Boron and Borates Market Research in The

The association of independent consultants in mineral resources, metallurgy and chemical industry ______

Boron and Borates Market

Research in the CIS

Moscow May 2009

Boron-Containing Products Market Research in the CIS Contents Annotation...... 7

INTRODUCTION...... 8

I. Brief characteristics of world market of boron (reserves, production, prices) ...... 12 I.1. Reserves ...... 12 I.2. Mining and production...... 14 I.3. Consumption ...... 17 I.4. Pricing ...... 18

II. Reserves and deposits of boron in the CIS...... 21

III. Boron: mining and production...... 24

IV. Current standing of company-producers of boron products in the CIS...... 28 IV.1. CJSC Mining-chemical combine «Boron» (Dalnegorsk, Primorsky region, Russia) ...... 28 IV.2. JSC "Yuzhno-Uralsky cryolite plant" (Kuvandyk, Orenburg Region, Russia) ...... 39 IV.3. JSC "KazInvestNedry" (Atyrau Region, Kazakhstan)...... 42

V. Foreign trade operations in boron products...... 44 V.1. Volume of export-import of boric acid in Russia in 1999-2008...... 44 V.2. Tendencies and features of export-import supplies of boric acid in Russia in 1999-2008...... 45 V.3. The main directions of export-import supplies ...... 46 V.4. Export-import of boron products in Russia in 2006-2008 ...... 50 V.5. Export-import of boron products in Ukraine...... 53 V.6. Dynamics of export-import prices in Russia...... 58 V.7. Export-import prices on boron products in Ukraine ...... 65

VI. Domestic consumption of boron products in Russia ...... 68 VI.1. Supply-demand balance of boron-containing ores in Russia...... 68 VI.2. Supply-demand balance of boric acid in Russia ...... 69 VI.3. Pattern of consumption of boric acid in Russia ...... 71 VI.4. The main end-uses of boric acid ...... 73 VI.4.1. Production of fiberglass and glass...... 73 VI.4.2. Production of enamels...... 79 VI.4.3. Production of ceramic ware...... 82 VI.4.4. Metallurgical industry...... 84 VI.5. The main company-consumers, their projects ...... 86 VI.5.1. JSC "OSV Steklovolokno (Fiberglass)" (former JSC "Saint Gobain Vetrotex Steklovolokno ",(Gus’-Khrustal’ny, Vladimir Region) ...... 87

2 Boron-Containing Products Market Research in the CIS

VI.5.2. JSC "Tuimazysteklo"(Tuimazy, Bashkortostan)...... 90 VI.5.3. JSC "STEKLONiT"(Ufa, Bashkortostan)...... 94 VI.5.4. JSC "Volgograd ceramic plant"(Volgograd)...... 97 VI.5.5. JSC "Volzhsky pipe plant"(Volzhsky, Volgograd Region) ...... 101

VII. Prospects and forecast of production, export, import and consumption of boron- containing products in CIS countries up to 2015...... 103

Appendix 1: Contact information on company-producers of boron products Appendix 2: Contact information on company-consumers of boron products

3 Boron-Containing Products Market Research in the CIS List of Tables Table 1: Reserves of boron-containing ores in the world, mln t* (in equivalent of В2О3) Table 2: The main boron minerals, occurring in its payable deposits Table 3: Mining of boron-containing ores in the world in 1998-2008, kt* Table 4. Capacities of the main enterprises of Eti mine on manufacture of boron- containing products Table 5: World prices on boron products Table 6: Geographic location of balance reserves of boron ores in Russia Table 7: Requirements, imposed on quality of commodity datolite concentrate of CJSC GKhK «Boron» Table 8: Mining of boron-containing ores in the CIS in 1996-2008, kt Table 9 Physico-chemical properties of boric acid of various grades in accordance with GOST 18704-78 Table 10: Production of boric acid in the CIS in 1996–2008, kt Table 11: The main kinds of products, manufactured by CJSC «Boron» in 2002- 2008, kt Table 12: Domestic supplies of boric acid of CJSC «Boron»’ production in 2002- 2008, t Table 13: Share of export of boric acid in total volume of its production by CJSC «Boron» in 1999-2008 Table 14: Geography of export supplies of CJSC «Boron» in 1999-2008, t Table 15: Export supplies of calcium borate of CJSC «Boron» in 2006-2008, t Table 16: Supplies of borate ores from Kazakhstan to JSC "Yuzhno-Uralsky cryolite plant" in 1999-2005 Table 17: Share of export of boric acid in total volume of its production by JSC «Yuzhno-Uralsky cryolite plant» in 1999-2004, t, % Table 18: Geography of export supplies of boric acid by JSC «Yuzhno-Uralsky cryolite plant» in 1999-2005, t, $/t Table 19: Domestic supplies of boric acid of JSC «Yuzhno-Uralsky cryolite plant» in 2002-2004, t Table 20: Mining of borate ores by JSC "Inderbor" in 1994-1997, kt Table 21: Foreign trade in boric acid in Russia in 1999-2008, t Table 22: Share of export of boric acid in total volume of its production in Russia in 1999-2008, kt, % Table 23: Russian suppliers of boric acid in 1999-2008, t Table 24: Country-consumers of Russian boric acid in 1999-2008, t Table 25: Country-suppliers of boric acid to Russia in 1999-2008, t Table 26: Company-suppliers of boric acid to Russia in 2006-2008, t Table 27: Russian adressees of boric acid in 2006-2008, t Table 28: Supplies of boron-containing products to Russia in 2006-2008, t Table 29: Russian consumers of sodium perborate in 2006-2008, t Table 30: Export of boron-containing products by Russia in 2006-2008, t Table 31: Foreign trade in boric acid in Ukraine in 2000-2008, t Table 32: Country-suppliers of boric acid to Ukraine in 2000-2008, t

