Developments inDevelopments in

synthetic magnesia synthetic magnesia

productionproduction

Paul Schipper, Managing Director Nedmag Paul Schipper, Managing Director Nedmag

IndustriesIndustries

NedmagNedmag

Market leader in synthetic DBMMarket leader in synthetic DBM

Nedmag Product Nedmag Product RangeRange

nedMag 99 nedMag 99 high purity synthetic DBM high purity synthetic DBM oxideoxide

Important raw material for refractories for the cement and steel industryImportant raw material for refractories for the cement and steel industry

nedMag C nedMag C Magnesium Chloride solids & Magnesium Chloride solids & solutionssolutions

Used in a wide range of applications, from industrial processes like textile finishing and catalyst Used in a wide range of applications, from industrial processes like textile finishing and catalyst production production

to the production of feed and food additivesto the production of feed and food additives

Nedmag is a competitive and reliable supplier of de-icers throughout the worldNedmag is a competitive and reliable supplier of de-icers throughout the world

Due to its very hygroscopic character, it is one of the most effective dust suppressantsDue to its very hygroscopic character, it is one of the most effective dust suppressants

nedMag Ca nedMag Ca Calcium Chloride solids & Calcium Chloride solids & solutionssolutions

Used in drilling mud in oil & gas industry, as dehydration agents, as dust suppressants, as de-Used in drilling mud in oil & gas industry, as dehydration agents, as dust suppressants, as de-icersicers

Effective de-icer used for melting ice and snow (lowest freezing point), widely used in Effective de-icer used for melting ice and snow (lowest freezing point), widely used in prewetting salt prewetting salt

Effective agent for dust control and has properties making it ideal for maintaining unpaved Effective agent for dust control and has properties making it ideal for maintaining unpaved roadsroads

nedMag H nedMag H industrial grade Magnesium industrial grade Magnesium Hydroxide Hydroxide

Sold in suspension and in powder form, mainly used in the production of paper coatings, in pulp Sold in suspension and in powder form, mainly used in the production of paper coatings, in pulp bleaching, bleaching,

as friendly alkali to neutralize acidic waste water streams and to treat acidic flue gassesas friendly alkali to neutralize acidic waste water streams and to treat acidic flue gasses

AgendaAgendaSynthetic versus Natural DBM Synthetic versus Natural DBM

processprocess- Overview natural and synthetic DBM processOverview natural and synthetic DBM process

- Main cost drivers synthetic DBM processMain cost drivers synthetic DBM process

- Overview of synthetic DBM producersOverview of synthetic DBM producers

Key areas in synthetic DBM Key areas in synthetic DBM processingprocessing - Energy consumptionEnergy consumption

- EnvironmentEnvironment

- Consistency and characteristics of synthetic Consistency and characteristics of synthetic DBMDBM

- CapacityCapacity

AgendaAgendaSynthetic versus Natural DBM Synthetic versus Natural DBM

processprocess- Overview natural and synthetic DBM processOverview natural and synthetic DBM process

- Main cost drivers synthetic DBM processMain cost drivers synthetic DBM process

- Overview of synthetic DBM producersOverview of synthetic DBM producers

Key areas in synthetic DBM Key areas in synthetic DBM processingprocessing - Energy consumptionEnergy consumption

- EnvironmentEnvironment

- Consistency and characteristics of synthetic Consistency and characteristics of synthetic DBMDBM

- CapacityCapacity

Natural DBM Process Natural DBM Process OverviewOverview

Source: Magnesita

Source: Maerz

Synthetic DBM Process Synthetic DBM Process OverviewOverview

AgendaAgendaSynthetic versus Natural DBM Synthetic versus Natural DBM

processprocess- Overview natural and synthetic DBM processOverview natural and synthetic DBM process

- Main cost drivers synthetic DBM processMain cost drivers synthetic DBM process

- Overview of synthetic DBM producersOverview of synthetic DBM producers

Key areas in synthetic DBM Key areas in synthetic DBM processingprocessing - Energy consumptionEnergy consumption

- EnvironmentEnvironment

- Consistency and characteristics of synthetic Consistency and characteristics of synthetic DBMDBM

- CapacityCapacity

In synthetic DBM, the main cost In synthetic DBM, the main cost drivers are energy & raw drivers are energy & raw

materials, materials, and investments & and investments &

maintenancemaintenance

Energy & raw materials costs will riseEnergy & raw materials costs will rise

Investments & maintenance costs Investments & maintenance costs will risewill rise

AgendaAgendaSynthetic versus Natural DBM Synthetic versus Natural DBM

processprocess- Overview natural and synthetic DBM processOverview natural and synthetic DBM process

- Main cost drivers synthetic DBM processMain cost drivers synthetic DBM process

- Overview of synthetic DBM producersOverview of synthetic DBM producers

Key areas in synthetic DBM Key areas in synthetic DBM processingprocessing - Energy consumptionEnergy consumption

