Ted Dickson, TAK Industrial Mineral Consultancy. Global Refractory Markets as a market for bauxite and alumina

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1 Ted Dickson, TAK Industrial Mineral Consultancy Global Refractory Markets as a market for bauxite and alumina

2 Bauxite/Alumina Refractory Materials Calcined alumina Tabular alumina White fused alumina Brown fused alumina Calcined low iron bauxite Bauxitic clays and blends Others manufactured from these e.g. spinel, mullite, CAC

3 Aluminosilicate Refractories CALCINED CLAYS CLAY/BAUXITE BLENDS SILLIMANITE MINS B A U X I T E S A L U M I N A S

4 Total Refractories Market ~ 42 million tonnes ~65% in China Forecast Volume Growth Rates modest ~0-2% Primary Driver Crude Steel Production But Reducing Consumption per Tonne of Steel China >20 kg per tonne falling fast Japan, EU, North America 7-10 kg per tonne

5 ~ 2%pa growth to peak 2017: assumes China reaches target 15Kg refractories/tonne steel by 2018 Source Richard Flook, Shinagawa Refractoriesestimates

6 ~ 0% pa growth; China peak 2014: assumes China reaches target 15Kg refractories/tonne steel by 2016 Source Richard Flook, Sinagawa Refractories

7 World Refractories Market by tonnes Iron & Steel 70% Cement/Lime 7% Ceramics 6% Others 6% Non-ferrous metals 2-3% Glass 3-4% Chemicals 4%

8 Thousand Tonnes World Steel Production

9 Thousand Tonnes World Steel China Effect World Steel Production TOTAL WORLD China ROW

10 Refractory Trends Continuing move to higher quality refractories Lower quantities but higher performance refractories including high alumina based Fairly mature in advanced producers Lower uptake in China but rapid progression over next 3-5 years Target to reduce consumption in China to 15 kg per tonne of steel

11 Refractory types trends In-situ spinel in steel ladels Spinel or dolomite in cement kilns Move to low cement castables Reactive aluminas Higher alumina aggregates in monolithics Trend to greater use of monolithic Maturing in Japan/Europe/North America Developing China/India/ROW

12 Trend to higher quality Alumina consumption in refractories per tonne of steel kg per tonne EU, Japan, North America Chinese consumption of alumina per tonne of steel <0.5 kg per tonne of steel Changes in steelmaking practice also influence but many not possible without higher quality refractories

13 BAYER SOURCED ALUMINA DEMAND IN REFRACTORIES 1.7 MILLION TONNES Ceramic Fibres 10% Spinel/Mullite 5% CAC 9% Calcined Alumina 32% WFA 17% Tabular Alumina 27%

14 Bauxite based refractories Calcined Bauxite Primary sources China and Guyana Directly for refractories ~ 1.6 million tonnes 60-65% in China Brown Fused Alumina million tonnes used in refractories -- requiring ~ million tonnes calcined bauxite

15 Bauxite supply issues Bauxite few sources and Chinese control Great concern about adequate supplies 2008 Supply issues eased but no major new supply outside of China or Guyana Upturn in demand could raise further supply concerns Alternatives overlap in market At low alumina end calcined /bauxitic claysclays or andalusite At high aluminas end BFA Tabular/calcined/WFA

16 Alumina supply issues No major concerns on supply till 2017 Always concerns when metallurgical alumina demand gets tight For calcined grades most Bayer plants calcining at too low a temperature Long term security of supply and prices important to refractories companies and specialty alumina suppliers

17 Is there an alternative No refractory is irreplaceable If there is sufficient supply at reasonable prices the most cost effective material is used In a conservative industry changes tend to occur when supply is disrupted in some way Andalusite and clays replaced some of bauxite applications where there was some performance overlap and shortages of bauxite. In some instances magnesia, zircon or dolomite can be alternatives, all depends on performance and total cost for life of refractory, not just price.

18 Recycling There is growing emphasis on recycling Still quite limited Quality control getting better but still generally only used in non-critical applications Some chrome-alumina by-product from chromium metal manfacture effectively used in applications such as EAF roofs.