5th World Lead Conference 2013

SHEN YING BGRIMM Istanbul 20th Mar 2013

Main contents

 Development of China’s Lead Production  Driving forces of China’s lead industry  Forecast of China’s lead industry  Policies of China’s lead industry and impacts

BGRIMM – Beijing General Research Institute of Mining & Metallurgy

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Overview China’s Shares on Global Lead Industry % 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Lead Mine Production China

Ref ined Lead Production Ref ined Lead Consumption Other Countries

Data source: BGRIMM

BGRIMM – Beijing General Research Institute of Mining & Metallurgy

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Part 1 Development of China’s Lead Production

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China’s refined lead production kt-Pb 5,000

GR 18%

4,500

16%

4,000

14%

3,500

12%

3,000

10%

2,500 8%

2,000

Secondary Primary GR

6%

1,500 1,000

4%

500

2%

0

0% 2005

2006

2007

2008

2009

2010

2011

2012

71%

Data source: BGRIMM

 Total refined lead production: Av. GR +12%, reaching 4,725 kt in 2012.  Primary lead production: Av. GR +10%, reaching 3,361 kt in 2012  Secondary lead production: Av. GR +14 %, reaching 1,364 kt in 2012  Primary lead contributed majority of refined lead production. But proportion of secondary lead production was increasing. BGRIMM – Beijing General Research Institute of Mining & Metallurgy

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Major smelting processes of primary lead Bath smelting Flash smelting

Top-blowing smelting

Kivcet

SKS

Ausmelt/ISA

Kaldo Furnace

Concentrates are sprayed into the hot furnace hearth and oxidizing smelted under the suspension condition. Then it is reduced, settled and separated in the settling pond. Kivcet technology is a typical flash smelting.

Concentrates are directly charged into the boiled liquid of blast furnace. Bath smelting technologies include oxygen bottom-blowing.

Concentrates are directly charged into the boiled liquid of blast furnace. Bath smelting technologies include rich oxygen top-blowing— Ausmelt/ISA technology, .

Concentrates are directly charged into the boiled liquid of blast furnace. Bath smelting technologies include Kaldo furnace technology.

Zhuzhou Smelter, Jiangxi Copper

YuGuang, Chizhou Smelter, ShuiKouShan, and etc.

Chihong Zn-Ge Group, Yunnan Tin Group

Western Mining

Technology

Process

Domestic typical smelter

Flash/Bath

Bottom-blowing smelting

Data source: BGRIMM

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Breakdown of primary lead production by processes ► Industry structure will be more reasonable, and the advanced technologies will be promoted. Breakdown of Primary Lead Production by Technologies 100%

%

Advanced technologies

90% 80% 70%

SKS

60%

Kivcet

50%

Other advanced technologies

40%

Sinter + blast f urnace

30%

ISP

20%

Other Antiquated technologies

10% 0% 2006

2007

2008

2009

2010

2011

2012

2013(f ) 2014(f ) 2015(f )

Antiquated technologies

Data source: BGRIMM

 2006~2012:

Production proportion of advanced technologies increased to 65% in 2012 Production proportion from antiquated technologies declined to 35% in 2012

 Production proportion of SKS technology increased dramatically, and will keep increasing in the future. BGRIMM – Beijing General Research Institute of Mining & Metallurgy

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Major smelting processes of secondary lead Technology

Reverberatory furnace

Long/short kiln

SKS

Process

The Pb plate/grid/connectings and Pb paste are charged into the reverberatory furnace with reduction reagent (coal or coke) and flux (soda and iron filings) together. Secondary lead ingot or lead alloy is produced with different reduction conditions.

Application

Huaxin Group, Chunxing Group

One-stage process, is similar to reverberatory furnace process. Two-stage process, soft lead with low Sb content Hubei Jinyang, Hubei Chukai, Shanxi is produced through oxidation reaction in stage one, and Jitianli, Tianneng Group hard lead (Pb-Sb alloy) is produced through reduction reaction in stage two.

Pb paste and lead concentrate are blended and smelted in one furnace together.

Data source: BGRIMM

BGRIMM – Beijing General Research Institute of Mining & Metallurgy

Yuguang Group

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Breakdown of secondary lead production by processes % 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2006

2007

2008

Reverberatory

2009 SKS

2010

2011

2012

2013(f ) 2014(f ) 2015(f )

Others (short kiln, blast f urnace and etc.)

Data source: BGRIMM



Production from reverberatory accounted more than 60% in 2012, and will increase to 67% in 2015..

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Supply of China’s lead concentrate kt-Pb 4000

2005~2012

Net import of Pb concentrate Pb concentrate production

3500



Pb concentrate production:

Other Pb-containing 

3000



2500



Net import of Pb concentrate: 

2000

Av. GR + 10%, reaching 2,520 kt-Pb in 2012.



Av. GR+9%, reaching 1,003 kt-Pb in 2012.

1500

 1000

Domestic lead concentrate production contributed majority to total primary lead feeds supply.

500

0 2005

2006

2007

2008

2009

2010

2011

2012

Data source: BGRIMM * Other Pb-containing materials include Pb in imported bulk concentrates and Pb in Zn concentrates.

