000ton

- Same as in 2011

* 15,750,00 ton stainless steel produced in

- China, about 43% of world production

* Cheapest stainless steel beneficial by NBM in China

* New Policy in Indonesia

- Tax increased 20% since May 6,2012.

- Allow to export products with Ni > 6%

since Jan. 1,2014.

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2 Lateritic Nickel Ore Trading in China

3 Lateritic Nickel OreTreating Technologies

Lateritic Nickel Ore Treating:

1 Leaching -- Hydrometallurgical

Acid Leaching, Bioleaching

High Pressure and Normal Pressure Leaching

High temperature and Normal temperature Leaching

2 Smelting – Pyrometallurgical

Ferro-Nickel

Nickel Matte

Nickel Base Material (NBM)

Nickel Pig-iron (NPI)

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3 Lateritic Nickel Ore Treating Technologies

Lateritic Nickel Ore Treating:

1 Leaching and Smelting Technologies:

- Existing many years.

- Existing in Many Countries -Plants at mine sites

2 Pyrometallurgical In China Far from mine sites

- Nickel Matte --- Blow-Blast Furnace

- Nickel Base Material (NBM) -- Electric (Arc) Furnace

- Nickel Pig-iron (NPI) --- Blast Furnace

3 NBM --- Good for 300 Series Stainless Steel

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Latest Widely Technology:

- RKEF—Rotary Kiln Electric Furnace

* Rotary Kiln ---130 m

* Furnace --- 33~76MVA

* Hot liquid fed to furnace

* Produce high NBM with Ni: 9~15%

- Blast Furnace:

* Produce medium NBM with Ni: 5~8%

* Limited by Government

(all depend on ore) 12 INSG Meeting

4 NBM Production in China

NBM Production:

Classes Year 2008 2009 2010 2011

Low NBM: Ni1-4%

Production （x 1,000 ton）

10.2 44.6 34.2 27.0

Persentage（%） 11.9 39.5 16.7 9.56

Medium NBM: Ni4-10%

Production （x 1,000 ton）

39.2 25.6 62.3 71.1

Persentage（%） 45.7 22.7 30.4 25.2

High NBM:

Ni≥10%

Production (x 1,000 ton)

36.4 42.7 108.2 184.3

Persentage（%） 42.4 37.8 52.9 65.3

Total （x 1,000 ton） 85.8 112.9 204.7 282.4

Note：In 2011, about 300,000ton of nickel metal

produced by smelting Lateritic nickel ore, ~ 70%

of Total production(465,000ton) in China. 13

4 NBM Production in China

-----Quality of NBM: No name

No inspection standards

No impurity requirement

Normal impurities (%):

C P S Si

2.5-3.5 0. 1—0.3 0.1-0.3 2.5—4.0

----- NBM Price:

~ 90% of LME Ni Price in 2009

~ 95% of LME Ni price in 2010

( ~105% in short period)

~ 100% of LME Ni price in 2011 14

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4 NBM Production in China

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4 NBM Production in China

NBM Production in China:

* Produce 1 ton of NBM by smelting 7 Dry ton

(~10 metric ton) of lateritic nickel ore.

* Depends on Fe content.

* No requirement of P, S, Si and Mg for Ore.

Capacity of NBM Production in China:

* By 2015, capacity will be 10,000,000ton of

NBM, ~ 1,000,000ton of Ni metal.

Capacity of Stainless Steel in China:

* Capacity will be 110,000,000ton by 2015. 16

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4 NBM Production in China

Water in Lateritic Nickel Ore:

Free moisture – 25%~40% (tested at 105ºC)

Fixed Water ---- 8%~10% (tested at 800ºC)

Normal non-ferrous metal trading condition:

FOB Price = F x LME x P x (1 – Moisture)

F = Factor for percentage of LME

P = Content of Ni in %

CFR Price = FOB Price + Freight

Trading in the Philippines and Indonesia:

CFR Price = [(F x LNE x P) + Freight ] x (1 – Moisture)

