Supply Situation Report: Asia kaolin market dominated by China

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Published: Friday, 22 February 2013

Asia is now the leading regional kaolin producer in the world accounting for 28% of output in 2011 compared to 23% in 2007.

By Ian Wilson, Independent Consultant, UK

SUPPLY SECURITY

Asia is now the leading regional kaolin producer in the world accounting for 28% of output in 2011 compared to 23% in 2007 as shown in Table 1.

The main changes from 2007 to 2011 are a reduction in production from the US and UK and a re-assessment of Chinese output. Bob Virta (US Geological Survey Commodity Report for Clays) shows that kaolin output from the US fell from 7.11m tonnes in 2007 to 5.77m tonnes in 2011 with exports decreasing from 3.30m tonnes in 2007 to 2.49m tonnes in 2011.

The decrease of 1.34m tonnes in production from 2007 to 2011 was mainly due to closure of excess capacity and the switch of many paper mills to coating clay from Brazil. However, USGS Minerals Commodity Summarie's published in January 2013, estimated production for 2012 increased to 5.9m tonnes, with exports at 2.37m tonnes. From 2007 to 2011 output from the UK (Devon and Cornwall) reduced from 1.60m tonnes to approximately 1m tonnes, mainly due to cessation of coating clay production by Imerys to concentrate on filler, ceramic and other grades.

Imerys, the largest kaolin producing company in the world with an estimated output of around 5m tonnes has concentrated its coating clay operation in Brazil with IRCC (Imerys Rio Capim Caulim) and the recently acquired PPSA from Vale. The second largest kaolin producer in the world now is KaMin, which in 2012 acquired CADAM from Vale, in the Amazon basin, increasing its overall capacity by 600,000m tonnes (with sales of around 400,000m tonnes from CADAM at the present time).

Asia increased its share of kaolin output from 2007 to 2011 from 23 to 28%. This is mainly due to increased growth in the Chinese market and also a re-appraisal of the Chinese kaolin output. The USGS reports that for 2011 output of kaolin was 33.3m tonnes.

However, this includes 5.5m tonnes for crude kaolin from Uzbekistan and 3.55m tonnes of crude kaolin from Czech Republic (with estimated output of beneficiated kaolin of 900,000m tonnes). Virta reports that the kaolin output for 2011 of processed clay was between 23 to 25m tonnes. However, USGS reports do not indicate any kaolin production from China and just report that “in addition to countries listed China may also have produced kaolin but information is inadequate to make reliable estimates of output levels”. In this report it is estimated that output of kaolin in 2011 from China was 4m tonnes of which 3m tonnes has been identified.

The output by region for 2011 is shown in Figure 1 with Asia accounting for 28% of global output of 23.4m tonnes processed kaolin. The top six leading kaolin producing countries, US, China, Brazil, Germany, UK and Czech Republic account for 66% of world production as shown in Figure 2.






Kaolin production in Asia

Kaolin production in Asia is estimated at 6.57m tonnes as shown in Table 2.

The output is dominated by China with 61% as shown in Figure 3.







China

At the IM meeting in Athens in 2008, the output of kaolin from China was estimated at 2.78m tonnes. Recent information from China from the 11th Five year plan of Non-Metallic Minerals Industry shows that from 2005-2010 output of kaolin increased from 3.1 to 4m tonnes (approximately 5% per annum). For 2011 an output of 4m tonnes is estimated for Chinese kaolin.

A detailed study of the market has identified 3m tonnes which include both hydrous and calcined clay. The calcined feed clay is from the so-called hard clays of Northern China, generally associated with coal measures, with hydrous kaolin from many deposits throughout China as shown in Figure 4.

For the identified 3m tonnes of beneficiated kaolin, 87% are hydrous and 13% calcined products. For the 2.6m tonnes of hydrous kaolin approximately 8.54m tonnes has been mined and beneficiated giving a product yield of around 30%. For some of the deposits there is little waste as much of the coarse quartz sands and feldspar is utilised in ceramics.

For the 3m tonnes of identified production, the market split is dominated by ceramics (39%), paper (23%), paint (18%), plastics (5%) and others (15%). For the 2.6m tonnes of hydrous kaolin, the market split is ceramics (45%), paper (25%), paint (11%), plastics (2%) and others (16%). For the 0.40m tonnes of calcined clay derived from the hard kaolin deposits, the market split is paint (65%), plastics (23%), paper (5%) and others (7%).

China is now the leading producer of paper, porcelain, sanitaryware and tiles in the world with kaolin consumption increasing significantly over the past decade. Much attention has been paid in China to finding suitable coating clay deposits as much of the higher quality kaolin is imported from Brazil and US.

