Magnesia Market Position Table of Contents

Magnesia Division Yusuke Saitou FGD Market so far and from now on

①Recent trend in the domestic FGD market in

②Chinese CCM supply situation to FGD market in Japan, Korea and

③Movement of FGD facilities coming up in

Trend of Power Supply Composition in Japan

Re-energy etc.:1.1 Re-energy etc.:3.2 Hydraulic power:8.5 Hydraulic power:9.0 Other gas: 1.1 Nuclear power Coal:25.0 Coal:31.0 :28.6 Just Before the After the Earthquake Earthquake FY 2010 FY 2014 Oil:6.6 Dependence Dependence degree 62% degree 88%

Oil:9.5 Other gas:0.9 LNG :46.1 LNG :29.3 Source: Agency for Natural Resources and Energy ・After the earthquake, the proportion of coal-fired power has been increasing due to problems of nuclear power plant operation. Besides, LNG's proportion is also increasing. ・Domestic and Chinese MgO for FGD in part of coal-fired power generation (small & medium- sized )plants is around 10% share of total power generation. UBE MgO/MH Shipment ☆Compared to FY 2015, MH slurry shipment is expected to increase in FY 2020. ☆The anticipated increase in the quantity is expected to peak until 2020.

1,000mt(as MgO)

UBE Material Estimated COP21 CO2 Regulation in the Paris Agreement 【Paris Agreement】 ・ We aim to make the global temperature rise of the whole world to 2℃ or lower, or even 1.5 ℃ or lower

・ Each country strengthens regulations, such as reporting CO2 missions every five years

Source: draft committee submitted to the United Nations Framework Convention on Climate Change Asian FGD Market and Chinese CCM Trend Liaoning Province, Xiuyan District ( high purity CCM for FGD & large crystal FM ) Chinese CCM(30%) China 20,000? Unit: Mt / year (estimate as MgO) Domestic(70%) Korea 50,000 Japan Taiwan 200,000 China Expand? Japan Export 50,000 Chinese CCM (100%) North Korea

With the environmental inspections by the central gov. conductedIf Chinese in Liaoning CCM supplyProvince, situation changes, Korea Export CCMit seems production 3 countries stoppage occurred. including Japan will be affected. Chinese CCM Domestic Possible risks are as follows. (50%) (50%) 1) Closure of small factories 2) Production stagnation Chinese CCM(100%) ⇒Temporary supply insecure and price buoyant Taiwan Export UBE Material Estimated Current Status and Future of FGD Equipment at China Power Plants To cope with air pollution problem, FGD equipment will increase in power generation plant (SO2, NOx). Electric energy(MW) Power plant with FGD equipment(in China) Coal-fired Power Plants emit over 40% of China’s SO2 pollutants. SO2 emission standard 50・100mg/m3 for new power plant (China as from 2012)

200mg/m3 (EU, Japan) 160mg/m3(USA)

Source:The McIlvaine Company In 2012, most FGD equipment use limestone gypsum method. (About 0.03% wet desulfurization by magnesium) Problems of By-produced Gypsum 【Mechanism of Desulfurization by Limestone Gypsum Method】

・SO2+CaCO3+1/2H2O→CaSO3・1/2H2O+CO2 ・CaSO3・1/2H2O+1/2O2+3/2H2O→CaSO4・H2O As FGD equipment of limestone gypsum method increases, coal ash and gypsum are produced much as byproducts. ⇒ It is becoming an amount that can not be handled even in China. 【Mechanism of desulfurization by water mag method】

・SO2+H2O→H2SO3+Mg(OH) 2→MgSO3+2H2O ・MgSO3+H2O+SO2→Mg(HSO3) 2 +Mg(OH)2 →2MgSO3+2H2O2MgSO3+O2→2MgSO4 Magnesium sulfate after desulfurization by magnesium is highly soluble in water. In Japan, coal ash is recycled as cement raw materials and partly utilized as fertilizer raw material by adding magnesia to immobilize toxic heavy metals.

