Asian Metal: Good day, Mr. Hua! Thank you very much for having the interview with Asian Metal. Could you please introduce about your company?

Hua: As the first steel and iron enterprise of Zijin Mining Group with capital reaching RMB10 billion in Altay, Altay, Sinkiang-based Jinhao Iron Co., Ltd.can realize annual sales revenue of over RMB13 billion after its steel and iron project with the production capacity of 3 million tons being put into operation. Supported by the abundant unique high quality iron resources and other resources in Fuyun county, the company takes the advantages of capital, talented personnels and management of Zijin Mining Group and produces 1.4 million tons of high-quality cast iron and 1.6 million tons of special high-quality steel through high-tech. Sticking to the ideals of “specificity of main business and verification of value chains” and supported by high-quality resources, our company tries to maximize the value of iron through the improvement of high-tech.

Asian Metal: Could you please talk about the market position of your company?

Hua: Our company amies at becoming a special steel production base with the shortest producing process, lowest costs and highest quality in domestic market as well as a high-quality cast iron production base with the largest production scale, highest quality and lowest costs in domestic market. With the enterprise mission of seeking welfare for employees, making contributions for society and taking responsibilities for our county, proposing the enterprise management ideal of people first and love and pious, we do our best to work out our enterprise culture of “enterprise venturing, people venturing” and make an active contribution to economy, society and culture development of our community.

Asian Metal: According to the current market condition, what is your expectation and judgment for the casting market in Q3 in Sinkiang?

Hua: The key point is still the domestic market in different regions as the casting market in Sinkiang is rather small. Operation rate in downstream market will remain low as it is the hot summer season in July. As a consequence, the weak end demand is unlikely to improve in the short-term. However, according to the announcement in the H1 of June by Chinese Iron and Steel Association (CISA), the daily crude steel output in the whole nation is 2.1563 million tons, up by 19,000 tons or 0.1% month-on-month, rebounding again after depreciation of two consecutive quaters. Steel mills are still inactive in reducing production and imbalance of supply and demand in the steel market will continue. The sluggish casting market is unlikely to improve as the overall steel market remains weak.

Asian Metal: We have visited the raw material zone of your company before visiting factory buildings. Where does your company mainly purchase coke and coking coal from? Is it Sinkiang?

Hua: Yes, it is. With vast territory and abundant resources, Sinkiang is rich in resources. More over, our company will take on more production costs if we purchase raw material from outside markets. As a consequence, all of our resources are mainly purchased from Sinkiang.

Asian Metal: As a high-end casting enterprise, how can you improve and solve the problem of transportation as the transportation system is not well in Sinkiang? Have you ever considered to build warehouses out of Sinkiang?

Hua: We mainly take trading companies as the bridge of communicating with clients out of Sinkiang.

Asian Metal: When will the phaseⅡof Jinhao Industry start?

Hua: We plan to start the phaseⅡ-coking plant plan-in 2014 with the capacity of about 1.2 million tons. We mainly purchase coking coal from Inner Mongolia and blending coking coal at Tuckerstan port, about 320 kilometers from Qinghe territory, closer to South Sinkiang.

Asian Metal: Could you please share with us about the outlook of raw material market in Q3 in Sinkiang?

Hua: Take iron ore fines and coke as examples, I think the market will struggle with decline in the near future. Currently, most Chinese steel mills are suffering from excessive production capacity with fewer purchasing interests. Iron ore price struggles with depreciation this year, so I think iron ore fines price is unlikely to rebound in Q3.

Asian Metal: Thank you again for having the interview with Asian Metal. We wish you successful work and flourishing business！