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Part 2 Driving Forces of China’s Lead Industry

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Growth of China’s economics GDP growth GR 14% 12% 10% 8% 6% GDP growth

4% 2% 0% 2005

2006

2007

2008

2009

2010

2011

2012

Data source: NBS

 GDP growth declined from 10.2% in 2005 to 7.8% in 2012.  GDP growth was slowing down, but still higher than other countries.  GDP growth is major driving force to promote China’s refined lead consumption. BGRIMM – Beijing General Research Institute of Mining & Metallurgy

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China’s refined lead consumption 6000

GR

kt-Pb

5000

25%

PbO, 13%

20%

Pb alloy and semis, 8%

4000 15% 3000

Pb salts, 5% Others 2%

10% 2000 5%

1000 0

Lead acid battery, 72%

0% 2005

2006

2007

2008

Consumption

2009

2010

2011

2012

GR

Data source: BGRIMM Data source: BGRIMM

 2005~2012: Av. GR +14%, reaching 4,779 kt in 2012.  The biggest lead consumer - lead acid battery - accounting for 72% of total lead consumption BGRIMM – Beijing General Research Institute of Mining & Metallurgy

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Lead acid battery production million kVAh

Lead Acid Battery Production

GR

200

30%

Telecom 7%

180 25%

160

Motorcycle, 6% Electricity, 3% Railway, 3%

140

E-bike 30%

20%

120

UPS, 2% Others, 2%

100

15%

80 10%

60 40

Auto 47%

5%

20 0

0% 2005

2006

2007

2008

Production

2009

2010

2011

2012

Annual growth rate

Data source: China Battery Industry Association, BGRIMM

Data source: BGRIMM



2005~2012: Av. GR +16%, reaching 174.9 million kVAh in 2012.



Auto and e-bike are two major users of lead acid battery, accounting for 47% and 30% respectively.

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Auto, E-bike and motorcycle production M units 35

GR 70% 60%

30

50% 25

40%

20

30%

15

20% 10%

10

0% 5

-10%

0 2005 Auto Production

2006 2007 E-bike Production

2008 2009 Motorcycle Production

2010 Auto GR

-20% 2011 2012 E-bike GR Motorcycle GR

Data source: BGRIMM

 Auto production:

 E-bike production:

 Av. GR + 15%,  reaching 19.3 M units in 2012..

BGRIMM – Beijing General Research Institute of Mining & Metallurgy

 Av. GR + 16%,  reaching 32.5 M units in 2012.

 Motorcycle production:  Av. GR + 5%,  reaching 23.6 M units in 2012.

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Auto, E-bike and motorcycle population M units

GR

250

80% 70%

200 60% 50%

150

40% 100

30% 20%

50 10% 0

0% 2005 Auto Population

2006

2007

E-bike Population

2008

2009

Motorcycle Population

2010 Auto GR

2011 E-bike GR

2012 Motorcycle GR

Data source: BGRIMM

Auto population:  Av. GR + 21%  reaching 120.9 M units in 2012.

E-bike population:

Motorcycle population:

 Av. GR + 36%  reaching 195.4 M units in 2012.

 Av. GR + 6 %  reaching 116.0 M units in 2012.

Huge population will support production of replacement batteries. BGRIMM – Beijing General Research Institute of Mining & Metallurgy

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Telecom industry Million channels

GR

Base station facilities production 2005~2012

120

120%

100

100% 80%

80

60% 60 40% 40

20%

20

0%

0

-20% 2005

2006

2007

2008

2009

2010

2011

Base station f acilities f or mobile communication

2012 GR

Data source: BGRIMM

 Base station facilities production: Av. GR + 52%, reaching 117.8 M channels in 2012, due to following reasons, 1) The construction of 3G and 4G equipments 2) High requirements for admittance, high industry concentration BGRIMM – Beijing General Research Institute of Mining & Metallurgy

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Renewal energy industry Installation Capacity of Renewal Energy Industry 2005~2012 GW 50

GR 800%

45

700%

40 600% 35 500%

30 25

400%

20

300%

15 200% 10 100%

5 0

0% 2005

2006 Wind power

2007

2008

2009

PV power

2010 Wind power

2011

2012 PV power

Data source: NBS, China Battery Industry Association, BGRIMM

 Wind power: Av. GR + 37.1%, reaching 40 GW in 2012.  PV power: Av. GR + 127%, reaching 4.5 GW in 2012. BGRIMM – Beijing General Research Institute of Mining & Metallurgy

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Part 3 Forecast of China’s Lead Industry

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Development trend of China’s economics

Major targets for “12nd Five-year Plan of China’s National Economics”:  1 GDP growth Av. GR + 7%- higher than other countries  2 A resource-saving, environment-friendly society  3 Promoting social construction

Stable GDP growth will ensure China’s lead consumption growth in the coming years.

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Development trend of lead end users Lead Acid Battery Consumption by Battery Type

2013(f)~2015(f):

million kVAh 90

 Due to high population, Auto, E-bike and Motorcycle batteries will keep stable at the average annual rates of 13%, 10 %, 7% respectively.

