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Refractories: Adaptation in a traditional end-user industry Christoph Frey

Magnezit Magnezit Group Europe GmbH Dalgraphite

Magnezit Group. 2012 2

Introduction of Magnezit

Some words on Refractories

Usage of Graphite in Refractories

1.

2. Grades and Properties of Graphite for Refractories

Cooperation between Buyers and Suppliers 3.

4. Vertical Integration: Introduction of Dalgraphite

Dependency of Refractories on Steel Production

Table of content

Magnezit Group. 2014 3

Mining Production Engineering Service

cement and lime industry oil refining

glass production construction materials

Customer industries

metallurgy

Magnezit Group is an integrated company ensuring complete cycle of production and sales of refractory raw materials and products.

Key data Magnezit Group

Performance

70%

Share on the market of magnesia refractories

Russia

Annual production volume

СIS 67%

mln ton 1,5-1,6

Accrued investments for

modernization & development

bln roubles 18,5

4 Magnezit Group. 2014

» Branch of Magnezit Group in Razdolinsk town 120 thousand tons, 540 people

RUSSIA

Satka production site

» Magnezit Group

» Коmbinat Magnezit

» Magnezit-torkret-masses

» NPK Magnezit

» Маgnezit Montazh Service

1,233 mln tons, 7150 people

Lower Angara production site

Industrial core and the largest production site of Magnezit Group, which has more than a century-long history of activity. Today the project for increasing capacity of the Complex for production of dead burned magnesia clinkers is realized at the site.

Modern industrial complex for the production of refractory materials with MgO content not less than 97%, built in close proximity to high-quality magnesite deposits

Moscow Saint Petersburg Chelyabinsk Magnitogorsk Satka Yekaterinburg Novokuznetsk Nizhniy Tagil Orsk

Representative offices of Magnezit Group

Nizhny Novgorod Taganrog Krasnoyarsk Ukraine Kazakhstan Poland Slovakia China Germany

EUROPE

» Slovmag A.S. 150 thousand tons, 572 people

» Panteleymonovka Refractory Plant 76 thousand tons, 270 people

The largest producer of refractory materials in Eastern Europe

One of the largest refractory plants in Ukraine. A new strategy for qualitative growth, aimed at modernization of production and manufacturing of novel called-for products of higher degree of treatment is implemented at the plant.

CHINA

» Liaoning Dalmond Refractories 100 thousand tons, by the year 2015

production capacity will have surpassed 200 thousand tons, 369 people

» Wuxi Nanfang Dalmond Refractories 5 thousand tons, 86 people

Modern innovative enterprise specializing in the production of refractory materials for continuous casting of steel

The most modern and the largest enterprise of Magnezit Group in China, ensuring flexible production of full range of oxide-carbon refractories based on the best innovative technologies

Magnezit Group in the world

4 15 14 deposits production sites representative offices in

Russia and abroad carry out sales and service

UKRAINE Lubenik Koshitce

Taganrog

Moscow

Saint-Petersbourg

POLAND SLOVAKIA

GERMANY

Yekaterinbourg

KAZAKHSTAN

Magnitogorsk

Orsk

RUSSIA

CHINA

Novokuznetsk

Razdolinsk

Yingkou

Yixing

We hold customs in high esteem. We bring the most perfect knowledge to every country where we conduct a business.

Magnezit Group in the world

UKRAINE Ratingen

Nizhniy Tagil

Kyshtym

Chelyabinsk

Satka

Gorlovka

7 operating countries

Nizhny Novgorod

Pavlodar

Krasnoyarsk


6

General definition of Refractories: Products which are used whenever high temperature (600 – >2,000 C) exists, mainly in the basic materials industry

Magnezit Group. 2014

Graphite in Refractories

» Above 50% of the natural flake graphite production is consumed for production of refractories.

Data Source: own research

Refractories

313,000

tons

other

Applications

285,000

tons

Importance of Refractories to the Flake Graphite Industry

Refractories

40 Mio tons

Graphite

0,3 Mio tons

Share of Graphite in the Refractory Industry

» The share of graphite as raw material in the refractory industry is below 1 %.

» Graphite is a small, but very important raw material for refractories.

7

Classification of Refractories

1. Nature of raw material 2. Type of form

a) Bricks / Shapes (60%)

b) Monolithics (40%)

a) basic raw material Magnezite, Dolomite, Chromite, … b) acidic/neutral raw material Silica, Aluminum-Silicates, …


Acidic Monolithics;

28%

Acidic Bricks; 17%

Basic Monolithics ;

12%

Basic Bricks ; 23%

Specialities; 20%

8

Refractory markets by type

Data Source: IM 2013


Usage of Graphite in Refractories

Graphite

» Graphite is used only in a limited range of refractories, but in many types of refractory products

» The most important graphite bearing refractory product are the MgO-C bricks,

as they are widely used in the steel industry

9

Usage of Graphite in Refractory Bricks

steel ladle

BOF

Magnesia Carbon Bricks (MgO-C) and

Magnesia Dolomite Carbon Bricks (CaO–MgO–C) mainly for steel industry: wear lining for - basic oxygen furnace - electric arc furnaces - steel casting ladles - … and in functional products: - purging and tap-hole bricks - …


Carbon Containing Non Basic Materials Alumina Magnesia Carbon Bricks (AMC) mainly for steel industry : - for lower part of steel ladles,

excellent service life due to lower tendency to spall (compared to MgO-C bricks)

Typical type

of Graphite

Flake Graphite:

С 86 – 99%,

(mainly 90-95%C)

-100…+50 mesh

Flake Graphite

С 92 – 94%

-100 mesh

Carbon Content (without SiC)