4 Boron-Containing Products Market Research in the CIS Table 33: Ukrainian consumers of imported boric acid in 2003-2008, t Table 34: Supplies of boron-containing products to Ukraine in 2006-2008, t Table 35: Ukrainian consumers of borax and sodium perborate in 2006-2008, t Table 36: Export of boron-containing products by Ukraine in 2006-2008, t Table 37: Export-import prices on boric acid in Russia in 1999-2008, $/t Table 38: Import prices on boric acid for Russian consumers in 2006-2008, $/t Table 39: Prices of company-suppliers of boric acid to Russia in 2006-2008, $/t Table 40: Export prices on Russian boric acid in 1999-2008, $/t Table 41: Export prices for country-consumers of Russian boric acid in 2006-2008, $/t Table 42: Export prices on boron-containing products, supplied by Russia in 2006- 2008, $/t Table 43: Import prices on boron-containing products, supplied to Russia in 2006- 2008, $/t Table 44: Import prices on sodium perborate for Russian consumers in 2006-2008, $/t Table 45: Prices of country-suppliers of boric acid to Ukraine in 2006-2008, UAH/t Table 46: Import prices on boric acid for Ukrainian consumers in 2006-2008, UAH/t Table 47: Import prices on boron-containing products, supplied to Ukraine in 2006- 2008, UAH/t Table 48: Import prices on borax and sodium perborate for Ukrainian consumers in 2006-2008, UAH/t Table 49: Export prices on boron-containing products, supplied by Ukraine in 2006- 2008, UAH/t Table 50: Consumption of boron-containing ores in Russia in 1999-2008, kt Table 51: Volumes of consumption of boric acid in Russia in 1999-2008, t Table 52: Content of B2O3 inorganic glass of special proprties, weight % Table 53: Production of fiberglass and supplies of boric acid in 2006-2008, t Table 54: Volume of production of medical glassware in Russia in 2001-2008 Table 55: Production of medical glass tubes and supplies of boric acid in 2006-2008, t Table 56: Supplies of boric acid to Russian producers of enamels in 2002-2008, t Table 57: Flux composition for oxy-acetylene gas welding and braze welding of iron, % Table 58: Flux composition for oxy-acetylene gas welding of copper Table 59: Chemical composition of ferroboron according to GOST 14848-69 Table 60: The main consumers of boric acid in Russia in 2002-2008, t Table 61: Supplies of boric acid to "Saint Gobain Vetrotex Steklovolokno" in 2002- 2008, t Table 62: Production of medical glass by JSC "Tuimazysteklo", 1998-2008 Table 63: Supplies of boric acid to "Tuimazysteklo" in 2002-2008, t Table 64: Supplies of boric acid to "STEKLONiT" in 2002-2008, t Table 65: Production data of JSC "Volgograd ceramic plant" in 2005-2008 Table 66: Supplies of boric acid to "Volgograd ceramic plant" in 2002-2008, t Table 67: Supplies of boric acid to "Volzhsky pipe plant" in 2002-2008, t

