Chinese tantalum and niobium market to rebound in Q3,2020

Asian Metal: Mr. He, thank you for taking the interview by Asian Metal. Could you please introduce your company in brief?

He: Guotai Group, a state-owned holding enterprise in Jiangxi province, was listed on the Shanghai stock exchange on November 11, 2016. It is mainly engaged in the production and sales of civil explosive equipment and the integration of blasting services. Currently, it has formed the development pattern of civil explosive equipment and rail transportation dual-core drive. In June 2018, Guotai group took a controlling stake in Jiangxi Tuohong New Materials Co., Ltd. by way of capital increase. In December 2019, Guotai Group acquired 95% of the equity of Jiangxi Sanshi Nonferrous Metal Co., Ltd., with an investment of 150 million yuan to reach the designed capacity. After Sanshi plant completion, Guotai Group, tantalum niobium plate will form its acquisitive new materials, Sanshi plant owns two production bases, an annual output of 1,500 tons of tantalum niobium compounds scale, total aims at becoming a larger capacity, production line more, variety is complete, the process equipment is advanced, environmental protection treatment is leading the domestic first-class tantalum niobium wet smelting enterprises.

Asian Metal: What are the main products of your company? What is the future of downstream applications?

He: At present, the main products of Jiangxi Tuohong New Materials Co., Ltd. are common niobium oxide, common tantalum oxide and potassium fluotantalate, which has the capacity to undertake such products as monolithite niobium oxide, ultra-fine niobium oxide and tantalum niobium mixture. Sanshi Nonferrous Metal Co., Ltd. is currently in the preparation stage, and is expected to put into trial production before the end of 2020. The products cover metallurgical grade, light-glass grade tantalum niobium oxide, medium and high-end potassium tantalate, etc., which can meet the needs of most tantalum niobium application fields. Tuohong New Material and Sanshi Nonferrous Metals will form a competitive development pattern with different positioning and complementary advantages, and form a variety of business models to meet the different business types and product needs of upstream suppliers and downstream customers.

Tantalum niobium hydrometallurgy products benefit from the rapid development of science and technology, expanding application areas, in addition to the traditional application fields remain relatively stable, in recent years in 5 g industrial chain, 3D printing, human bones medical, aerospace, semiconductor, such as new energy battery industry breakthrough, tantalum niobium metallurgical product demand is expected to continue to increase, promising prospects.

Asian Metal: Environmental protection has always been a major problem for tantalum-niobium smelters. What specific plans does the company have to solve this problem?

He: Firstly, we continue to increase the investment in environmental protection research. In recent years, our company has increased the research on recycling of the three wastes generated by tantalum and niobium hydrometallurgical process, and made breakthroughs in some key technologies of wastewater treatment.

Secondly, we also increase the investment in environmental protection. Last year, our company invested more than 3 million yuan in environmental protection facilities, and we plan to invest another 15 million yuan in environmental protection facilities in 2020 to solve environmental problems.

Asian Metal: Is the processing fee of potassium fluotantalate and niobium oxide increasing? What's the magnitude? Is it expected to continue to increase in the future?

He: Tuohong New Materials would transfer from the traditional processing to proprietary products, processing of the same business model. Subject to the continuous increase of raw and auxiliary materials, labor costs and environmental operation costs, smelting and processing costs continue to rise, the processing business profit is very thin, but the processing cost standard is determined by the market competition pattern, Tuohong New Materials processing cost standard follows the market situation.

Asian Metal: Since the beginning of this year, affected by the outbreak of the new coronavirus, factories in different places held back from resuming production. What measures does the company have to deal with this? Will the delayed production of most smelters discourage supply in the Chinese domestic market in the future?