☆In future, due to the problem of gypsum disposal, there is a possibility that water mag desulfurization method using CCM from China increases partly in place of limestone gypsum method. Summary of FGD Application

・Until 2020, demand for FGD in Japan is expected to increase due to the construction of small- and medium-sized coal- fired power plants. However, from a medium- to long-term perspective, the FGD field is declining from the viewpoint of CO2 emissions.

・Chinese FGD situation 1)More increased environmental regulation in China, more increased demand for FGD. 2)Gypsum is produced too much to be handled even in China. 3)Magnesium method desulfurization equipment could be more introduced in China. 2)Post FGD Market Market Application Development to Environmental Field

Magnesium hydroxide Mg(OH)2 Magnesium oxide MgO

【Improvement of water quality 【Earth pavement】 / sediment quality】

Improvement of sediment quality in fishery farm A promenade Water Quality and Bottom Quality Improvement 14 Application - Hydrogen Sulfide Countermeasure - Mag System Improving Agent Used for suppression of hydrogen sulfide and sludge purification of sediment. Matsumoto Castle (National Treasure )

Fishery Farm Water Quality / Bottom Quality Improvement Application -Mechanism and Effect - External influx load Mag System Improving Agent Spraying ・Sewage water ・Residual food

Causes death of fish

Hydrogen sulfide generation P elution Suppression of hydrogen sulfide generation Deterioration of bottom sediment × ×

Accumulation in Promotion of decomposition sediment of N and P pH improvement of sediment Activation of aerobic bacteria Weakly alkaline Suppression of sulfate reducing ) Sediment (sludge bacteria activity

Improve bottom sediment (make bottom sludge weakly alkaline) Fixation of phosphate ①Promotion of decomposition of organic matter ②Suppression of hydrogen sulfide generation ③Suppression of phosphorus elution ETV Project - Evaluation Content - 【ETV】 Environmental Technology Verification (Environmental technology demonstration) It is operated by the Ministry of Environment in Japan. Evaluation test of useful "advanced environmental technology" A project to "demonstrate" the effect as objective data. Field of demonstration: Improvement of water environment in closed seas Proven Technology Name: Sediment Improvement Technology with Magnesium Oxide Verification number:090-1402

Omura Bay

Demonstration test site

Test location Soil Paving Application World Heritage ① Pave using the texture of the earth Iwami silver mine ② measures against grass weeds

We are in trouble growing grass! It will be muddy if it rains!

The asphalt pavement looks a bit ...

Median strip Paving work using MgO

Park Promenade

By applying construction with MgO, we can take pavement and weed control measures that make use of the texture of the soil. Summary of Post FGD Applications

・As the post FGD markets, water and soil environment applications by utilizing magnesia seeds would be promising.

・The ETV project would be expanded to overseas for securing sea resources.

・Besides, we have been developing following applications: industrial waste recycle, bio mass electricity, preserving sea ecological system, water front restoration, sewage etc.

Fine Material Division Yoshihiro Nishimura New Applications by making Use of Magnesia Seeds 1. What is “High-purity and ultra-fine magnesia”? 2. Features of VM-MgO and application fields 3. Lineup of VM-MgO family products 4. Examples of application using VM-MgO 4-1. Insulating resin 4-2. Electronic materials, additives, Sintering aids 4-3. Semiconductor 5. Summary New Applications by making Use of Magnesia Seeds 1. What is “High-purity and ultra-fine magnesia”? 2. Features of VM-MgO and application fields 3. Lineup of VM-MgO family products 4. Examples of application using VM-MgO 4-1. Insulating resin 4-2. Electronic materials, additives, Sintering aids 4-3. Semiconductor 5. Summary 1. What is “High-purity and Ultra-fine Magnesia”?