5 Boron-Containing Products Market Research in the CIS

List of Figures

Figure 1: Dynamics of mining of boron-containing ores in the CIS in 1994-2008, kt Figure 2: Dynamics of mining of datolite ores and production of boric and sulfuric acid by CJSC «Boron» in 1996-2008, kt Figure 3: Dynamics of production of boric acid by JSC "Yuzhno-Uralsky cryolite plant" in 1993-2008, kt Figure 4: Dynamics of export-import operations in of boric acid in Russia in 1999- 2008, kt Figure 5: Share of APR countries in consumption of H3BO3 exported by Russia in 2002-2008, % Figure 6: Volume of import of boric acid (kt) and dynamics of average import prices ($/t) in Ukraine in 2000-2008 Figure 7: Dynamics of import prices ($/t) on boric acid and volume of import (kt) in Russia in 1999-2008 Figure 8: Dynamics of export prices ($/t) on boric acid and volume of export (kt) in Russia in 1999-2008 Figure 9: Dynamics of Russian export prices on boric anhydride in 1999-2008, $/t Figure 10: Supply-demand balance of boric acid and borax in Russia in 2005-2008 Figure 11: Pattern of consumption of boric acid in Russia in 2008, % Figure 12: Changing pattern of consumption of boric acid in Russia in 2002-2008, % Figure 13: Dynamics of production of fiberglass and its products in Russia in 1998- 2008, kt Figure 14: Dynamics of production of glazed ceramic tile in Russia in 1998-2008, mln m2 Figure 15: Dynamics of production of fiberglass and its products by "Saint Gobain Vetrotex Steklovolokno" in 1998-2008, kt Figure 16: Dynamics of production of fiberglass and its products by JSC "STEKLONiT" in 2000-2008, kt Figure 17: Pattern of JSC "STEKLONiT" products, % Figure 18: Dynamics of production of ceramic tile by "Volgograd ceramic plant" in 2000-2008 Figure 19: Forecast of production, export and import of boric acid up to 2015, kt

6 Boron-Containing Products Market Research in the CIS Annotation

The report is devoted to investigation of current standing of market of boron products in the CIS and forecast of its development. The report is composed of 7 Sections, contains 106 Pages, including 19 Figures, 67 Tables and 2 Appendices. This work is a desk research. As information sources, we used data of Federal Service of State Statistics of Russia (Rosstat, FSSS of Russia), State Committees on Statistics of CIS countries, Federal Customs Service of Russia (FCS of Russia), State Customs Committee of Ukraine (SCC of Ukraine), railage statistics of Russia. Besides, data of sectoral and regional mass-media, yearly and quarterly reports of companies, as well as web-sites of enterprise-producers and consumers of boron products. The first Section of the report presents data on world market of boron (reserves, production, prices). The second Section of the report is devoted to description of boron deposits in the CIS. The third Section of the report presents data on mining and production of boron in the CIS. The fourth Section of the report presents data on current standing of producers of boron products in the CIS. The fifth Section is devoted to foreign trade operations in boron products in Russia and Ukraine. In addition, it analyses export-import prices on boron acid, borax, calcium borate and other products. The sixth Section of the report describes consumption of boric acid in Russia. The Section presents supply-demand balance of the product, sectoral pattern of consumption and its change, as well as current standing and prospects of development of the greatest enterprise-consumers. The seventh Section of the report presents forecast of Russian boric acid market development (production, export, import and consumption) up to 2015. Appendix presents addresses and contact information of enterprises, producing and consuming boron acid.

7 Boron-Containing Products Market Research in the CIS INTRODUCTION

Boron is a naturally occurring element that is found in the oceans, rocks, coal, shale, and some soils. It is widely distributed in nature, with concentrations of about 10 mg/kg in the Earth's crust (range: 5 mg/kg in basalts to 100 mg/kg in shales) and about 4.5 mg/liter in the ocean. The most important commercial borate products and minerals are borax pentahydrate, borax, sodium perborate, boric acid, colemanite, and ulexite. Boron compounds of commerce in approximate decreasing order of usage are as follows: Borax pentahydrate (disodium tetraborate pentahydrate): Na2[B4O5(OH)4]x3H2O (Na2B4O7 x 5H2O) Borax (disodium tetraborate decahydrate) Na2[B4O5(OH)4]x8H2O (Na2B4O7x10H2O) Ulexite NaCa[B5O6(OH)6] x 5H2O (Na2O x 2CaO x 5B2O3 x 16H2O) Colemanite Ca[B3O4(OH)3] x H2O (2CaO x 3B2O3 x 5H2O) Sodium perborate tetrahydrate Na2[B2O4(OH)4] x 6H2O (NaBO3 x 4H2O) Sodium perborate monohydrate Na2[B2O4(OH)4] (NaBO3 x H2O) Boric acid B(OH)3 (H3BO3) Anhydrous borax Na2B4O7 (amorphous) (disodium tetraborate) Boron oxide B2O3 (amorphous) Boron B. Sodium perborates are persalts that are hydrolytically unstable because they contain characteristic boron-oxygen-oxygen bonds that react with water to form hydrogen peroxide and stable sodium metaborate (NaBO2 x nH2O). This hydrolysis reaction is the basis of the use of perborates as bleaches in detergents at high (70- 100°C) temperature. At lower washing temperatures (25-70°C), activators are needed; these react with peroxide to give peracids, which are stronger oxidants and give bleaching effects at lower temperatures. Boric ores basic application is production of boric acid, calcium borate, borax technical, boric fertilizers. The boric acid (B2O3 percentage - 56 %) is the basis for manufacture of many boron products: boric anhydride (B2O3 - 100 %), borides, perborates, boranes, fluoroboron compounds. Economic deposits of borate minerals are rare and are usually found in arid desert regions with a geological history of volcanic and/or hydrothermal activity. Major world deposits are found in Turkey, the USA, Argentina, Russia, Chile, China, and Peru. The most abundant boron mineral is tourmaline, an aluminium borosilicate that contains about 3.1% boron. It is not a practicable source of usable boron, as it is widely distributed as a minor component of rocks. Economic borate minerals include tincal, kernite, colemanite, and ulexite. The two largest producers of borate minerals in the world are the Turkey and USA. Further mining and production facilities exist in Argentina, Bolivia, China, Chile, Peru, and Russia. Most US production of borates occurs in California, where colemanite, ulexite, tincal, kernite, and brines are

