First graphite mine in Gansu to operate

Asian Metal: Would you please introduce your company firstly?

Mr. Guo: Established on July 1, 2016, Jinyuanquan Mining Co., Ltd. is located in Shibaocheng, Subei Mongolia Autonomous County, Jiuquan City, Gansu Province with the registered capital of RMB50 million (USD7.53 million). Our company, mainly engaged in the mining and processing of high-purity graphite flake, has a professional team, advanced equipment and production process, and 48 employees, 13 of whom are technical management staffs with intermediate-and-high-level titles.

Our company relies on rich mineral resources in Subei County and mainly works on beneficiation and processing of high-purity graphite flake, through which we promote the development of local economy. We adhere to the management concept of quality first and client first.

We strive to enhance our core competitiveness with our company culture to build a favorable social image in the development. We will devote ourselves to making China's graphite industry brilliant.

Asian Metal: What's the current situation of the graphite mine?

Mr. Guo: We have our own graphite mine which can be exploited for ten years after we got the mining license in February 2017 when we invested RMB200 million (USD30.11 million) in constructing the graphite processing and production project with a handling capacity of 500tpd of raw ore. The project has been filed in Subei Development and Reform Bureau. Covering an area of over 10,000 square meters, the graphite processing plant, with a processing capacity of 10,000tpy of refined graphite flake powder C96% after the completion of the construction, expects to achieve sales revenue of RMB100 million (USD15.06 million) and tax of RMB25 million (USD3.76 million) per year. Jinyuanquan Mining, a large modern company integrating mining, beneficiation and deep processing, will emerge then. The phase II of refined graphite powder deep processing project is under preparation now.

Asian Metal: When will your company conduct massive graphite production and what's your plan for future production?

Mr. Guo: We have been debugging production lines from May, which takes a longer time due to large output. We plan to perform massive production in late July and will turn out about 60,000-100,000tpy of graphite in the future. We aim to produce high-quality graphite flake to supply excellent enterprises from all walks of life which need the material, and build a bright future with them. We will also add high-end production processes for spherical graphite, etc.

Asian Metal: What are the advantages and disadvantages of your company's graphite flake business?

Mr. Guo: We maintain stable output and provide good service and high-quality products, from whom downstream customers can receive steady, reliable and long-term supply. We have self-supply graphite mine which can ensure raw material supply. These are our advantages.

We have no regular clients and might encounter problems in expanding business. These are our disadvantages.

Asian Metal: In your opinion, how China's graphite output will change in 2018?

Mr. Guo: As far as I'm concerned, Chinese graphite beneficiation plants expand capacity this year, so the output would maintain the upward trend unless these plants are affected by national policies or eliminated in competitions.

Asian Metal: Graphite prices kept rising in 2017, so do you think whether prices will continue to go up or not this year?

Mr. Guo: Prices for graphite flake moved up in 2017 mainly because of environmental inspections. Downstream buyers will not make purchases blindly, thus prices are hard to increase. In addition, the demand for the material weakens due to sluggish end market, leading to continuously decreasing prices. Therefore, transaction prices for graphite flake keep dropping from early this year and might reduce further in the future if there are no important events.

Asian Metal: What are the main reasons for wide price gap of graphite flake between Shandong and Northeast China? Which price will your company prefer to refer to when setting a price?

Mr. Guo: The first reason is the distance. The output of graphite produced in Shandong is limited, so the transport cost increases when the delivery is made from Jixi. On the other hand, transaction prices for graphite in Shandong are relatively high as the material is refined with most exported; however, producers in Northeast China generally conduct beneficiation directly with limited refined graphite, most of which is sold in the Chinese market, thus transaction prices are relatively low. We set our price according to the market situation and refer to prices of large beneficiation companies in China.

Asian Metal: With more active mining of graphite flake ores in overseas market, a small quantity of graphite flake ores enter the Chinese market now. So in your opinion, what measures will Chinese graphite plants take?

Mr. Guo: People paid more attention to graphite ores in overseas market and some companies have gone to Africa and other places to exploit the material. Furious market competition will emerge in China with the imports of overseas graphite ores in the future, leading to price war. However, transportation of overseas graphite ores is a problem, so downstream customers should consider whether the stable supply could be ensured or not. We should concentrate on perfecting our products and win with high-quality products and service to cope with shifting events.

Asian Metal: Thank you for accepting our interview. Wish your company a bright future!