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Molybdenum Ore Development and Molybdenum Product Deep Processing Project of Yanbian Prefecture
2016/03/23     Source:

 

1. Introduction to the Project

1.1 Project Background

1.1.1 Product Introduction

Molybdenum is a non-renewable and limited rare metal, which is widely used in aviation, military industry, metallurgy, electronics, automobiles, chemicals and many other fields. With the rapid development of China’s economy, especially the raise of new and high technology industries, the requirement for molybdenum products increases greatly. Longjing City has rich molybdenum reserves, which is mainly distributed in Tianbaoshan of Laotougou County and other places. The preliminary survey found that there is 10,000 tons of molybdenum metal reserves with high quality, which can be used to produce high-grade ammonium molybdate, molybdenum powders, molybdenum oxide, molybdates, molybdenum wires, molybdenum rods and other products. With the adoption and development of new molybdenum technology, the consumption ratio of molybdenum will increase continuously, so the prospect of molybdenum ore development and molybdenum product processing project is very bright.

1.1.2 Market Overview

China is rich in molybdenum ore resources and incensement of resource reserve is big. The total available reserve is 8.4 million tons, ranking the second place in the world. There are 222 mining areas with proven reserves, which are distributed in 28 provinces (autonomous regions and municipalities). Molybdenum ore has many large ore deposits, which is an important feature. From the formation age of molybdenum ore, in addition to a few molybdenum ores that are formed in late paleozoic era and cenozoic, the vast majority of molybdenum deposits were formed in Mesozoic and they are products of tectonic-magmatic activity during Yanshanian.

(1) International market

Currently, 85% of global molybdenum reserves are concentrated in the United States, China and Canada. The United States controls 41% of global molybdenum reserve and Canada controls 6% of global reserve. These two counties have many primary molybdenum ores. In recent years, the export of these two countries are declining year by year and the United States exports the molybdenum concentrate to Western Europe and Japan, reducing its own pollution and protecting its own environment. Although the United State has rich molybdenum resources, it is the first country who implements molybdenum resource reserve control. Canada also implements the strategy followed by the United States. Although Japan and Korea are countries lacking rare metal resources, they have advanced the reserves of molybdenum and other rare metal resources to country strategy altitude and their reserve targets aim to China. Japan, Korea and Europe import molybdenum and other rare strategic resources from China through various channels and means for reserve, which shall arouse great attention.

Specialized production is a global strategic law for the development of molybdenum industry. Famous molybdenum mining enterprises in America and Chile take advantage of molybdenum resources to produce molybdenum concentrates and to sell molybdenum concentrates to professional roasting plants for rough machining. Famous molybdenum processing enterprises in America, Canada, Japan and other countries purchase raw materials from other countries and take advantage of their professional skills to produce high value-added molybdenum metal products. The minority of world’s famous molybdenum mining enterprises and molybdenum processing enterprises have implemented scale strategies with large productivity scale (the annual molybdenum concentrate productivity of one enterprise is above 30,000 tons of physical quantity and the annual molybdenum calcination productivity is above 20,000 tons). They controlled a lot of market share and they can flexibly adjust the yield and price.

(2) Domestic market

The industry policy of the “12th five-year plan” about molybdenum industry is to basically to be extended to the earlier stage of the “13th five-year plan”. According to the overall requirements of reducing administrative examination and approval procedures and reducing market intervention from the Central State Council, National Rare Metal Regulations, the 13th five-year development plan about national rare metal industries and other provincial and city support policies, the molybdenum market will be supervised at the early and middle stage of the 13th five-year plan to ensure the security of national molybdenum policy and domestic market demand, which plays a decisive role.

As the international market demand for molybdenum gets warm again, the molybdenum price rebounds, and the further development of China's industrialization, urbanization, modernization of agriculture and informatization and being driven by the better exports and large amounts of newly added resources and newly added productivity, although the mining quota and production plan in national macro-control affect the increase of molybdenum production, the average annual increase of molybdenum production still reaches about 3%, the molybdenum production in 2015 reaches 130,000 tons and it is predicted to reach 150,000 tons in 2020, while the domestic average consumption increment reaches about 10%, it reaches 120,000 tons in 2015 and it is predicted to reach 135,000 tons in 2020. Therefore, it is roughly predicted that the supply and demand of the molybdenum market in "“13th five-year plan " period are booming and the demand and supply are balance, which issued a more optimistic signal to everyone. However, the probability of it is only 70%!