8 Boron-Containing Products Market Research in the CIS processed. These minerals are also processed elsewhere in the world, as are ascharite, hydroboracite, datolite, etc. Borates abound in industrial systems for two reasons. First, they're safe. Used for centuries, borates pose no risk to people, animals or the environment under normal handling and use. Even those who handle borates every day have experienced no adverse health effects. Second, they're versatile. In some applications, there is simply no substitute for borates. In other products and processes, their natural functions impart a wide range of performance, cost, environmental health and safety advantages. Main areas they affect: metabolism agent, bleaching agent, buffering agent, dispersing agent, vitrifying agent, inhibiting agent, flame-proofing agent, and neutron absorbing agent. Metabolizing Effects – In certain organisms, borates can inhibit metabolic processes. This makes them useful in controlling insects, bacteria and fungi in everything from construction timbers to cosmetics. Bleaching Effects – Another key chemical effect comes into play in laundry detergents and other cleaning products, where borates are important components in bleaching and stain removal. Buffering Effects – The chemical properties of borates serve to balance acidity and alkalinity in many applications. Detergents, fireworks and film processing solutions all rely on borates for a stable pH. Dispersing Effects – Borates are able to bond with other particles to keep different ingredients dispersed evenly and are used to control viscosity in paints, adhesives and cosmetics. Vitrifying Effects – Borates modify the structure of glass to make it resistant to heat or chemical attack. Similarly, they facilitate the production of ultra-thin LCD screens, functional fiberglass and beautiful ceramic tiles and glazes. Inhibiting Effects – Borates interact with surfaces containing iron to form a coating that protects the metal from corrosion. They are important additives in products as diverse as antifreeze and aerosol cans. Flame-Proofing Effects – Combined with zinc, borates are used to retard flames and suppress smoke in polymers. Borates also act as a flame retardant in cellulose insulation. Neutron-Absorbing Effects – Borates absorb neutrons in applications ranging from nuclear containment shields to treatments for cancer. While borate applications number in the thousands, chief among them are: Agriculture: Boron is an essential micronutrient for plants, vital to their growth and development. Without sufficient boron, plant fertilization, seeding and fruiting are not possible. On every continent of the world, crop yields and food quality are diminished due to insufficient boron concentrations in the soil. These deficiencies can be corrected with borate fertilizers. In areas of acute deficiency, borates can increase crop yields by 30 to 40 percent. Ceramics: Borates have been an essential ingredient in ceramic and enamel glazes for centuries, integral to affixing glazes or enamels, and enhancing their durability and luster. Borates now are gaining acceptance as an essential ingredient in