High-purity and ultra-fine magnesia=VM-MgO MgO powder manufactured by means of Vapor-phase oxidation Method

200nm grade 50nm grade MgO MgO MgO Mg O O Mg O O 200nm

BET specific surface area BET specific surface area 7~9m2/g 28~38m2/g Particles is single crystal ⇒ High activity Without pulverizing process ⇒ Low contamination New Applications by making Use of Magnesia Seeds 1. What is “High-purity and ultra-fine magnesia”? 2. Features of VM-MgO and application fields 3. Lineup of VM-MgO family products 4. Examples of application using VM-MgO 4-1. Insulating resin 4-2. Electronic materials, additives, Sintering aids 4-3. Semiconductor 5. Summary 2. Features of VM-MgO and Application Fields

Basic property Filler of Features of of MgO Insulating VM-MgO Item Unit Property resin Ultra Crystal ― Cubic fine structure ・50nm Lattice Semi- ・200nm Å 4.21 constant conductor Density g/cm3 3.58 materials High Melting ℃ 2800 Purity point ・>99.98% Mohs Electronic ― 5.5 hardness materials Electrical Ω・cm 1014 resistivity High Dielectric activity ― 9.8 constant Sintering aids ・28~38m2/g Additives ・7~9m2/g 3. Lineup of VM-MgO Family Products

200nm MgO

Metal-Mg 50nm Vapor Phase MgO VM-MgO Oxidation Oxygen Moisture vapor 70nm hydroxylation Mg(OH)2 MgO Sintering sputtering target

200nm MgO 50nm MgO 70nm Mg(OH)2 MgO target New Applications by making Use of Magnesia Seeds 1. What is “High-purity and ultra-fine magnesia”? 2. Features of VM-MgO and application fields 3. Lineup of VM-MgO family products 4. Examples of application using VM-MgO 4-1. Insulating resin 4-2. Electronic materials, additives, Sintering aids 4-3. Semiconductor 5. Summary 4-1. Insulating Resin Benefit of High-Voltage (HV) power transmission

Large-scale renewable Large-scale energy offshore wind power generation

HV is suitable for long-distance power transmission because its transmission loss is low. Transfer the energy very efficiently from distant renewable-energy-farm to city. Furthermore from city to city or from country to country. 4-1. Insulating Resin Benefit of High-Voltage (HV) power transmission

Large-scale renewable Large-scale energy offshore wind power generation

HV is suitable for long-distanceJan. 2013 power transmission because its transmission loss is low. TransferRed:Existing the links energy very efficiently Blue:under construction or under planning from distant renewable-energy-farm to city. https://en.wikipedia.org/wiki/High-voltage_direct_current Furthermore from city to city or from country to country. 4-1. Insulating Resin Super grid initiative

Asian Super Grid North Sea Offshore Grid European Super Grid

North American South American Super Grid ASEAN Super Grid Masayoshi Son - Softbank 2016 International Conference on Blankmap:CraftMAP Global Energy Interconnection

Many governments or private entities all over the world are proposing various super grid initiatives. 4-1. Insulating Resin

MarketSuper trend grid of initiativeHV transmission Asian Super Grid North Sea Offshore Grid European Super Grid

North American South American Super Grid ASEAN Super Grid Masayoshi Son - Softbank 2016 International Conference on Blankmap:CraftMAP Global Energy Interconnection

Research-report of switching-power-supply and converter or inverter applied equipment Many governments or private entities all over(2016 the year world edition) are proposing various super grid initiatives.Sep. 2016, EMJ Inc. HV is a market with future growth potential. 4-2. Electronic Materials, Additives, Sintering Aids

Applicable as VM-MgO,Mg(OH) is 2 raw material of Ultra-fine and High purity electronic devices etc. Electrode material of Sintering aids of Uses Dielectric material secondary battery ceramics sensor Features of High purity High purity Ultra fine VM-MgO-based Low contamination Ultra fine High activity products Reliability improvement Performance improvement Sintering temperature Effect Safety improvement Device downsizing decreasing 4-3. Semiconductor Normally-Off Computing Architecture of Architecture of conventional Volatile Volatile Non-Volatile Normally-Off computer computer CPU CPU CPU CPU Non-Volatile Cache SRAM MRAM Cache Memory Memory

