A look at the macro-drivers of the Chinese economy and the role graphite plays. A focus on how the government have restricted mining and minerals activities in the past and whether the same is on the horizon for flake and amorphous graphite supply.
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Industrial China in 2013 and Graphite's role - Simon Moores
1. Industrial China in 2013 and graphite’s role
China Graphite Field Trip & Briefing 2013
Simon Moores, Manager, Industrial Minerals Data – smoores@indmin.com
indmin.com/Data
5. • Growth <8% = norm
• China still a huge country in the midst of
industrialisation
• Net mineral consumer through major
industry:
• Steel
• Metals production (aluminium, copper, lead,
zinc)
• Fertilizer
• Drivers
• Infrastructure (Real estate, rail, roads,
airports)
• Cars
• Crop production
• All underpinned by population growth and
urbanisation (rise of the middle class)
1. China’s main drivers | Economy and mineral demand
GDP growth of major economies 2012‐2017
9. Pollution controls
• Blanket ban on all round/downdraft kilns, Shanxi
• Heavily polluting, inefficient
• Had to covert rotary kilns or go bust
• 75% of producers wiped out overnight
• Prices up 70%
2007 – Refractory‐grade bauxite
2009 – Flake Graphite, Inner Mongolia
2011 – Amorphous Graphite, Hunan
• Mine closures of older operations
• Pollution and demand grounds
• Government‐forced consolidation in
Lutang
• Coal and amorphous graphite industries
• 220 mines to 30 on pollution and
resource protection grounds
2. Macro changes to mining in China
2012 – Flake Graphite, Jixi, Heilongjiang
15. 3. Flake graphite changes in China
Policy changes in Shandong
• Formal notice service to Pingdu & Laixi on 30 October 2012
• Ban on any new graphite processing plants
• Environmental reasons = polluting of Pingtang River
• Environmental approval for every plant must be saught, those that fall foul will
have to cease operation
Real regulation or rhetoric?
Relocation of plants to Heilongjiang?
Nanshu Graphite plant, Shandong
18. 3. Flake graphite changes in China
Reserve challenges – Luobei and Jixi
Luobei
• North‐east, on border with Russia
• 636m. tonnes resources in 9km2 area
• 1/3rd of China’s graphite resources
Jixi
• 800m. Tonnes resources
• Mines in Jixi suspended by government in
mid‐2012
Rich resources of both Luobei and Jixi very
attractive to large Chinese corporations
22. 15 March 2013, Indonesia
• 3rd fastest growing economy in Asia
• Ban includes: bauxite, limestone, quartz, zeolite, feldspar, iron ore
“Ban will be strict with no exceptions”
Thamrin Latuconsina, Director of Export of Industrial and Mining
Products from the Ministry of Trade, Indonesia