80 70 60

 The new round development of 4G will stimulate telecom industry to grow at an average annual rate of 11%.

50 40 30

 Lead acid battery for energy storage is expected to keep an annual average growth rate of 22%.

20 10 0 2005

2007

2009

Auto battery Motorcycle battery Energy storage

2011

2013(f )

2015(f )

EB battery Telecom battery

Data source: BGRIMM

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Development trend of refined lead production

 Total refined lead production during 2013~2015: Av. GR +11%, reaching

6,940 kt in 2015.  18 primary lead smelting expansion projects with 894 kt/a new capacity

during 2013~2015.  18 secondary lead smelting expansion projects with 1,367 kt/a new

capacity during 2013~2015.  Percentage of primary lead will decrease from 71% in 2012 to 63% in

2015, and reliance on imported concentrate will be relived.

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Development trend of lead concentrate supply

 Lead concentrate production during 2013~2015: Av. GR +8.1%,

reaching 3,390 kt in 2015.  28 lead mine expansion projects with 198.8 kt-Pb/a new capacity

during 2013~2015.  Lead concentrate import will decline by 19% in 2013, and stay during

8500-1000 kt during 2014~2015.

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Part 4 Policies of China’s Lead Industry and Impacts

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12nd five-year plan of non-ferrous metals industry 1. Mining capacity will increase by 2,300kt-Pb&Zn /yr by 2015 

To promote domestic concentrate production, decline demand for imported lead concentrate, and increase concentrate supply to domestic refined lead smelters

2. Refined lead production will increase by 5.2% YoY between 2011 and 2015 

More smelters that adopted advanced smelting technologies will commission.

3. Refined lead consumption will reach 6.2 million tons, increasing by 7.9% YoY between 2011 and 2015. 

It will promote increase of refined lead production.

4. The proportion of secondary lead production - 40% in 2015 

Secondary lead production will increase faster than primary lead, which will decline the demand for concentrate.

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Admittance rule of lead and zinc industry 

The location of the new lead smelter: more than 1km far away from the residential area.



Capacity of new /upgraded lead smelting projects: no less 50 kt/a (independent smelting furnace).



Oxygen-rich top-blowing smelting technology and oxygen-rich bottom-blowing smelting technology are encouraged.



Current simple blast furnace, sinter pot should be rejected.



New sinter machine & blast furnace projects can not be approved.

Impacts 

The antiquated lead smelting process will be eliminated. The advanced technology such as SKS process will be promoted.

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Admittance rule of secondary lead industry 

The location of the secondary lead plants: more than 1km far away from the residential area.



Capacity of new lead recycling projects: no less than 50 kt/a



Capacity of current lead recycling plants: no less than 30 kt/a



The used lead acid battery should be crushed and separated mechanically.



Short kiln or other advanced lead recycling processes should be adopted. New reverberatory furnace project fueled by coal directly is forbidden. Secondary lead smelting process by crucible is forbidden.

Impacts 

The antiquated secondary lead smelting process will be eliminated. The advanced technology such as short kiln process will be promoted.

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Policies of eliminating antiquated smelting capacity  The Guidelines for Energy-Saving and Emission-Reduction in Non-Ferrous Metal

Industry –During the 12nd five-Year Plan period, 1,300kt/a antiquated lead smelting capacity (including secondary smelting) should be rejected.  “List of Eliminated Antiquated Lead Smelting Capacity”: 661 kt eliminated lead

smelting capacity in 2011，1,172 kt eliminated lead smelting capacity in 2012.

Impacts  Improve lead industrial pattern, increase capacity utilization 

It is expected China’s lead smelting capacity will increase from 7,862 in 2012 to 9,229 kt/a in 2015, but capacity utilization will lift from 60% in 2012 to 70% in 2015.

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Conclusion 

China’s lead concentrate supply   



China’s refined lead production  





China’s refined lead production grew by 12% averagely annually between 2005 and 2012. 2013~2015 ，China’s refined lead production will increase by 11% averagely annually, promoted by secondary lead mainly. Percentage of primary lead will decrease from 71% in 2012 to 63% in 2015, which will decline the demand for imported concentrate.

China’s refined lead consumption  



China’s lead supply grew by 10% averagely annually between 2005 and 2012. 28 lead mine expansion projects will stimulate lead concentrate production to grow by 8 % during 2013 to 2015. Reliance on imported concentrate is declining. Lead concentrate import will decline by 19% in 2013, and stay during 8500-1000 kt during 2014~2015.

GDP growth target: 7% 2013~2015，China’s lead consumption will grow by 11% averagely annually, driven by lead acid batter industry mainly.

Policies：  

The focus of lead industry policies: environmental protection The purpose of policies is not to restrict growth of lead industry, but to improve lead industrial pattern and increase capacity utilization.

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Thanks for your attention! Contacts: Shen Ying Beijing General Research Institute of Mining & Metallurgy Email: [email protected] Tel: 86-10-6329 9853 Fax: 86-10-6329 9744

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