---- free water shipping cost paid by seller!!! 17

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5 SOME TOPICS IN THE INDUSTRY

Import Calculation:

Import statistics in metric ton

Import Ni = Σ (Mi x Pi x 0.7) in ton

Customs tax charge by price

( Official data)

Transportation with problems:

The International Maritime Organization (IMO)

Code of Safe Practice for Solid Bulk Cargoes

--- Rejection condition if moisture >35%

--- Some vessels are not controlled by IMO

Projects to reduce free moisture:

Cost, condition, …… 18

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5 SOME TOPICS IN THE INDUSTRY

5 Some Topics in the Industry

Import to China in 2012 is no related with 20% tax.

The amount from The Philippines affected by Iron Ore market!

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19

Month in 2012

The Philippines

Indonesia Total(ton)

Jan. 590,000 2,142,900 2,770,800

Feb. 654,200 2,641,700 3,371,200

Mar. 682,400 2,901,800 3,667,800

April 1,411,400 3,336,200 4,793,500

May 2,1420,000 4,050,000 6,550,000

June. 3,700,000 2,000,000 5,770,000

July 4,520,000 1,420,000 5,968,000

Aug. 4,419,000 1,481,000 6,003,000

Shipping cost (per metric ton):

Loading cost with barge: US$5.00

Ocean transportation cost: US$15.00 (Oct. in

2012). Highest ~US$59 in Oct. 2007

Discharge port charge: US$6.00

Transportation from port to smelting plant

* US$5.00 ~ US$20.00

Total cost: US$30.00 ~ US$45.00

Possibilities to build smelters in Indonesia:

Save shipping cost

Avoid IMO limitation

No Power---electricity and/or coke 20

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5 SOME TOPICS IN THE INDUSTRY

NBM good for stainless steel production:

NBM with Ni 6%~13% (<15%)

Good for 300 series stainless steel production

* Ni contents ~ 6%--9%:

* Examples: 1Cr18Ni5Mn8N or 0Cr21Ni6Mn9N

* if ore with Fe=13%, Ni=2.2%, then product

with ~85% of Fe and ~15% of Ni

* if ore with Fe=15%, Ni=2.0%, then product

with ~ 88%$ and ~11% of Ni

High recovery rate for Fe and Ni

(save resources of Fe and Ni)

No need to add iron for stainless steel production

(Save energy) 21

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5 SOME TOPICS IN THE INDUSTRY

NBM production cost( per metric ton):

Electricity cost: 35 ~ 45%

Ore cost: ~ 35%

Other cost: 25 ~ 30%

Selling price: ~ 100% of Ni price, Fe for free

Excess capacity of NBM production:

Ni price --- balanced by market

Supply of ore --- uncertain

Stainless steel industry --- Economy ?

Policies in China --- Limited 22

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5 SOME TOPICS IN THE INDUSTRY

APOL ---

Asian Pacific Organization for Lateritic-Nickel-Ore

An industry-based non-profit social organization

providing services to all the members in this industry.

Legal Registration Address:

Unit 2507, 25/F., COSCO Tower, Grand Millennium

Plaza, No.183 Queen’s Road Central, Hong Kong

Members:

--- Leading companies in this industry including smelters,

miners, inspection institutes, shippers, traders.

--- Over 200 members from 12 different countries.

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6 APOL INTRODUCTION

APOL Objective:

Concentrating the wisdom of all the members

Reducing disputes

Establish mutual trust and win-win situation

Set up a just, reasonable and fair trade standards.

APOL Tasks:

Absorbing participation of professional testing group

and agencies to establish an international trade organization, and to build a 'just, fair and easy to implement' industry standard.

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6 APOL INTRODUCTION

APOL Activities:

Organizing two Meetings per year

Setting up “Inspection Standard” both for “Lateritic Nickel Ore” and for NBM

Defining and Promoting special words for the industry

Promoting new smelting technologies

Building up bridges for members

Delivering full services for members

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6 APOL INTRODUCTION

Thank You !!

Email: glinw@yahoo.ca