Business Scope
Niobium
A pioneer and leader in China’s niobium product market
Niobium (chemical symbol: Nb), a rare metal and a kind of rare resource of strategic importance, features stable chemical property, high melting point, corrosion resistance, excellent electrical conductivity and high thermal expansion coefficient. Boasting exceptional physical and chemical performance, niobium, only a trace of which is added in the steel, can significantly improve the strength, toughness, weldability, formability and fatigue resistance of steel. Niobium is widely used in steel, high-temperature alloys, super-conducting materials, battery materials, magnetic materials, optical materials and other fields in modern industry. It is an important basic material for the development of national economy.
As the exclusive distributor of Companhia Brasileira de Metalurgia e Mineracao (CBMM), the world’s largest supplier of niobium products, in China for over three decades, and accounts for approximately 80% of the domestic market share. CITIC Metal has secured long-term and stable supply of niobium which is of strategic significance to China, promoted the sustained growth of niobium consumption in China, and provided a strong support for the upgrade and green development of China’s steel industry.
The Company is committed to facilitating the application of niobium across China’s iron & steel and new materials sectors by driving sales through technology. Since the 1980s, CITIC has maintained strategic cooperation with CBMM, becoming the pioneer of promoting niobium technologies in China’s market and the contributor to the progress of niobium science and technology in China. Based on the CITIC-CBMM Microalloying Technology Center (the “Technology Center”), the two parties have successively launched over 150 research projects on industrial chain technology, set up three joint labs respectively with the University of Science and Technology Beijing, Shanghai University and the Central Iron & Steel Research Institute, and established the niobium steel scholarship in four universities focusing on the iron & steel discipline, including Northeastern University. Besides, the Technology Center is also the sponsor of CITIC Niobium Steel Technological Progress Award, one of the three major awards in China’s metallurgical industry. Thanks to the fruitful work of CITIC Metal and CBMM for decades, the foreign experts at the Technology Center, Mr. Jose Alberto de Camargo, Mr. Pascoal Bordignon, Dr. Malcolm Gray and Mr. Marcos Stuart, were successively honored the “Chinese Government Friendship Award”, the highest honor granted by the Chinese government to foreign experts, and were thus received by State leaders.
In technology promotion, CITIC Metal and CBMM promote the cooperation model of production, promotion, research and application via the Technology Center’s global platform, which greatly advances the development of high-performance metal materials in China and helps China’s iron & steel sector and its downstream industries to achieve material upgrading. Currently, China’s annual output of niobium-bearing high-performance steel has reached 90 million tons, which is widely applied in high-end manufacturing sectors including aerospace, ocean engineering, auto transport, energy and chemical engineering, engineering machinery and construction, greatly satisfying the country’s keen demands for high-end materials during economic development. China is now the world’s largest niobium consumer, accounting for over one third of the world’s niobium consumption.
In business development, CITIC Metal focuses on the fields of iron & steel and casting and expands the coverage to large and medium-sized iron & steel enterprises in China, becoming a technology and market leader. Winning China’s first-class iron & steel enterprises, including Baowu Group, Ansteel Group, TISCO and Shougang Group, as its major customers, CITIC Metal builds warehouses near the bases of customers across China to fully meet their demands. In recent years, the Company has been actively developing new application fields such as nanocrystalline, magnetic materials, batteries, aluminum alloys and optical glass, which further promotes the application and marketization of niobium.
In the future, CITIC Metal will stick to the strategy of driving sales through technology, further advance the application and promotion of niobium technologies, expand the capacity of China’s niobium market, and further cement the strategic cooperation with upstream and downstream partners across the industrial chain, thereby fully developing the potential of niobium in promoting green and low-carbon development of China’s iron & steel and new materials industries and helping build a stable and safe niobium industrial chain.
In September 2011, CITIC Metal, teaming up with Baowu Group (formerly known as Baosteel Group), Ansteel Group, Shougang Group and TISCO, established the Hong Kong-based China Niobium Investment Holdings Limited, and ac- quired a 15% equity stake of Companhia Brasileira de Metalurgia e Mineracao (CBMM), the world’s largest producer of niobium. CITIC Metal held a 33.3% stake in the consortium. Since the investment, CBMM has consistently delivered stable performance and good earnings and maintained high dividend payout ratio.
Niobium is of strategic importance to the national economy and defense. As a country with low niobium reserves, un- desirable grade, many paragenic ores and difficulties to develop, China is currently 95% reliant on foreign sources of niobium and the single largest consumer of CBMM. The investment has guaranteed stable supply of niobium to China, creating synergy with the Company’s niobium product lines and enhancing strategic ties between the Company and the downstream clients.
Founded in 1955 in Araxá, Minas Gerais, Brazil, CBMM has been recognized as the world’s largest and leading niobium producer. With more than 70% of the world’s niobium reserves, CBMM operates the largest and highest-grade niobium mine with the longest mine life for over 100 years based on the current production plan and lowest cash cost. Over the years, CBMM has been maintaining over 75% share of global niobium supply.