The leading producer of coating clay in China is Maoming Kaolin Science & Technology Co. Ltd (MMK); often referred to a Gao Ke (Gao is short for kaolin and Ke short for Science). Maoming is situated in Guangdong Province not far from the port of Zhanjiang. The company was first established on its present site in the late 1980s/early 1990s and was known as Maoming Kaolin Company.

Since 2002, MMK has been owned by Highsun Enterprises Group, a company involved in a large number of ventures including hotels, printing and now kaolin. In 2002 Highsun changed the name of the kaolin company to Maoming Kaolin Science & Technology Co. Ltd, or Gao Ke. In June 2010 it was announced that Highsun invested in Kalamazon, a company investigating the Manaus kaolin deposits in Brazil.

The Shange deposit is controlled by Gao Ke and covers an area of 43.3km2. The yield of coating clay at 80wt% <2µm is approximately 10% and at the 95wt% <2µm level is probably as low as 5-8%. This same area was drilled by English China Clays in the early 1990s by the 704 Geological Team. The Maoming kaolin exhibits a very well-defined pseudo-hexagonal morphology, as shown in Figure 6, which is very typical of clays derived from sedimentary kaolinitic-sands (similar examples are from Manaus, Brazil and Poveda de la Sierra, Spain).

Current plant capacity is put at 250-300,000 tpa based mainly on spray-dried product at 1.5% and filter cake product at 35% moisture. MMK coating clay is sold to many of the major papermills in China including APP, Stora Enzo, UPM, Chenming Paper Group and Sun Paper.

In the 5 year plan, domestic demand of major non-metallic minerals for kaolin was reported as 3.20m tonnes in 2010 with a forecast of 3.80m tonnes in 2015 (a 3.5% growth rate per annum).









India

India is an important developing market with two main locations of production based in Kerela and Gujarat.

20 Microns

20 Microns is India’s largest producer of micronised minerals which includes kaolin, calcium carbonate, bartyes, mica, nepheline syenite, silica and talc. Atil Parikh, joint managing director of 20 Microns, reports that the kaolin mines are located in two different neighbouring areas of Bhuj. Production facilities are now established at Bhuj, Vadodara and Tirunelveli.

20 Microns produces a wide range of hydrous, calcined and metakaolin grades as follows:

- 25,000 tonnes different grades of hydrous kaolin - 10% paper, 70% coatings, 10% ceramics, 5% plastics and 5% others. The rest of hydrous capacity is used for feed material for manufacturing calcined kaolin.

- 40,000 tonnes different grades of calcined kaolin - 10% PVC cables, 5% paper, 5% plastics, 75% coatings and 5% others.

- 5,000 tonnes metakaolin - 100% construction.

- Flash calcined kaolin has been processed in pilot plant and has yet to be commercialised.

These products are sold into various industries such as paint and coatings, paper, cable and ceramics. The hydrous kaolin has an ISO brightness ranging from 75-85 and an average particle size ranging from 0.3 to 2 microns. The calcined clays have high brightness ranging from 85-94 ISO brightness and an average particle size ranging from 0.5 to 1.5 microns.






English Indian Clays Ltd

English Indian Clays Ltd (EICL) has clay and starch divisions and is a well established company originally set-up as a joint-venture with English China Clays (now Imerys). In 1992 EICL became a fully owned Indian Company. Production capacity is 240,000 tpa with 180,000 tpa hydrous kaolin and 60,000 tpa calcined kaolin with its mine and processing plants located at Veli, northwest of Trivandrunm, Kerala. Calcined clay capacity was increased to 60,000 tpa in 2009. EICL is the largest single producer of kaolin in Asia based on its high quality sedimentary kaolin deposits in the Trivandrum area.

Some of the hydrous and calcined kaolin grades are shown below.

Hydrous Kaolin

SUPERGLOSS Spray dried. 87.5 ISO Brightness, mps 0.25µm - Paper coating

HIGLOSS Lump, 86.5 ISO Brightness, mps 0.35µm - Paper coating

BCK Spray dried, 85.0 ISO Brightness, mps 0.4µm - LWC paper

SUPERLUSTRE Powder, 87.5 ISO Brightness, mps 0.25µm - Liquid ink opacifer

Calcined Kaolin

HIMAFINE Powder, 93.5 ISO Brightness, mps 0.8 µm - Top coat in boards

HIMACOT Powder, 92.0 ISO Brightness, mps 1.3 µm - Pre-coat in boards

HIMAFIL Powder, 90.0 ISO Brightness, mps 1.7 µm - Paper filling

HIMAFIL Powder, 90.0 ISO Brightness, mps 1.4 µm - Anti-blocking in films

(mps - mean particle size)

In its annual report for 2011-12, EICL reported it is exploring the possibility of establishing a clay manufacturing unit at Bhuj, Gujarat with purchase of 0.105km2 and is in the process of obtaining various approvals required for the project.