- EnvironmentEnvironment

- Consistency and characteristics of synthetic Consistency and characteristics of synthetic DBMDBM

- CapacityCapacity

Limited Availability of Synthetic DBMLimited Availability of Synthetic DBMversus 10 000 000 t supply of natural versus 10 000 000 t supply of natural

DBMDBM

NedmaNedmagg

165 kt165 kt UbeUbe165 kt165 kt

MartinMartinMariettaMarietta

40 kt40 kt

PenolesPenoles40 kt40 kt

PPLPPL85 kt85 kt

PRODUCERS

AgendaAgendaSynthetic versus Natural DBM Synthetic versus Natural DBM

processprocess- Overview natural and synthetic DBM processOverview natural and synthetic DBM process

- Main cost drivers synthetic DBM processMain cost drivers synthetic DBM process

- Overview of synthetic DBM producersOverview of synthetic DBM producers

Key areas in synthetic DBM Key areas in synthetic DBM processingprocessing - Energy consumptionEnergy consumption

- EnvironmentEnvironment

- Consistency and characteristics of synthetic Consistency and characteristics of synthetic DBMDBM

- CapacityCapacity

Oil price will continue to Oil price will continue to increaseincrease

Oil price in US$ per barrelOil price in US$ per barrel(source: International Energy Agency)(source: International Energy Agency)

020406080

100120140160180200

2000 2005 2010 2015 2020 2025 2030

Energy-related Investments Energy-related Investments 1 000 000 EUR per year1 000 000 EUR per year

in Nedmag DBM Productionin Nedmag DBM ProductionRecent Nedmag Investments € 5 000 000Recent Nedmag Investments € 5 000 000

Optimisation calcining

€ 500 000

Reduced Hydration

€ 250 000

Process Automation

€ 3 500 000

Increased Plant Efficiency

€ 900 000

AgendaAgendaSynthetic versus Natural DBM Synthetic versus Natural DBM

processprocess- Overview natural and synthetic DBM processOverview natural and synthetic DBM process

- Main cost drivers synthetic DBM processMain cost drivers synthetic DBM process

- Overview of synthetic DBM producersOverview of synthetic DBM producers

Key areas in synthetic DBM Key areas in synthetic DBM processingprocessing - Energy consumptionEnergy consumption

- EnvironmentEnvironment

- Consistency and characteristics of synthetic Consistency and characteristics of synthetic DBMDBM

- CapacityCapacity

Environmental Factors Environmental Factors impacting Synthetic DBM impacting Synthetic DBM

ProductionProduction

Synthetic

MgO

Producers

DustRegulations

EmissionRegulations

(NOx, CO2, SO2)

EffluentRegulations

Other

High Environmental High Environmental Investments >> 1 000 000 Investments >> 1 000 000

EUR per yearEUR per yearin Nedmag DBM Productionin Nedmag DBM ProductionRecent Nedmag Investments € 7 000 Recent Nedmag Investments € 7 000

000000Exhaust Gas Scrubbers

€ 2 900 000

Noise Reduction

€ 700 000

Dust filters

€ 3 000 000

Emission Control

€ 400 000

AgendaAgendaSynthetic versus Natural DBM Synthetic versus Natural DBM

processprocess- Overview natural and synthetic DBM processOverview natural and synthetic DBM process

- Main cost drivers synthetic DBM processMain cost drivers synthetic DBM process

- Overview of synthetic DBM producersOverview of synthetic DBM producers

Key areas in synthetic DBM Key areas in synthetic DBM processingprocessing - Energy consumptionEnergy consumption

- EnvironmentEnvironment

- Consistency and characteristics of synthetic Consistency and characteristics of synthetic DBMDBM

- CapacityCapacity

ConsistencyConsistency

Focus on:Focus on:

TechnologyTechnology

Raw materials (brine and dolime)Raw materials (brine and dolime)

AutomationAutomation

Process controlProcess control

Investments over € 1 500 000 per Investments over € 1 500 000 per year year

Consistency:major Consistency:major characteristics very stable characteristics very stable

over timeover time

0,00,10,20,30,40,50,60,70,80,91,01,11,21,31,41,5

2002 2003 2004 2005 2006 2007 2008

CaO % < 0,8% every year

CaO % in nedMag 99 (yearly average)

Consistency:major Consistency:major characteristics very stable characteristics very stable

over timeover time

0,00

0,05

0,10

0,15

0,20

0,25

0,30

2002 2003 2004 2005 2006 2007 2008

SiO2 % < 0,15% every year

SiO2 % in nedMag 99 (yearly average)

In cement applications,In cement applications,Nedmag has the best Nedmag has the best

productproductVery low lime content < 0.9%Very low lime content < 0.9%(to prevent formation of low melting calcium aluminates)(to prevent formation of low melting calcium aluminates)