Main Memory DRAM MRAM Main Memory

HDD Storage HDD Storage

SSD SSD

Calculation

Calculation Calculation Calculation

Standby Standby

consumption consumption Standby power Standby Standby power Standby Standby Standby A technique which reduce the Standby power consumption. Normally-Off Computer doesn't need any power when not in calculation. MRAM is the major candidate memory for replacing volatile memory. 4-3. Semiconductor Benefit of Normally-Off Computing Volatile Non-Volatile CPU Volatile CPU CPU CPU Non Cache SRAM Volatile MRAMSRAM Cache Main Memory DRAM MRAMDRAM Main Memory HDD Storage HDD Storage SSD SSD 100 DRAM DRAM All Non-Volatile ↓ SRAM MRAM ↓

40 MRAM

consumption Standby power Standby 1 0 Normally-Off computing has possibility that we can use the mobile devices for 1 month without battery charge. 4-3. Semiconductor How use MgO to make MRAM?

Case of Al2O3 layer Case of MgO layer (crystalline) (amorphous) Ferromagnetic layer Ferro electron electron MgO magnetic Insulation layer layer Insulation Ferromagnetic layer layer

Ferro TEM image of MTJ element Scattering magnetic Straight Shinji Isogami (Tohoku univ.) Low S/N ratio layer High S/N ratio MRAM consists of MTJ's performance was significantly upgraded millions or billions of by exchanging the insulator layer MTJ elements. from Al2O3 layer to MgO layer. MgO is the Key-material for development of MRAM.

MRAM : Magnetic Random Access Memory MTJ:Magnetic Tunnel Junction 4-3. Semiconductor MgO sputtering target

Manufactured by sintering VM-MgO. ・Relative density:>99.4% ・purity:>99.995% substrate

MgO MgO Ar-ion thin-film

MgO Target

①High-energy Ar ion attacks the surface ② ofMolecules MgO-Target and Atoms of MgO are ejected(sputtered) from MgO target ③Molecules and Atoms reach to substrate and the thin film of MgO is formed High-purity and High-density MgO target is required. 4-3. Semiconductor MgO sputtering target

Manufactured by sintering VM-MgO. ・Relative density:>99.4% ・purity:>99.995% substrate

MgO MgO Ar-ion thin-film

MgO Target

①High-energy Ar ion attacks the surface ② ofMolecules MgO-Target and Atoms of MgO are ejected(sputtered) from MgO target ③Molecules and Atoms reach to substrate and the thin film of MgO is formed High-purity and High-density MgO target is required. New Applications by making Use of Magnesia Seeds 1. What is “High-purity and ultra-fine magnesia”? 2. Features of VM-MgO and application fields 3. Lineup of VM-MgO family products 4. Examples of application using VM-MgO 4-1. Insulating resin 4-2. Electronic materials, additives, Sintering aids 4-3. Semiconductor 5. Summary 5. Summary ・VM-MgO is high-grade products which is high-purity, ultra-fine, high activity and low-contamination.

・It is applicable to insulation and electronic materials etc.

・Applying VM-MgO to most advanced technologies is contributing to "improving the devices performance“ and "energy saving".

