Developments in synthetic magnesia production Paul Schipper, Managing Director Nedmag Industries

1. Developments insynthetic magnesia productionPaul Schipper, Managing Director Nedmag Industries

2. Nedmag Market leader in synthetic DBM

3. Nedmag Product Range nedMag 99 high purity synthetic DBM oxide Important raw material for refractories for the cement and steel industry nedMag C Magnesium Chloride solids & solutions Used in a wide range of applications, from industrial processes like textile finishing and catalyst production to the production of feed and food additives Nedmag 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 suppressants nedMag Ca Calcium Chloride solids & solutions Used in drilling mud in oil & gas industry, as dehydration agents, as dust suppressants, as de-icers Effective de-icer used for melting ice and snow (lowest freezing point), widely used in prewetting salt Effective agent for dust control and has properties making it ideal for maintaining unpaved roads nedMag H industrial grade Magnesium Hydroxide Sold in suspension and in powder form, mainly used in the production of paper coatings, in pulp bleaching, as friendly alkali to neutralize acidic waste water streams and to treat acidic flue gasses

4. Agenda • Synthetic versus Natural DBM process • Overview natural and synthetic DBM process • Main cost drivers synthetic DBM process • Overview of synthetic DBM producers • Key areas in synthetic DBM processing • Energy consumption • Environment • Consistency and characteristics of synthetic DBM • Capacity

5. Agenda • Synthetic versus Natural DBM process • Overview natural and synthetic DBM process • Main cost drivers synthetic DBM process • Overview of synthetic DBM producers • Key areas in synthetic DBM processing • Energy consumption • Environment • Consistency and characteristics of synthetic DBM • Capacity

6. Natural DBM Process Overview Source: Magnesita

7. Synthetic DBM Process Overview Source: Maerz

8. Agenda • Synthetic versus Natural DBM process • Overview natural and synthetic DBM process • Main cost drivers synthetic DBM process • Overview of synthetic DBM producers • Key areas in synthetic DBM processing • Energy consumption • Environment • Consistency and characteristics of synthetic DBM • Capacity

9. In synthetic DBM, the main cost drivers are energy & raw materials, and investments & maintenance Energy & raw materials costs will rise Investments & maintenance costs will rise

10. Agenda • Synthetic versus Natural DBM process • Overview natural and synthetic DBM process • Main cost drivers synthetic DBM process • Overview of synthetic DBM producers • Key areas in synthetic DBM processing • Energy consumption • Environment • Consistency and characteristics of synthetic DBM • Capacity

11. Limited Availability of Synthetic DBMversus 10 000 000 t supply of natural DBM PRODUCERS Nedmag 165 kt PPL 85 kt Ube 165 kt Martin Marietta 40 kt Penoles 40 kt

12. Agenda • Synthetic versus Natural DBM process • Overview natural and synthetic DBM process • Main cost drivers synthetic DBM process • Overview of synthetic DBM producers • Key areas in synthetic DBM processing • Energy consumption • Environment • Consistency and characteristics of synthetic DBM • Capacity

13. Oil price will continue to increaseOil price in US$ per barrel(source: International Energy Agency)

14. Energy-related Investments 1 000 000 EUR per yearin Nedmag DBM ProductionRecent Nedmag Investments € 5 000 000 Process Automation € 3 500 000 Optimisation calcining € 500 000 Increased Plant Efficiency € 900 000 Reduced Hydration € 250 000

15. Agenda • Synthetic versus Natural DBM process • Overview natural and synthetic DBM process • Main cost drivers synthetic DBM process • Overview of synthetic DBM producers • Key areas in synthetic DBM processing • Energy consumption • Environment • Consistency and characteristics of synthetic DBM • Capacity

16. Environmental Factors impacting Synthetic DBM Production Emission Regulations(NOx, CO2, SO2) Effluent Regulations Synthetic MgO Producers Dust Regulations Other

17. High Environmental Investments >> 1 000 000 EUR per yearin Nedmag DBM ProductionRecent Nedmag Investments € 7 000 000 Dust filters € 3 000 000 Exhaust Gas Scrubbers € 2 900 000 Emission Control € 400 000 Noise Reduction € 700 000

18. Agenda • Synthetic versus Natural DBM process • Overview natural and synthetic DBM process • Main cost drivers synthetic DBM process • Overview of synthetic DBM producers • Key areas in synthetic DBM processing • Energy consumption • Environment • Consistency and characteristics of synthetic DBM • Capacity

19. Consistency Focus on: Technology Raw materials (brine and dolime) Automation Process control Investments over € 1 500 000 per year

20. Consistency:major characteristics very stable over time CaO % < 0,8% every year CaO % in nedMag 99 (yearly average)

21. Consistency:major characteristics very stable over time SiO2 % < 0,15% every year SiO2 % in nedMag 99 (yearly average)

22. In cement applications,Nedmag has the best product Very low lime content < 0.9%(to prevent formation of low melting calcium aluminates) Very homogeneous distribution of lime(higher lime content cannot be corrected by higher silica content, because lime silicates are not stable enough to prevent formation of calcium aluminates)High magnesia content 98.5% High density 3.4 (low porosity to prevent infiltration of alkali and of lime from cement clinker)

23. Nedmag is exceptional in Mag-Spinel Bricks due to low lime and high magnesia MgO content (%) NEDMAG 99 Penoles Magnesita M30 PPL Chinese Best DBM QMAG Super QMAG Extra Kümas Extra QMAG HFE CaO (%) Source: Value Added Europe

24. 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

25. Choice of synthetic DBM supplierdepends on technical requirements,specific to each application Nedmag synthetic DBM especially fit for MagSpinel products in Cement applications, Excellent fit for MagCarbon products in Steel applications

26. Agenda • Synthetic versus Natural DBM process • Overview natural and synthetic DBM process • Main cost drivers synthetic DBM process • Overview of synthetic DBM producers • Key areas in synthetic DBM processing • Energy consumption • Environment • Consistency and characteristics of synthetic DBM • Capacity

27. Nedmag has increasedits capacity to 165 000 t

28. Cement demand will increase by 5 % per year on averageCement demand in billion MT(Source: Cembureau)

29. Steel demand will increase by 4 % per year on averageSteel demand in billion MT(Source: World Steel Association)

30. 1 Million T Synthetic DBM Capacity Closures Company Country Date Technology MT pa Steetley UK1991 Seawater 100 000 National Refractories USA 1994 Seawater 100 000 Sardamag Italy 1994 Seawater 70 000 Penoles Mexico 1994 Seawater 70 000 Shin Nihon Japan 1995 Seawater 100 000 Birla India 1998 Seawater 50 000 Asahi Glass Japan 1999 Seawater 30 000 Ube Industries * Japan 1990’s Seawater 200 000 Martin Marietta * USA 1990’s Brine 50 000 Cogema Italy 2003 Seawater 50 000 Harbison Walker USA 2003 Brine 100 000 Jormag Jordan 2005 Brine 40 000 Dead Sea Periclase Israel 2005 Brine 40 000 TOTAL 1 000 000 * still producing DBM at reduced capacity

31. Future supply-demand for synthetic DBM not balanced? Higher demand for cement and steel Lower supply for synthetic DBM Nedmag studying future capacity expansion

32. Link to movie (repackage movie in 3 minutes)

33. Thank you!