9 Boron-Containing Products Market Research in the CIS ceramic tile bodies, allowing manufacturers to use a wider range of clays, heightening productivity and decreasing energy usage. Detergents and Personal Care Products: Borates enhance stain removal and bleaching, stabilize enzymes, provide alkaline buffering, soften water and boost surfactant performance in detergents and cleaners. Their biostatic properties control bacteria and fungi in personal care products. New trials demonstrate that adding borates to laundry soap bars significantly improves their cleaning action and reduce levels of dirt redeposition. Diet: Not surprisingly, people get the boron they need by eating plant-derived food. Studies indicate that people in a wide variety of cultures consume one to three milligrams of boron per day through a combination of foods and drinking water in their local diets. Although it has not been proved yet that humans need boron to live, there is almost universal agreement in the scientific community that boron is nutritionally important to maintain optimal health. Fiberglass: Borates are an important ingredient in both insulation fiberglass – which represents the largest single use of borates worldwide – and textile fiberglass, used in everything from circuit boards to surfboards. In both products, borates act as a powerful flux and lower glass batch melting temperatures. They also control the relationship between temperature, viscosity and surface tension to create optimal glass fiberization. Glass: Borosilicate glass is the foundation for all heat-resistant glass applications and the myriad products they make possible – from cathode ray tubes to Pyrex® cookware. Borates increase the mechanical strength of glass, as well as their resistance to thermal shock, chemicals and water. Polymer Additives: Zinc borates are used primarily as a fire retardant synergist in plastics and rubber applications. They also can function as smoke and afterglow suppressants, anti-tracking agents, and can be used in polymers requiring high processing temperatures. Zinc borates can be found in polymers ranging from electrical parts and automobile interiors to wall coverings and carpeting. Wood Treatments: Borate-treated wood is on the rise as a safe and long- lasting method to protect homes and other structures from wood-destroying organisms. Borate-based preservatives can be used to treat solid wood, engineered wood composites and other building materials like studs, plywood, joists and rafters. Borates prevent fungal decay and are deadly to termites, carpenter ants and roaches – but are safe for people, pets and the environment. An approximate pattern of world demand or borates is as follows: - insulation fiberglass, textile fiberglass and heat-resistant glass (43% of world demand); - detergents, soaps and personal care products (17% of world demand); - ceramic and enamel frits and glazes, ceramic tile bodies (12% of world demand); - agricultural micronutrients (5% of world demand); - wood treatments, polymer additives and pest control products (23%).

10 Boron-Containing Products Market Research in the CIS Boron nitride and carbide are used for manufacture of abrasive and semi- conductor materials, high-melting super-hard alloys, as neutrons absorbers in nuclear reactors. Besides, boron is used in manufacture of permanent magnets on the basis of a three-component alloy of neodymium, iron and boron; electric transformers, in personal stereo systems and players for compact discs; scanners. Perspective area is manufacture of the amorphous ferric-silicon-boric alloys used for manufacturing transformer cores. More than 230 boric minerals are known in nature. The largest part belongs to the borate class, as well as borosilicates and boron-aluminosilicates, which refer to silicate class and are less widespread. All of them are boron-oxygen compounds, and only four boron minerals belong to oxygen-free compounds - fluorides. Among boron minerals only about 20 have practical value. Mainly they are calcium borosilicates and Mg, Ca, Na, K borates. Based on formation conditions the boron deposits are subdivided into endogenous, endogenous-exogenous and exogenous. Most of Russian/CIS payable reserves of boron-containing ores falls to Endogenous deposits, associated with calcium and magnesian boron-containing skarns. In the deposits, the following boron-containing minerals dominate: datolite (CaB(OH)[SiO4]), danburite (CaB2[Si2O8]); other boron minerals are presented by suanite (Mg2B2O5), kotoite (Mg3(BO3)2), ludvigite-gulsite 2+ 3+ 3+ 4+ 4+ ((Mg,Fe )2(Fe ,Al ,Sn ,Ti ,Mg)[BO3(O2)]), ssaibelite (Mg2OH[B2O4(OH)]), etc. A group of endogenous-exogenous deposits is presented by volcanogenic - sedimentary deposits, formed in low-flowing and undrained lakes located near volcanoes in arid climate conditions. Boric minerals are represented by borates of Ca, Na and Na-Ca: colemanite, tincal, konite, borax, kernite, etc. Exogenous deposits of boron are connected with deposits of marine potassium-magnesium salts (halogenic) or with processes of their weathering (eluvial). The basic boron minerals are kaliborite, hydroboracite, preobrazhenskite, boracite, ulexite, ascharite, etc. In Russia, exogenous deposits have no industrial value. Besides the ore deposits, boron sources are also found in mineral waters and reservoir waters of oil and gas deposits. Based on formation condition, mineral composition, technological properties the boric ores are subdivided into borosilicate, borate, complex borate - magnetite and tin - boric. The largest and richest sources of borate ores in nature are connected with deposits of volcano-sedimentary type, which provides 90 % of global boron mining. The ores are easy-dressable, complex - containing also bentonites, zeolites, sulfur, antimony, strontium, halite etc., which are also extracted from them. In Russia they have not been found as yet. In the Russian Federation borosilicate and complex borate - magnetite ores, connected with endogenous deposits of skarn type, are of the basic commercial value.