3-18% C ∅ 𝟏𝟎%

3-10% C

Isostatically pressed functional parts for steel making Al2O3-C, ZrO2-C, MgO-C based - mainly for continuous casting - ladle shrouds, monobloc stopper,

submerged nozzles central role in steel making; heavy duty parts

10

Graphite and Carbon bricks Usually precursors like PET-Coke, Anthracite, Coke or Synthetic Graphite are used. Natural Graphite is insignificant for this application

Crucibles

functional parts in a tundish

Usage of Graphite in Specialities


Graphite containing crucibles - for light metals (aluminum and aluminum alloys) and non-ferrous metals (copper). Also for zinc distillation and melting of cast iron

Unshaped refractories - Carbon bonded mixes - used as ramming mixes and e.g.

as cold- or warm-flowing casting mixes for filling joints or to repair areas with premature wear in converters, ladles, tap hole clays…

Typical Graphite

Flake Graphite:

С 90 – 99%,

-100 …+50 mesh

(mainly coarse flakes)

Flake Graphite

С 85 – 96%

> 100 mesh

Flake Graphite

С 85 – 94%

> 100 mesh

Carbon Content

5 – 50%C

25 - 50% C

3-10% C

11

MgO-C brick

1

Installation of MgO-C bricks

2

Using of MgO-C bricks

3

MgO-C bricks after using 4

Carbon-containing Refractories

Oxide-Carbon Refractories in Macro-pictures


MgO-C bricks in plastic packing

12

Oxide-Carbon Refractories in Micro-pictures

Microphotography of MgO-C bricks (transmitted light)

Microphotography of Al2O3-MgO-C bricks (reflected light)

Carbon-containing Refractories


13

Tasks graphite has to fulfill in carbon containing refractory materials

» Thermal homogenization of the refractory material used

» Strengthen the resistance against liquid metals and slags

» Reduction of infiltration of foreign matters (slag/metals)

» Reduction of corrosion caused by infiltrated foreign matters

» Increase the absorption of tension in the brick

» Strengthen thermal shock resistance

» Strengthen the brick flexibility

» Reduction of thermal expansion

Tasks of Graphite in Refractories


14

Graphite needs

1. to be easy workable in the brick workshop

2. to have excellent performance in the refractory application

Desired Properties of Graphite in Refractories


Desired Properties of Flake Graphite

» Well-balanced grading

» Good oxidation resistance

» Suitable chemical composition of the ash

» Low volatiles / sulphur content

» Low alkaline content

How can buyers work with suppliers to improve product quality and meet higher manufacturing standards?

» Buyers must be clear on their requirements regarding Graphite characteristics

» Buyers need to specify the requirements not only concerning product quality, but

also concerning packaging standards, quality inspection, documentation…

» These specification need to be shared with suppliers. Suppliers have to check

possibilities to match the requirements and improve accordingly – if possible!

Note: Graphite companies have limited possibilities to change the chemical and physical properties of the graphite, but e.g. oxidation behavior can be modified in certain ranges by modification of the particle size distribution. It is desirable to form research and development cooperation, to develop most suitable

grades for specific applications.

15

Cooperation between Buyers and Suppliers


Conclusions: 2/3 of the refractory products are used for the iron and steel industry The dependency of the refractory industry on the steel market is high As graphite is mainly used in the iron and steel refractories, also the demand for flake graphite depends a lot on the production level of steel. For the steel production refractories are consumables and therefore proportional to the steel production, but the consumption was reduced due to optimization…..

16

Poor steel industry performance and its effect on refractory product demand

• Ensuring graphite supply through vertical integration

usage specific refractory consumption

per ton of product

[kg/ton]

Year 1955 1998 2005

iron and steel industry 69 67 65 19 15

non-ferrous metall industry 2 3 13 7 8

glass industry 3 3 15 5 5

cement and lime industry 7 10 1 1 1

ceramics, chemistry, others 19 17



17

Poor steel industry performance and its effect on refractory product demand


Data Source: MB research MagMin2014

0

5

10

15

20

25

30

35

40

45

Yearly output of Chinese refractories

production Mio tons

Data Source: Refsource 2014


18

Ensuring graphite supply through vertical integration

Vertical Integration

Soyuznoye Graphite Project

The Graphite Project of Magnezit in the Far East of Russia


Dalgraphite - Project Location

s. Soyuzsnoje, JAR EU

The license area is located in Jewish Autonomous region of Russia, on the right bank side of the Amur river on the boarder with China License covers exploration and production of Graphite and is valid through 2035


Core Drilling

7 554 meters

Sampling 8 581 проба* 8 581 samples

3D model of license area


Dalgraphite – Facts

Resources » Huge resources, among the biggest even in a global scale

(> 14 mio tons of graphitic carbon) » Flake size rather small, but sufficient for usage in refractories,

batteries and many other applications

Mining/Processing » Easy open pit mining: the graphite layers are lying flat and outcrop at the surface

(low strip ratio 0.5:1). » Process Flow-sheet development was made by SGS Canada » Simple flotation sufficient to get to a carbon level of 94% » Initial annual production: 40.000 tons of graphite per year

Mine life » At a production rate of 40.000 tons per year the mine life will exceed 300 years.

Costs » Low mining cost due to favorable location of the deposit at the slope of a hill. » Low production costs due to high carbon in the ore (average C 12,5%) and rather

soft ore. » Favorable logistics: Close to China and close to a station with connection to the

Trans-Siberian Railway.

Other important Advantages » Offtake agreement for many thousands tons with Magnezit foreseen » Strong support from central and local government (tax incentives, infrastructure…)


Dalgraphite – Facts

Thank you for your attention! Questions?

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