In 2011-12 sales of the clay business were flat in volume terms and 8% higher in sales due to higher price and improved product mix. Export volume increased by about 10%. EICL spent half of its turnover on R&D expenditure and this work included utilisation of low quality matrix, new process techniques for the removal of other minerals from the clay, development of delaminated clay for barrier applications and studies on surface treated hydrous clay.

The kaolin plant at Kollam, acquired from Wolkem, has been found to be unviable due to various external and internal factors and it is intended to be closed down.







Ashapura Minechem

For several decades, Ashapura has been mining, processing and supplying kaolin products from its reserves in Bhuj, Gujarat. In recent years Ashapura has acquired reserves of between 2.5-3m tonnes in the state of Kerala. These deposits are in the same area as those of English Indian Clays. Ashapura has built a modern plant at Trivandrum with a capacity of 180,000 tpa which will produce both hydrous and calcined grades. The current output is believed to be well below capacity as it is a new operation. Some of the planned grades are shown below.

Hydrous Kaolin

PALGLOSS 95 90-93% <2µm, 85-87 ISO brightness, high glossing paper coating

PAPRILL 80-85% <2µm, 80-82 ISO brightness, paper filler clay

CERALIN H Sanitaryware clay

KAOMIN FG Fibre glass

RUBBOLIN Rubber

PESTOLIN Pesticide formulations

SURFACTOLIN Soaps

Calcined Kaolin

KAOCOAT 83-87% <2µm, 92-94 ISO brightness, paper coating

PAINTOLIN 95CD 80-85% <2µm, 92-94 ISO brightness

KAOMIN MK Metakaolin for concrete additive

In Rajasthan sedimentary kaolinitic sands are being developed by Progressive Enterprises (and its sister company Popular Minerals) with a mine and plant in the district of Chittorgarth. The natural silica sand has 99.5% SiOs content and is used in glass. The white kaolin is currently used in various ceramic bodies and glazes. Markets for paper, paint, plastics, ceramics and other uses are being evaluated.






South Korea

South Korea production of kaolin for 2011 is put at 463,000 tonnes serving tile, refractory, construction, bone china and others with a further 335,000 tonnes for high quality bricks. Local ceramic companies are Samsung Ceramic and Asia Ceramic with Samhyun buying and grinding/processing local kaolin to supply end-users.

South Korea relies on high quality hydrous and calcined clay for many industries as advised by SB Park of SBP Ltd. Calcined clay imports for 2011 were 49,000 tonnes mainly from the US with 19,000 tonnes (US $ 464/tonne CIF), China 18,000 tonne ($303/tonnes CIF) and other cheaper imports. Korea is an important paper producing country and 1.185m tonnes mineral pigment were used in 2011 dominated by ground calcium carbonate (GCC) with 1.1m tonnes, precipated calcium carbonate (PCC) 100,000 tonnes and 85,000 tonnes of imported paper coating clay mainly from the US and some from Brazil. 16,000 tonnes of hydrous kaolin was imported in 2011 for non-paper markets supplied from China, Vietnam, Indonesia and UK for ceramic grades.

Thailand

Thailand is an important country for the production of high quality ceramics, particularly tableware and sanitaryware. One of the largest producers of kaolin in Southeast Asia is Imerys Ceramics with ball clay, feldspar and a kaolin operation at Ranong.

Grades such as MRD Plus, MRD Standard and MRD Wite are produced for tableware and porcelain and MRD Cast for sanitaryware. The deposit at Ranong is a kaolinised granite with some cross cutting pegmatite veins. Alteration of the granite has led to the development of tubular halloysite, rather than platy kaolinite, with the tubes up to 20µm in length, especially so in the cross cutting pegmatite zones where the feldspar has been altered to halloysite as well.

The presence of coarse tubes of halloysite gives the clay excellent casting properties. Local producers demand a very high casting rate, and combined with the good casting concentration the kaolin is ideally suited for sanitaryware. Low iron bearing clay suitable for tableware and porcelain can be selectively mined.

Malaysia

Malaysia has a number of kaolin producing companies mining kaolinised granite. Three of the main companies are:

- Kaolin (M) Sdn Bhd - capacity is 90,000 tpa with a plant in Tapah. The markets served are mainly paint, paper, rubber, adhesives and glazes.

