Asian Metal: Could you indicate the importance of being a vertically integrated producer of antimony products?

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Emin: The importance of vertical integration cannot be understated in these times in order to ensure the stability of supply. The importance of being vertically integrated has been highlighted in recent weeks with the implementation of state interventionist policies of the Chinese government to in effect remove the approximately 11,000-12,000 tons from global market. Ten days ago the Chinese State Reserve purchased approximately 7000-8000 tons of antimony ingot from Chinese suppliers, and that can be considered to be the export market. However, at the same time production at Beaver Brook mine, owned by Hunan Nonferrous Metals, itself owned by China Minmetals Corporation, a state owned company, has been suspended. Both employees and management were extremely shocked by the decision considering that the mine was extremely profitable. If you then consider conversion volume at full capacity into ingot the volume of material effectively taken out of the market represents around 12,000 tons of antimony ingot, equating to approximately 9% of global output, an extremely worrying trend that highlights the importance of vertical integration in terms of ensuring the stability of supply.

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Additionally being vertically integrated allows us to ensure compliance, which is exceptionally important for customers globally. It is of upmost importance and they always ask is it clean? Is it from a certified facility up to specific standards? Was it smuggled? And how long do you think you can supply me? Hopefully by being vertically integrated we can provide assurance to our customers on all these fronts.

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Asian Metal: Union Group has also committed $30 million working capital for additional antimony concentrate feed. Is your recent technical collaboration in Myanmar considered to be one of the potential sources of feed stock?

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Emin: In short yes, this is a potential source of feedstock and there is potential for a takeoff agreement that is to be arranged at a later date. Myanmar is one of the largest single country producers of antimony that export to China and since its political isolation has been de-thawing we have had a number of inquiries and hence this joint venture with a very smart team that are well connected and are looking forward to a prosperous relationship. Fundamentally, Myanmar is one of the most attractive and untapped mineral rich provinces in the world. There is a huge right-lateral shear, a collision of the Cathy and Indian plates, with a rich in a diverse metal base.

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There are a huge number of antimony projects that we feel are exciting, but the country also has a huge number of other minerals. Nature has in a way been very kind and there is a reason why we are seeing major nations and major corporations pilling in as of late. I don’t think people are expecting to see huge sweeping change all at once and it will take a long time for the nation to rebuild and open itself up to private investment.

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The country produced around 14,000 tons of antimony of antimony ore in 2011, sold almost entirely to China, making it one of the largest single country sources of antimony raw material to China. So for us to have a joint venture with RDP Singapore Limited is extremely important to us.

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There are a large number of other sources of feed for the roaster being considered, including once operating mines which were forced close when prices collapsed to unsustainable levels in the 1980’s-1990’s. Mining antimony outside of China became unviable as a seemingly never ending supply of antimony being exported from Hunan. Some survived, such as Cons Murch, but the majority, such as Hillgrove, Beaver Brook and Lake George were forced to close. However, China is now the biggest consumer of antimony and as such China has begun to exert greater control of its exports in an attempt to reduce future supply risk and for the benefit of the economy as a whole, which has driven prices to a level that is viable for a number of these closed mines to come back online.

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Asian Metal: What is the development stage of the antimony roaster in the UAE? Is there a minimum antimony price needed to support the project economically?

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Emin: The 10 year NPV for the roaster is estimated as $241.5 million for the roaster alone, based on quite high discount rates based on prices around USD13,000/t, which we consider a conservative estimate with prices for antimony products expected to rise in the coming years. The progress of the roaster is the most important piece of information and whilst I cannot give specific details, it is progressing well and financing for our project is extremely robust. Whilst financing in these turbulent times is not the easiest of tasks, I think people recognise the importance of the metal, and this project, which is expected to be in a supply deficit in coming years.

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Asian Metal: Initially will you be able to produce antimony regulus and trioxide, or will the facility be modified at later date to produce antimony trioxide?

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Emin: The facility is designed to produce both antimony ingot (European standard grade 1 & 2) and trioxide produced from ingot, which is a much better way to produce antimony trioxide. If solvent extraction and hydrolysis are used, to produce from antimony concentrate to antimony trioxide, then significant problems arise, not just in terms of chemical composition but in its physical characteristics. Only by producing via crystalline metal is the micron size, shape and population curve suitable for the majority of downstream applications. There are those who have attempted to produce directly from high purity antimony concentrate, such as Hillgrove in Australia, attempting to avoid the roaster stage but unfortunately the technology is not there yet.

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Asian Metal: Is there a worry that the price rises, it could lead to consumers being forced into looking at alternatives to using antimony?

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Emin: Whilst there are some alternatives, such as inorganic flame retardants, if there was a significant shift in to an alternative then this would likely result in higher prices for that respective component. Additionally, there are simply no effective alternative and while a variety of alternatives have been tried before, there is always an associated problem. Furthermore, often the cost of antimony trioxide represents only a marginal proportion of the total cost of the final product.

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Asian Metal: What are the plans and expectations for the next 6 months?

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Emin: The roaster is very well advanced and we have excellent partners in the UAE who understand the importance of the project and who believe in the project. However, the primary focus is to ensure that progress with the roaster is on the fast track, and while securing funding in a timely fashion is essential there are other considerations that need to be taken into considerations, such as staff and training, and these are considerations that are being organised at present.

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Asian Metal: I was wondering if we could shift the focus to your thoughts on the antimony market at present? What is your expectation for the future market and what do you believe will be a driver of growth?

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Emin: Antimony only just about makes it as a metal on the periodic table and as such has exceptionally unusual electrical and chemical characteristics, with that last electron on its shell. It is pretty unique in it physical and chemical characteristics and the world has so far tapped in to a couple of them. Liquid Metal Batteries, a low cost and long lifespan battery for grid-scale stationary energy storage, is just another and I wouldn’t be surprised to see it in a greater number of downstream products in the future.

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If you look at the relationship between mineral price and its crustal abundance across a number of minerals, you can see that antimony is priced below where it should be. Antimony is far more ubiquitous and is extremely difficult to recycle, following the trioxide market, combined with much better growth dynamics and significant supply issues, and yet it is still 4-5 times lower per unit price than other minor metal peer groups with a similar crustal abundance. When there was a small deficit in 2006, after the cessation of output from some mines in China, it didn’t last long and we haven’t yet had a significant deficit. Based on various forecasts, consumption of antimony is expected to grow by at least 4% per annum through to 2016, whilst Chinese production is unlikely to increase significantly in coming years and is more likely to face more stringent export controls. And although there may be marginal increases from existing producers, a supply deficit is predicted by 2016 and prices are forecasted to increase 30-40% from today’s price levels. Another trend that is possible is that if prices continue on an upward trend through to 2016 we would more than likely see a number of old antimony mines recommence production.

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Asian Metal: Is there anything you would like to add?

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Emin: We have always had faith in the importance of antimony and that it would one day experience a resurgence allowing Western companies to compete. We believe that we can produce antimony products that are clean, produced in an EU certified facility, from a feed stock that has providence and that all duties and taxes have been paid. We want to be there for customers and to provide reliable supply of an extremely high quality antimony ingot and low lead antimony trioxide for customers for many years to come.

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We are already arranging agreements to secure supply from antimony deposits for the next generation and are developing technical collaborations around the world which are not public yet. We are looking for future deposits that in ten years we see will be feeding our facility that no one is looking at now, in order to keep the roaster going at year 2020.

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