Because China and some developed countries worldwide take molybdenum as rare strategic resource to control and reserve, China’s “13th five” about molybdenum industrial policy will be developed mainly based on “control and reserve”. It is predicated that the supply and demand of molybdenum in China’s market are booming and nearly balance and the probability of the rebound in the domestic molybdenum price is big; it is predicted that the probability of large increase of molybdenum reserves in China is small. According to the above points, it can be interfered that the development environment of molybdenum mining industry in the “13th five-year” is good and the trend of conducting mining in protecting environment and protecting environment in mining and establishing green molybdenum mine will not change.

The proven molybdenum ore resource in China is mainly molybdenum with symbiotic multi-metal as mainstream type. The symbiotic mineralization principle of molybdenum, copper and wolfram determines that the finding ores in deep locations may find numerous large-scale copper (molybdenum) ore deposits and molybdenum (tungsten) ore deposits during the”13th five”. Therefore, it is recommended that it should attract the attention of molybdenum mining enterprises and the opportunity of finding copper (molybdenum) ore deposits and molybdenum (tungsten) ore deposits shall be gripped, the business scope of mineral products shall be expended and the model of only developing molybdenum ore shall be converted into the metal development of copper-tungsten or other metal exploitation and use models.

Molybdenum is non-renewable and limited rare metal, which is widely used in aviation, military industry, metallurgy, electronics automobile, chemical and many other fields. With the rapid development of China’s economy, especially the raise of high-tech industry and with the adoption and mailing of molybdenum technology, the consumption ratio of molybdenum products will increase continuously and the market prospect of molybdenum products will be broader.

1.1.3 Advantageous Conditions of Project Construction

1Policy conditions

Longjing City enjoys preferential policies of adjusting and reforming the northeastern rust belt, western development policies, policies for key counties for poverty alleviation and development work, policies for frontier minorities and the support for projects of boosting development in border regions and improving living standards.  Currently, the city faces the development and open of Tumen river, opening up of  Changjitu, Yanlongtu integration and other significance strategic opportunities. Especially, the Yanlongtu integration enables the City to have more obvious policy advantages and huge development potential. As the early implementation area of Yanlongtu integration, Longjing accelerate the convergence with the development of Yanji. The trend that the population and industry in Yanji transfers to that of Longjing is more obvious, which create favorable conditions for the city expansion and accelerated development.

2Location advantage

Longjing is located in the golden triangle hinterland of Northeast Asia. The location is favorable and the transportation is convenient. There are five rail trunk lines passing through the territory and the Tu-Wu highway and Songlao mainline connect with city's road network in road. The distance between Longjing and Yanji City where the prefecture is located or Yanji airport is just 10 minutes and the distance from Longjing to the beginning place of new airline starting from Huichun to ZARUBINO, Huichun, is just one-hour’s drive. Longjing is located in the DPRK border zone with 142.5 kilometers of borderline. Longjing owns two state first-class open border ports, Kaishantun Au port and Sanhe port. The distance between Sanhe port and North Korean Chunjin port is just 87 kilometers and the Sanhe port is the optimal channel between North Korean and Japan Sea. The two ports have the ability of being passed with 100, 000 passengers, 100,000 vehicles and more than 500,000 tons of goods, at which the trade with North Korea, Russia and other neighboring countries can be done directly and the carrying trade passing through neighboring countries can not done, so the two port have an extensive border trade opportunity.

3Resource advantage

The product resource is rich. There are relatively rich coal, metal and non-metallic minerals and there are trimodal stones that is named as “No.1 acid-resistance stone in the world” and rich oil and gas resources. 33 kinds of mineral resources have been found, including coal, natural asphalt, copper, lead, zinc, gold, cadmium, iron, molybdenum, acid resistance andesite, wollastonite, limestone, diabase, mineral water and so on; There is a wide range of special resource, including 124 families and 1,072 kinds of wild economic plants, 186 kinds of rare medicinal plants and other wild economic animals, including black bear, wild boar, roe deer, frog and so on. Longjing City is a production base of China apple pear, green rice, red sun-cured tobacco and cattle and there are the biggest apple-pear orchard in the world, the biggest artificial feeding beer base in Jilin Province and a national tricholoma matsutake nature protection area in Tianfozhi mountain.