- Associated Kaolin Industries Sdn Bhd - capacity around 92,000 tpa and based in Tapah. Sells products under “AKIMA” trade name. Markets are filler clay, paint, ceramics, palm oil refining, rubber and fertilisers.

- Sibelco Malaysia acquired Tinex, a kaolin, mining and processing Company in Bidor, Perak in 2005. Capacity is put at around 60,000 tpy with TK50, TK35 and TK25 grades sold mainly to the paint and ceramics markets. TK15 is sold for palm oil refining.

Indonesia

Prior to the financial crisis in the late 1990s kaolin output from Indonesia was around 500,000 - 600,000 tpa with production mainly from Belitung Island. Here kaolinised granite was mined and processed by many companies of which PT Alter Abadi was the largest. Today production is estimated at just 150,000 tpa mainly from Belitung Island. In the 1990s a major market for kaolin from Belitung was filler clay but this market was largely replaced by GCC. The main markets now are for paint and ceramics.

Other kaolin production is reported from Bangladesh, Japan, Pakistan, Sri Lanka and Vietnam.

MARKET DEMAND

An estimate of markets supplied from kaolin produced in Asia is shown in Figure 7 and indicates that ceramics is the largest with paint and paper following. The production figure of 5.57m tonnes excludes the 1m tonnes for Chinese kaolin where end-use not yet determined. These figures do not include imported kaolin which would be included in consumption figures not prepared due to insufficient information at this stage.

Paper indutry in Asia

Figures from RISI for 2011 show that paper and board production in Asia was 171.6m tonnes representing 43% of global output of 398.9m tonnes as shown in Table 3.

A plot of the global paper and board output of 398.9m tonnes in 2011 is shown in Figure 8 with China with 25% and other Asian countries with 18% of the global share.

In 1994 China only produced 21m tonnes so this has been a dramatic increase. The 11 leading countries produce 299.8m tonnes accounting for 75% of global paper and board output in 2011 with China leading the way with almost 25%. Asia is represented by China, Japan, South Korea, Indonesia and India (Table 4) with positive growth rates from 2010 to 2011 of 7.1% for China, 3.5% for South Korea, Indonesia with 1.2% and India with good growth of 4.7%. Of the other countries outside Asia only Brazil showed increased output of 1.8%.

The paper and board production in Asia for 2011 was 171.6m tonnes with China accounting for 58% followed by Japan with 15% as shown in Figure 9.

Asia's consumption of paper coating clay is being re-assessed but estimates of consumption in 2011 for six countries (figures for India not available) are shown in Table 5.

Of this 1.82m tonnes the only significant coating clay is produced in China from the Maoming operation of MMK with production of 300,000m tonnes. EICL (India) is the other important producer of coating clay. The remaining 1.52m tonnes is imported mainly from the US (Georgia) and Brazil (Imerys operations of Rio Capim Caulim and KaMin operation of CADAM).

The imports of kaolin into Japan have decreased since 2007 when 1m tonnes was imported from the US (750,000 tonnes) and Brazil (250,000 tonnes). Japan is showing a decline in its paper output but still a very important country for imports of kaolin now estimated in 2011 at 800,000 tonnes supplied mainly by Imerys and the US producers KaMin, BASF and Thiele.

PRICE TRENDS

For China the main suppliers are KaMin (Hydragloss 90), CADAM - now KaMin (Amazon SB), BASF (Miragloss 90, 91) and Thiele (Guangze Plus and Kaofine 90) accounting for up to 350,00 tpa of imports. Prices of imported coating clay are at present around $250-280/tonne (CIF).

The main pigment for paper in China is now GCC for both filler and coating paper but the top coat of fine particle size GCC is blended with imported coating clay to give the sheet its gloss. PCC is also used as filler at satellite plants at various paper mills. For China, C65 (65% <2 microns) is the filler and C95 and C98 are for coating. The price range for GCC in China in 2010 is shown in Figure 10 along with outlined pricing for local Maoming kaolin and imported kaolin on cif and delivered basis. The price of pulp is high which has led to paper makers increasing the amount of filler and coating pigments, and hence less pulp, to reduce costs.

Acknowledgements: Thanks to Professor Wen Lu of Chengdu, China, Atil Parikh (Joint Managing Director) of 20 Microns, India, SB Park of SB Resources Ltd, Seoul, Korea and Larry Lai, Yie-Lie Enterprises, Shanghai, China for kindly providing information for this article. Particular thanks to Bob Virta of USGS for his updates on Global Kaolin production in regular Mineral Commodities Reports.