Cui Feng: Enter nickel market when prices low and face new challenges with technological innovation

Asian Metal: Thank you for accepting this interview, Mr. Cui. As we all know, your company specializes in production and processing of cathode copper, copper products, gold and silver and is at the top of the industry. We learned that your company is planning to commence production of ferronickel and nickel cathodes. What is the reason that you set foot in nickel industry?

Cui: We come up with this idea mainly as we have successfully apply the “oxygen bottom blowing smelting of multi-metals” on production of copper, gold and silver. The “oxygen bottom blowing” technique is listed in Chinese national sci-tech support plan and draws high attention from the State Council. Through five years of operating and upgrading, the technique can be used to efficiently extract over ten elements like copper, gold, silver and nickel from soot and anode mud. It can be used to process complicated raw ores such as low grade and high grade copper ores, replacing cyanide process in extraction of gold and silver. Its comprehensive energy consumption is the lowest as the energy consumption in gold and silver smelting is only half of the global advanced level. The technique is also environment friendly as it results in zero emission when being used together with other techniques. The gold tycoon China National Gold Group and the global cooper giant CODELCO decide to use the technique to upgrade production procedures.

Based on the technical advantages and the metallic characters of nickel, we decide to apply the technique on nickel production.

Asian Metal: Would you like to introduce the plan of ferronickel and nickel cathodes smelting in the future?

Cui: We are still on experimental stage right now and the test results are ideal. We plan to use bottom blowing facilities to explore the new pattern of “sulfur producing and multi-metals gathering” and to realize production and application of nickel matte and nickel base materials.

Asian Metal: Many nickel producers suspended or reduced production in H1 of 2013 as the market kept sluggish. However, emerging nickel producers entered into the market and brought higher production capacity. What’s your opinion on it?

Cui: China still ranks the first in the world as to demand for copper, nickel, iron and other metals. As Chinese economy advances and people’s living standards upturn, consumption of these metals will continue to increase fast. But for nickel extraction, how to improve technical level and reduce production costs is the key to sustainable and sound development of enterprises and society.

Asian Metal: Stainless steel mills have purchased ferronickel actively since the price hike in nickel market. What’s the direction of ferronickel demand from stainless steel mills?

Cui: Demand for stainless steel will not cease to increase as Chinese economy grows vigorously. I believe stainless steel mills will show more demand for nickel.

Asian Metal: Shandong is a center of ferronickel smelting in China. What are positive factors attracting so many producers to establish plants here?

Cui: Ports. There are many ports in Rizhao and Qingdao. The raw material of nickel production is nickel sulfide ore, which is a non-renewable resource with limited reserves and is hard to mine. Currently, ferronickel producers mainly consume nickel oxide ore. It is also called lateritic-nickel ore which is typically found in Indonesia and the Philippines among Asian countries. Its content of nickel is relative low (1.5-2.5%). In order to reduce transport costs, producers of ferronickel prefer to establish plants in regions with ports.

Asian Metal: In addition to decreased production costs, attention is also paid to technological innovation. What is your consideration of technological innovation?

Cui: We will make exploration and experiments by utilizing available resources and technologies.

Asian Metal: When we met in Indonesia last month, you mentioned the plan to look for nickel resources overseas. As Indonesian export policy remains complicated and confusing, what will you do in lateritic-nickel ore market?

Cui: The export policy of Indonesia is understandable as they aim to boost economy and resolve employment problems, just like Congo forbidding oxidized ores export. I read a newspaper published by ethnic Chinese on the plane back from Indonesia and learned that some smelting plants with foreign investments in the country have export quotas, so we need not to worry about being unable to purchase nickel ore.

Asian Metal: Ferronickel market and lateritic-nickel ore market have seen some recovery recently, what do you think about the market development in Q4, 2013?

Cui: The market is always unpredictable and it will not follow personal willingness. What we can is to follow the market closely as the industry has been struggling in recent three years.

Asian Metal: Thank you again and may your company flourish!