11 Boron-Containing Products Market Research in the CIS

I. Brief characteristics of world market of boron (reserves, production, prices)

I.1. Reserves The main reserves of borates in the world are available in Turkey and USA. USGS estimates world reserves of borates of 309 mln t (ignoring Russia and Kazakhstan), whereas National Boron Research Institute (Turkey) gives the value of 756 mln t (Table 1). The difference is mainly connected with different estimation of boron-containing ore reserves in Turkey; in this situation we consider own Turkish data on the country reserves to be more reliable, and, thus, the world reserves estimate of National Boron Research Institute seems us more reliable too.

Table 1: Reserves of boron-containing ores inn the world, mln t* (in equivalent of В2О3) Country Total reserves Data of National Boron Research Institute Data of US Geological Survey (Turkey) Turkey 150 563 USA 80 80 China 47 36 Chile n. a.** 41 Bolivia n. a 15 Peru 22 22 Argentina 9 9 Iran 1 n. a. Total 309 756 * - without CIS ** n. a. means “data are not available” Source: InfoMine on the basis of data of US Geological Survey (USGS) and National Boron Research Institute (Turkey)

The Kramer deposit (USA), located in the center of Mohave Desert approximately 160 km to the northeast of Los Angeles, is one of the largest boron deposits of the world. From the beginning of the operation (1926) and by present time the deposit is considered to be the leading world supplier of boron raw material. The deposit is confined to lake sediments of Miocene period. The main ore body of the deposit lying among blue-grey clay slates at a depths from 40 (northern and western flanks) down to 340 m (southern flank), is presented by a stratum lode of thickness from 24 up to 90 m (about 45 - 60 m in average), covering 2 km2 area. It consists of concordant layers and sublayers of thickness up to 10 cm as well as lenses, tumors and inclusions of borax, kernite, tincalkonite; syrlesite, ulexite and proberite are less abundant. These layers and sublayers are divided by thin layers of montmorillonite clay and volcanic tuff. At rich ore sites, average contents of В2О3 constitutes 25-30 % and more. The ores are mined in the quarry, then are crushed, sieved and dissolved to obtain saturated brine with its following filtering. As a result

12 Boron-Containing Products Market Research in the CIS of this liquid crystallization, refined crystals of borax decahydrate and pentahydrate are formed. In Turkey the largest boric resources deposit known now is Kyrka (Sarikaya), located in province Askishekhir in 240 km from Ankara. It is confined to Pliocene lake sediments. Lake carbonate - clay sediments with sublayers of volcanic ash material occupy the area of about 10 km2, lying on volcanic basement, composed of basic and acid tuffs and lavas. The lake sediments are completely overlapped by massive neogenous limestones several ten meters thick. Now in the ore field Kyrka about 450 thousand tpy of mainly sodium-borate ores are mined; they are delivered to the plant in Bandirma, where various boric compounds are produced including boric acid, borax decahydrate and pentahydrate. In South America, large boron reserves are available in Argentina: in Salta Province (deposits Tincalayu and Sijes), as well as in Province Zhuzhui (ephemeral lakes Salars Cauchari and Diabillo). The main minerals here – colemanite, hydroboracite, kernite, tincal and ulexite. China also has large potentiality in boron minerals mining – above 100 boron deposits have been discovered in the country (in 14 Provinces). 80% of the deposits are located in north-eastern Lyaonin Province and western Tsinhai Province. Borate deposits are also available in a number of other countries, for instance in Bolivia, Chile. Recently large boron deposits were discovered in Kosovo. In Table 2, the main boron minerals occurring in its payable deposits are shown. Table 2: The main boron minerals, occurring in its payable deposits Content of Group Mineral Chemical composition В2О3, % Boric acid (sassolite) В(ОН)3 56,4 . borax (tincal) Na2В4О7 10Н2О 36,5 Sodium borates . tincalkonite Nа2В4О7 5Н2О 47,8 . kernite Na2B4О7 4Н2О 51,0 . Sodium-calcium ulexite NaCaB5O9 8Н2О 43,0 . borates probertite NaCaB5O9 5H2O 49,6 . inyoite Са2В6О11 13H2O 37,6 . Calcium borates colemanite Са2В6О11 5Н2О 50,8 . pandermite Ca4B10O19 7Н2О 49,8 kurtchatovite Са6Мg5МnВ12О30 40,7 Calcium . sakhaite Са12Мg4(СО3)4(ВО3)7Сl(ОН)2 Н2О 18,5 (potassium)- . kaliborite КМg2[В3О3(ОН)5]2В5O6(ОН)4 2Н2О 57,0 magnesium borates . hydroboracite CaMgB6O11 6Н2О 50,6 boracite Mg3B7O13C 62,2 . ssaibelite Mg2B2O5 Н2О 41,4 kotoite Мg (ВО ) 35,5 Magnesium Borates 3 3 2 suanite Mg2B2О5 46,3 . preobrazhenskite Mg8[B5О7(OH)4]2 Н2О 51,2 ludvigite (Mg,Fе)2Fе(ВО3)О2 12-17 datolite Ca B (SiО ) (OH) 21,8 Borosilicates 2 2 4 2 8 danburite СаВ2(SiО4)3 28,3 axinite Ca (Mg,Fe)Al BSiО О (OH) 5-8 Boroaluminosilicates 2 2 4 15 tourmaline (Na,Ca)(МgА1)6[В3А13Si6(О,ОН)30] 7-12 Source: scientific-technical literature