Very homogeneous distribution of Very homogeneous distribution of limelime

(higher lime content cannot be corrected by higher silica content, (higher lime content cannot be corrected by higher silica content, because because

lime silicates are not stable enough to prevent formation of calcium lime silicates are not stable enough to prevent formation of calcium aluminates)aluminates)

High magnesia content 98.5%High magnesia content 98.5%

High density 3.4High density 3.4(low porosity to prevent infiltration of alkali and of lime from cement (low porosity to prevent infiltration of alkali and of lime from cement

clinker)clinker)

Nedmag is exceptional in Mag-Spinel Nedmag is exceptional in Mag-Spinel

BricksBricks

due to low lime and high magnesia due to low lime and high magnesia

96,0

96,5

97,0

97,5

98,0

98,5

99,0

0,00,51,01,52,02,5 CaO (%)

MgO content (%)

Source: Value Added Europe

NEDMAG 99

PPL

Kümas ExtraQMAGHFE

MagnesitaM30

QMAGExtra

QMAGSuper

ChineseBest DBM

Penoles

In steel applications,Nedmag product is excellent

Very homogeneous

High magnesia content 98.5%

High C/S ratio > 6

High density 3.44

nedMag product can partially replace fused magnesia in MgOC

bricks

Choice of synthetic DBM supplierChoice of synthetic DBM supplierdepends on technical depends on technical

requirements,requirements,specific to each applicationspecific to each application

Nedmag synthetic DBMNedmag synthetic DBM

especially fit for MagSpinel especially fit for MagSpinel

products in Cement applications,products in Cement applications,

Excellent fit for MagCarbon Excellent fit for MagCarbon

products in Steel applicationsproducts in Steel applications

AgendaAgendaSynthetic versus Natural DBM Synthetic versus Natural DBM

processprocess- Overview natural and synthetic DBM processOverview natural and synthetic DBM process

- Main cost drivers synthetic DBM processMain cost drivers synthetic DBM process

- Overview of synthetic DBM producersOverview of synthetic DBM producers

Key areas in synthetic DBM Key areas in synthetic DBM processingprocessing - Energy consumptionEnergy consumption

- EnvironmentEnvironment

- Consistency and characteristics of synthetic Consistency and characteristics of synthetic DBMDBM

- CapacityCapacity

Nedmag has increasedNedmag has increasedits capacity to 165 000 tits capacity to 165 000 t

Yearly MgO production 1994 - 2008

100

110

120

130

140

150

160

170

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

kT

Cement demand will Cement demand will increaseincrease

by 5 % per year on average by 5 % per year on averageCement demand in billion MTCement demand in billion MT

(Source: Cembureau)(Source: Cembureau)

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

2000 2005 2010 2015 2020

Steel demand will increaseSteel demand will increase by 4 % per year on average by 4 % per year on average

Steel demand in billion MTSteel demand in billion MT(Source: World Steel Association)(Source: World Steel Association)

0,5

1,0

1,5

2,0

2000 2005 2010 2015 2020

1 Million T Synthetic DBM Capacity 1 Million T Synthetic DBM Capacity ClosuresClosures

CompanyCompany CountryCountry DateDate TechnologyTechnology MT paMT paSteetley Steetley UKUK 19911991 SeawaterSeawater 100 000100 000National RefractoriesNational RefractoriesUSAUSA 19941994 SeawaterSeawater 100 000100 000Sardamag Sardamag ItalyItaly 19941994 SeawaterSeawater 70 00070 000PenolesPenoles MexicoMexico 19941994 SeawaterSeawater 70 00070 000Shin NihonShin Nihon JapanJapan 19951995 SeawaterSeawater 100 000100 000BirlaBirla IndiaIndia 19981998 SeawaterSeawater 50 00050 000Asahi GlassAsahi Glass JapanJapan 19991999 SeawaterSeawater 30 00030 000Ube Industries *Ube Industries * JapanJapan 1990’s1990’s SeawaterSeawater 200 000200 000Martin Marietta *Martin Marietta * USAUSA 1990’s1990’s BrineBrine 50 00050 000CogemaCogema ItalyItaly 20032003 SeawaterSeawater 50 00050 000Harbison Walker Harbison Walker USAUSA 20032003 BrineBrine 100 000100 000JormagJormag JordanJordan 20052005 BrineBrine 40 00040 000Dead Sea PericlaseDead Sea Periclase IsraelIsrael 20052005 BrineBrine 40 00040 000

TOTALTOTAL 1 000 0001 000 000* still producing DBM at reduced capacity* still producing DBM at reduced capacity

Future supply-demand for Future supply-demand for synthetic DBM not balanced? synthetic DBM not balanced?

Higher demand for cement and Higher demand for cement and steelsteel

Lower supply for synthetic DBMLower supply for synthetic DBM

Nedmag studying future capacity Nedmag studying future capacity expansionexpansion

Link to movie(repackage movie in 3 minutes)

Shortcut to Nedmag Movie.lnk

Thank Thank you!you!