Tantalum-niobium industry faces environmental protection policies with emphasis on waste slag treatment in 2021

Asian Metal: Hello，Mr. Zheng, thanks for taking the interview by Asian Metal. Please introduce the project progress of your company.

Mr. Zheng: In September 2017, in order to implement the government's purchase and storage plan for the company's original factory plots, and to realize the restructuring, transformation and upgrading of the enterprise and to meet new requirement of new environmental protection policy, the company carried out the relocation and upgrading project from Conghua, Guangzhou to Yingde, Qingyuan. Our project is in the list of Guangdong's key construction projects with a total investment of RMB1.02 billion and three phases of construction with high starting point and high standard to build the capacities from the ore treatment to tantalum and niobium oxide, and to metal products. We aim at becoming the most efficient enterprise with technology innovation, green development, scientific and safe environmental protection in the industry. In the past two years, the company made great effort to promote the construction of the project. Through unremitting efforts, the construction of the first phase of the project officially started on December 18, 2020, and is expected to be completed and put into operation in June 2022. After the project is completed and put into operation, it is expected to have annual operation revenue of about RMB1.3 billion and a ratal of about RMB70 million.

Asian Metal: As one of the veteran smelters in China, what are the improvements on production technology and facilities of the new plant compared with the old one?

Mr. Zheng: The project aims to build a tantalum-niobium smelting and processing demonstration enterprise in China, so we firmly establish the concept of green development, and absorb and introduce advanced and reliable technology and equipment from domestic and foreign industries for upgrading and transformation.In terms of technology, the original mature technological process of the company is further optimized, and the production process is more scientific and reasonable.In terms of equipment and equipment, the most advanced production equipment in the industry is widely used, with high degree of automation and intelligence, which will greatly improve the working environment, greatly increase production efficiency and product quality. Artificial cost of new plant expects to reduce by at least 50% from that of former plant. In terms of the treatment of “Three Wastes”, environmental protection measures should be developed in advance of high standards. Environmental protection measures account for 10% of the first-phase investment of the project, about more than 60 million yuan. Starting from the source, the three wastes shall be systematically classified and treated to realize the combination of high-standard emission and comprehensive recycling and utilization of resources, so as to ensure that the environmental protection meets the standard and the resource waste is turned into treasure, and the cost of daily environmental protection input will be greatly reduced.

Asian Metal: How much higher will the entry barrier for new tantalum-niobium smelters reach, given China's stricter environmental policies?

Mr. Zheng: Due to the stricter environmental protection policies, the increased access threshold is mainly reflected in the new requirements on the disposal of slag, Vocs, heavy metals, fluorine, ammonia nitrogen and other treatments, especially the disposal of slag has higher and more standardized requirements. The environmental protection investment for a new smelter would be 2-3 times more than that of the previous one.

Asian Metal: What is the new direction of environmental protection policy in Chinese tantalum-niobium industry in 2021?

Mr. Zheng: The disposal of waste slag and heavy metal elements has been a key issue in this year's environmental policy discussions. Previously, most smelters only handled stacking, and some even had no ability to deal with the waste slag. Once the future policy requires that "clearing out annual waste slag annually", it would bring new environmental issues to most domestic smelters. Smelters with waste processing ability can flexibly adjust production according to market conditions, while smelters without waste processing capacity need to comprehensively consider the market and new processing costs to arrange production. With the implementation and deepening of the concept of green development in China, the national efforts to environmental protection will be more and more strong, in line with the people's yearning for a better life, China's tantalum and niobium industry must and will inevitably embark on the road of green and sustainable development. One of the core competitiveness of our project lies in the high standard of environmental treatment and comprehensive recovery technology. After we start operation, the average operating rate could reach more than 80% with normal and stable production without much influence from new environmental protection policies.

Asian Metal: The demand from electronics industry increased slightly so far this year, while the aerospace industry remains sluggish. Do you think the demand in the downstream industry will improve next year?

Mr. Zheng: The COVID-19 epidemic ruined tantalum and niobium industry this year. However, with the attention paid to the epidemic and the success of vaccine research and development, the epidemic will gradually be effectively controlled. Meanwhile, the construction and application of 5G will accelerate the popularization, which will further boost the consumption growth of tantalum and niobium products. The demand from electronic industry would rise by around 5% in 2021 compared with that of 2020. We are confident that the tantalum-niobium market will gradually emerge from the downturn as the global economy returns to normality.

Asian Metal: Current tantalum prices increased slightly in the international market, do you think prices in H1, 2021 would continue to rise?

Mr. Zheng: In general, the prices would increase slightly in H1, 2021. On the one hand, the production and transportation of tantalum and niobium ore in the international market would be discouraged by COVID-19, and the supply of raw materials will continue to remain tight which supports tantalum prices to increase further. On the other hand, downstream industry demand would not improve in a short time which discourages tantalum prices to increase greatly. The overall demand for tantalum products would keep weak. Affected by COVID-19, the demand for tantalum in the field of high-temperature alloy in the aerospace industry will decrease, while the construction of 5G in China and the popularization of self-driving cars and electric cars will, to a certain extent, make up for the reduced total demand for tantalum products. Niobium product demand would remain relatively stable. We predict that the demand from special steel field in H1 will keep stable and rise slightly in H2. The current market changes are normal fluctuations, and the market trend in the first half of next year depends on the international epidemic control situation. Only the recovery of the global economic environment can drive the recovery of tantalum and niobium market. For domestic smelters in the tantalum and niobium industry, how to balance the cost of raw materials, establish a reasonable sales price and maintain normal operation will become an important task of production and operation in the first half of the year.

Asia Metals: What is the company's future development plan and special products?

Mr. Zheng: The construction of the company's new production line will take about one and a half years. The first phase of the project is mainly to improve the grade and output of the company's raw oxide, potassium fluotantalate, metal powder and other products. At the same time, we would increase the investment and development in the field of tantalum and niobium deep processing, strive to provide customers with high-quality tantalum and niobium series products, strengthen and expand the industrial chain, and improve the comprehensive competitiveness. On this basis, we would like to explore a variety of ways to further strengthen the cooperation with industry-related enterprises to achieve complementary advantages and mutual benefit. We will also actively explore the reform of enterprise management mechanism, establish a financing platform in the capital market as soon as possible, launch the listing work in good time, activate the development potential of enterprises, and make unremitting efforts towards the goal of creating an innovative tantalum-niobium production enterprise with distinctive features and strong competitiveness in the capital market.

Asia Metal: Thank you again for your exclusive interview with Asia Metal. Wish the company a prosperous business!