13 Boron-Containing Products Market Research in the CIS I.2. Mining and production Volume of world mining of boron minerals steadily increases in latest years (Table 3), and only in 2002 slight decline in the mining of boron-containing ores took place (by 3.3% year-on-year). From preliminary estimation of USGS the mining of borates in 2007 reached 4.98 mln t, slightly above the 2006 level.

Table 3: Mining of boron-containing ores in the world in 1998-2008, kt* Country 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Turkey USA Argentina Chile China Bolivia Peru Iran Germany Total * - ignoring the mining in the CIS Source: USGS (2008- estimate)

The bulk of world boron resources is mined in Turkey and USA - around 70% of the world total in 2006-2008.

Turkey. State-owned Eti Mine Works General Management, monopoly producer of boron products at domestic market and great exporter, actively penetrates into European markets. After a plant on production of boric acid with capacity of 100 kt per year was built and launched in 2004 in Emet city Turkey became the greatest producer of boric acid in the world. The company owns 5 enterprises on mining and processing of boron ores (Table 4).

Table 4: Eti Mine capacities on boron products by plants Capacity, kt Capacity, Location Mined resources Products per year kt per year Sodium tetraborate decahydrate Colemanite Sodium perborate Bandirma Ulexite Boron oxide Boric acid Colemanite Boric acid Emet 28-30% B2O3 Purified colemanite Purified sodium tetraborate Kirka Tincal pentahydrate (Etibor-48) Ulexite Concentrated colemanite and Bigadic Colemanite ulexite 29-31% B2O3 Grinded colemanite and ulexite Kestelek Colemanite 29% B2O3 Concentrated colemanite Source: "InfoMine " on the basis of Eti Mine data

14 Boron-Containing Products Market Research in the CIS

In 2007 Eti Mine produced 2.13 mln t concentrated ores and manufactured 1.09 mln t boron-containing products from them. In 2008, from preliminary data, 2.25 mln t ores were mined. Europe is traditional market for Eti mine, and in the latest 5 years the company supplies to the region increased, including at the expense of supplies to Russia. Eti Mine supplies to Europe, including china, also significantly increased. At the same time, Eti Mine decreased supplies to USA and to domestic consumers. One of new projects of the company became launching a line of calcined borax manufacture in 2007. The company will produce around 200,000 tpy of the product, which is expected to find its market in sector of insulation material manufacture. In nearest future Eti mine plans to start zinc borate production. The project is scheduled on 17 years, from 2005 to 2017, and at the first stage, production volume of 10,000 tpy is planned.

USA In the United States two companies - US Borax and Searles Valley Minerals are engaged in manufacture of boron products. Company Searles Valley Minerals manufactures borax (decahydrate, pentahydrate, anhydrous) and boric acid from brines of Serlz Lake in St. Bernardino. The company brand is “Three Elefants”. At present time, controlling interest in the company is owned by Indian company Nirma Ltd. US Borax is a daughter company of Rio Tinto Minerals (London), being, in turn, a part of Rio Tinto Group – Australian-British concern. Rio Tinto Minerals was found in 2006 by merger of companies Rio Tinto Borax, Luzenac Talc and Dampier Salt. US Borax develops the world's largest borate deposit located in California. The US Borax has branches practically worldwide: Borax Argentina, Borax Espana, Borax Rotterdam, Borax Italia, etc. The US Borax share in the world boric acid market constitutes above 40%. The company sales the product under brand name Optibor. The main plant on boric acid manufacture is located in Boron town (California), the plnt capacity is 360,000 tpy. The plant also produces aunhydrous borax and boron oxide. Besides the products, US Borax produces zinc borates at plant in Wilmington (Northern California – 12,000 tpy in average. Experts consider the US Borax products are the most pure in the world, and the production is the most economically and environmentally efficient. From USGS data, in 2008 USA exported 260 kt boric acid (248 kt in 2007) and around 470 kt sodium borates (446 kt in 2007). The main country-importers were Netherlands, China, Canada, Spain, Malaysia, Japan, India. As for USA imports, the bulk of it belongs to ores: ulexite (90 kt in 2008) and colemanite (27 kt in 2008), as well as boric acid (around 65 kt in 2008).