He: The outbreak of the new coronavirus has a great impact on the current economy of China, and the resumption of work is generally delayed in various places. Our company also has the same problem of difficulty in resuming production. While doing a good job in the joint prevention and control of the epidemic situation, our company is actively creating conditions for the resumption of work. By the end of February, the factory had fully resumed production. The delayed start of most smelters in China has little impact on the supply of the domestic market, because the domestic tantalum and niobium smelting capacity is sufficient, the resumption of work can quickly meet the demand of downstream customers, there is no shortage of supply or problem.

Currently, novel coronavirus is spreading rapidly in the international market, and it is expected that it will be difficult to control effectively in the short term, bringing some uncertainty to the domestic and even the global tantalum and niobium market, mainly reflected in the possible disruption of the supply chain and the impact of supply and demand imbalance. The non-ferrous metal commodities futures showed a sharp fall in the short term is to will be coronavirus impact of a global outbreak of negative reaction, but tantalum niobium market belongs to a small metal industry, is still in the relatively low price, supply chain cost is high, at each end with 5 g industrial chain, etc to increase demand for tantalum niobium metallurgical products, and individual is expected to will be coronavirus outbreak hit, in the short term to bring certain tantalum niobium market uncertainty, but general control, the impact is limited, in the third quarter after the present landscape is becoming better and better.

Asian Metal: Would you like to introduce us your new plant in Xinyu?

He: Jiangxi Sanshi Nonferrous Metal Co., Ltd. is located in Xinyu, the national new energy science and technology city, started its construction in 2012. It has obtained various legal procedures such as environmental assessment, and hired a professional team to carry out high-standard design.

In order to accelerate the tantalum-niobium industry layout and expand the scale of tantalum-niobium hydrometallurgy, Guotai Group acquired 95% of the shares of Jiangxi Sanshi Nonferrous Metal Co., Ltd. in December 2019 and increased its capital and shares to complete the construction of Sanshi Nonferrous Metal project with an annual output of 1,000 tons of tantalum-niobium rare metal. Upon completion and production, the product varieties are expected to be extended to various specifications of high-purity oxides.

Asian Metal: What is the company's future development plan or the dominant product in the later period?

He: Guotai Group attaches great importance to the development of tantalum and niobium sector, continues to increase investment, increase investment in technical upgrading and environmental protection, to the domestic advanced enterprises, accelerate the development of short board. At the same time, we will introduce mixed ownership reform to Sanshi Nonferrous Metal and Tuohong New Materials, so as to form the shareholding structure of absolute state ownership, private capital, core management and technical backbone. We will give full play to the institutional advantages of state-owned enterprises, mobilize the enthusiasm of the management, realize the binding of core backbone interests, and implement a highly market-oriented operation mechanism.

Based on tantalum-niobium hydrometallurgical process, Guotai Group tantalum-niobium plate makes three stone nonferrous metals from a high starting point, and strives to achieve multi-specification and multi-variety coverage of tantalum-niobium hydrometallurgical products, so as to realize the competitive development pattern of Tuohong New Materials, Sanshi Nonferrous Metal differential positioning and complementary advantages.

Asian Metal: As the main tantalum-niobium smelter in the industry, facing the new challenges brought by environmental protection policies, do you have any specific plans to deal with them? Will China's tantalum-niobium industry face a new round of reshuffle?

He: China's environmental protection policy and environmental protection supervision are increasingly strict, forcing smelting enterprises to increase the investment in the research and development of environmental protection technology and environmental protection facilities in order to meet the standards, survive and develop.

As a state-owned listed company, Guotai Group attaches great importance to environmental protection investment, actively performs its social responsibilities, and strives to minimize the impact of smelting on the surrounding environment. At present, Tuohong New Material has made positive progress in environmental protection projects such as waste gas transformation and waste water treatment and resource utilization. After the transformation, Tuohong New Material will be put into use in the new Sanshi Nonferrous Metal plant, and will also exchange experience in the industry to jointly promote the development of tantalum and niobium smelting industry in China.

Asian metal: Thank you again for accepting the interview of Asian metal. Wish the company a thriving business!