4Traffic advantage

Longjing is the frontier of opening up pilot area in Changjitu and is also a core of Tumen River regional international cooperation and Yanlongtu intergration construction, which is 18 kilometers away from the autonomous prefecture, Yanji city, 13.5 kilometers away from the important international airport in Eastern Jilin, Yanji airport and 110 kilometers away from the beginning place of new airline starting from Huichun to ZARUBINO, Huichun. The Longjing border line is 142.5 kilometers long and Longjing have two state first-class open border ports, Sanhe port and Kaishantun Au port. The Sanhe port is 86 kilometers away from North Korean Chongjin port and about 1000 kilometers away from Japan Niigata port, which is the optimal channel between China and Japan Sea passing through North Korean.

1.2 Content and Scale of Project Construction

The project is planned to cover 50,000 square meters with 15,000 square meters of construction area. The project focuses on in-depth development and deep processing of molybdenum ore resources to improve product quality and increase efficiency.

1.3 Total Investment of the Project and Capital Raising

Table 1: Summary Table of Total Investment of the Project     Unit: RMB10,000

No.

Expense Name

Amount of Investment

Proportion of Total Investment %

Remarks

1

Construction investment

18000

90

 

2

Interest incurred in construction period

 

 

 

3

Working capital

2000

10

 

 

Total investment of the project (1+2+3)

20000

100

 

1.4 Financial Analysis and Social Evaluation

1.4.1 Main Financial Indexes

Table 2: List of Major Indexes for Forecast of Economic Benefits

No.

Name

Unit

Index

Remarks

1

Sales income

RMB10,000/a

27500

Normal year

2

Total profit

RMB10,000/a

8130

Normal year

3

FIRR of all investments

%

22

After income tax

4

FNPV (Ic=10%)

RMB10,000

15400

After income tax

5

Period for recovery of all investments (after tax)

a

3.5

Including 2 years of construction period

6

Rate of return on investment

%

29

After income tax

Note: "RMB10,000" in the Table shall be RMB.

1.3.2 Social Evaluation

Molybdenum ore development is not only a powerful combination of resource advantage and advance technologies, but also will promote the City to achieve breakthrough in molybdenum industry. The City can convert the advantage of rich resource into economic advantage with first-class R & D technologies and products, invite more investment, expand industrial clusters, lay the foundation for future investment invitation of the City and boost the economic development of the City.

1.5 Cooperative Ways

Sole proprietorship, cooperation

1.6 Construction Site of the Project

Laotougou Town, Longjing City

1.7 The On-going Condition of Project

The project proposal has been completed.

2. Introduction to Partner

2.1 Basic Conditions

Name: Economic and Technical Cooperation Bureau of Longjing City

Address: Economic and Technical Cooperation Bureau of Longjing City

2.2 Overview:

Longjing City in Jilin Province is the birthplace of Chinese Korean folk culture and the area with the most concentrated domestic Korean nationality and the most intact preserved Korean folk culture. Chinese Korean nationality gave birth to brilliant folk culture and created a unique national brand during the long development course through trials and hardships and prosperity and development. Longjing is creating a folk culture city of Chinese Korean nationality with its unique natural resource and folklore advantages.

Longjing City is located in the east of Jilin Province, the southeast of Yanbian Korean Autonomous Prefecture and the east of Changbai Mountain. Longjing City is a frontier of opening up pilot area of Changjitu and an important part of Tumen River regional international cooperation and Yanlongtu integration. The city covers an area of 2208 square kilometers with 71.5% of forest coverage rate and 167,000 people in total, including 110, 800 of the Korean nationality, accounting for 66.4% of the total population. There are 5 counties, 2 townships and 1 community management committee. With the steady progress of “Yanlongtu” integration strategy and the deepening implementation of Chang-ji-tu program planning, the economic and social development of Longjing City shows a great vitality. The eco-suitability, characteristic folk custom, port location, resources products and other potential advantages become increasingly evident and the development prospect is broad.

2.3 Contact Method

Contact Person of Project Unit: Wang Wei

Tel: 0433—3223870 13944768877

Fax: 0433—3223870

E-mail: ljsjjjbgs@126.com

 

Contact Person of Project City (Prefecture):

Contact Unit: Economic and Technical Cooperation Bureau of Yanbian Prefecture

Contact Person: Sui Siyu

Tel: 0433-2369007    13039339299

Fax: 0434-2369007

Website of City (Prefecture): www.investyanbian.gov.cn

 

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