15 Boron-Containing Products Market Research in the CIS India There are rather many boron product manufactures in India. World-known producer is Borax Morarji, found in 1963, its capacities are 25 kt of borax, sodium metaborate and ammonia pentaborate plus 8 kt of boric acid per year. The main domestic competitors are Gujarat Boron Derivatives Pvt Ltd, National Peroxade Ltd and Indo Borax & Chemicals Ltd. By 2009-2010 in region Khamman a plant on boric acid production is to be built under the aegis of Nuclear Power Agency of India

Chile Company Quiborax develops the ulexite deposit in Salar-de-Surire in the north of Chile with reserves of several million t of the mineral, containing 25-32 % of B2O3. Its productivity is 600 thousand t of the ores per year. In the latest years Quiborax invested $17 million in the modern technology and automation of the plant to upgrade processing of boron resources. In 2004 in northern part of Chile in 85 km from Kalaman (Salar de Tara district) a new colemanite mine was launched. It produces: - Granulated ulexite 32 % B2O3 (10 % B) for preparation of dry plug-back mixtures and for agricultural needs; - Ground ulexite 30-40 % B2O3 with grain size below 1 mm; - and concentrate of 50-60 % B2O3 with grain size below 0.5 mm.

Argentina Borax Argentina S.A. is the leading Argentina borates manufacturer and their largest exporter to the USA. Borax Argentina mines borates at three deposits: Tinkalaya and Sidzes in Salta province and Povinir in Judjui province and yields around 100 thousand t of borates per year. The main products – colemanite, hydroboracite, kernite, tincal and ulexite. Tinkalaya deposit was discovered in 1976 and is the largest in Argentina, developed by open-cut mine. Its sizes: length – 1.5 km, width - 500 m and depth - 100 m. Clay overburden averages 50 m. In 2005 in Olakapato (Salta province) a new ulexite mine was launched. The mined ulexite is delivered to Saltato (180 km from the mine) where the boric acid production plant with the capacity of 4800 t per year was erected. Company Rio Tinto Borax has invested $2.6 million in this plant construction that started in August 2002, and the boric acid manufacture started in 2003. The second phase of the plant construction which will increase the capacity up to 12 000 t per year is in progress. The U.S. Borax's Salar del Rincon Company has developed the project of borates extraction from brine of salt lakes. The lake where borates are extracted now is in northwest of Argentina at altitude of 3700 m above sea level.

Bolivia Contents of B2O3 in ulexite ores of Kimika del Borax deposit, Rio Grande, constitutes 32-36 %, and these ores have very low arsenic contents. Extraction is accomplished by Chilean company Quibora, volume of ulexite extraction constitutes approximately 25 thousand t per year. Kapina deposit with 25 - 32% contents of B2O3 is not exploited (its reserves are 10 million t of low-arsenic ulexite). Quiborax has a

16 Boron-Containing Products Market Research in the CIS plant to manufacture boric acid with the capacity of 35 thousand t per year in El Aguila, 60 km from Arica. Chilean Quiborax was also involved in ulexite extraction at Salarde Yumy deposit. However in June 2005 the Bolivian Ministry of hydrocarbon and mineral resources annulled the company licenses on the resources mining. The company submitted the claim against the Bolivian government. The loss estimation was carried out by the International Center on Settlement of Investment Disputes of the World Bank.

I.3. Consumption According to World Review, since 1970 world consumption of boron was doubled. By 2008, the consumption of borates reached 1.6 mln tonnes. At present time, the main end-use of boron compounds is glass industry, first of all, production of fiberglass. For instance, North-American glass industry consumes around 44% of world supply of boron. Detergents and soaps are the second greatest end-use of borates. The European market of detergents consumes more than 240 thousand t of sodium borate per annum. However, forthcoming restricting content of boron in drinking water in EC by 2013 may result in some depressing of boron use in detergents. In 2007, USA consumed 400 kt of boron-containing products (in equivalent of B2O3). Pattern of consumption of borates and other boron compounds in USA is as follows: glass and ceramics production – up to 70%, detergents and soaps – 5%, fireproof compositions – 4%, agriculture – 2%, other – 19%. Until recently, pattern of consumption of borates and other boron compounds in Turkey was as follows: glass industry – 40%, ceramic industry – 15%, and detergents and bleachers – 10%. However, in 2007 producers of detergents decreased considerably boron products consumption owing to strengthening standards on boron use in their products. The pattern in 2007 became as follows: glass industry – 43%, ceramic industry – 40%, detergents and bleachers – 2% and the rest belonged to other end-uses. Notice that only 7% of the products produced are consumed at domestic market, whereas 40% are exported to Europe and 25 % - to North America.