200nm MgO 50nm MgO 70nm Mg(OH)2 MgO target

Environmental Inspection in China Background : severe air pollution by PM2.5, SO2, NOx etc. ・1.36m pre-death by air pollution in China each year (3m for world) (“ Nature ” Sep. 16, 2015 by Max Planck Institute) ・Environment concern : Pollution (China) > Climate change (World) (“ Environment doomsday clock ” survey by Asahi Grass Foundation) *40% of total population (1.37b) are living in high PM2.5 polluted area *Coal-fired power plant emit over 40% of China’s SO2 and NOx

Political action : 2015 Jan. Environmental Protection Law (amended) 2016 Jan. Air Pollution Control Act (amended after 15 years) 2018 Jan. Environment taxes & fees reform (“ polluters pay ”) “12th Five Year Plan(2011-15)”(SO2 -18% Coal power plant with FGD →99%) (environment protect. investment 3.4trillion yuan ) *phasing out of outdated production capacity (Coal Power Plant, Iron & Steel -90mt, Cement -230mt etc.) *stringent emission standard for new C.P. plants (100or50mg/m3 for SO2) “13th Five Year Plan(2016-20)”(binding target SO2 -15%) * phasing out of outdated production capacity (Iron & Steel -150mt) Central Environmental Inspection Team ・2016 Jul.-Aug. The 1st round C. E. Inspection 8 Teams (I. , Heilongjiang, Jiangsu, Jiangxi, Henan, Yunnan etc.) Nov.-Dec. The 2nd round C. E. Inspection 7 Teams (Beijing, Tianjin, Hebei and surrounding areas) ・2017 Apr.-May The 3rd round C. E. Inspection 7 Teams ( Tianjin, Shanxi, Liaoning(Apr.25-May25), Anhui, Fujian, Hunan, Guizhou ・2017 May 25 Yingkou city government announced for all magnesia companies

Acceptance procedure to recover production by The 3rd round C. E. Inspection ’17 Apr.-May a written application & passing the acceptance (production halted producers) or passing on site- inspection (in production producers) by Sep. 30. Liaoning All magnesia companies equipment must comply with temporary emission standard for DBM/CCM Tianjin kiln and FM furnace (B9078-1996) by Sep. 30. Shanxi (dust <200mg/m3, SO2 <850mg/m3 ) Anhui

Hunan Dynamite is still unavailable as of Jun. 9 and Fujian magnesite ore stock is limited. Guizhou

Problem of coal ash, By-produced Gypsum

By-product amount by coal-fired power plants in Japan (2014) ・Coal ash :9.59 million tons (effective use 98%) ・Gypsum : 1.94 million tons (effective use 100%) Source: General Foundation Coal Energy Center ⇒Is the amount of coal ash and gypsum generated in China more than ten times that of Japan? · Coal ash generation amount more than 100 million tons? · Generation amount of gypsum more than20 million tons?

※ amount of domestic coal ash generation (estimated) 1 million x 0.25 = 250 thousand tons / year (a coal-fired power plant of 1 million kWH) Other desulfurization methods

1.Desulfurization with caustic soda (NaOH)

・Using caustic soda as absorbent, remove SO2 in the exhaust gas. AbsorbedSO2 wastewater as an aqueous solution of Na2SO4.

SO2+2NaOH → Na2SO3 + H2O

2.Desulfurization by seawater method ・Using seawater as an absorbent, remove SO2 in the exhaust gas. The absorbed SO2,after being returned to soluble sulfate by aeration, discharge to sea.

+ SO2+H2O → HSO3- + H

Outlook for Environment-related Products(1) ①Water related demand(Mainly aquaculture)

Unit: Mt / year Magnesium hydroxide Mg(OH)2 5,500Mt/year

200~250Mt/year

We are aiming for expansion mainly for Bottom Quality Improvement for overseas and for sewage UBE Material Estimated Outlook for Environment-related Products(2) ②Earth pavement demand

Unit: Mt / year Magnesium oxide MgO 1,700~1,800Mt/year

550~600Mt/year

UBE Material Estimated Proposed draft of power supply in 2030

Renewable energy Nuclear power Coal Natural gas Oil 22~24% 20~22% 26% 27% 3% 2030

2013

11% 30% 43% 15% 1% Source:nippon.com MEP’s Environmental Inspection Specification of VM-MgO

Item Unit Specification MgO % >99.98 Al <5 Si <10 BET specific Ca <10 Grain size Grade surface area Fe <5 (nm) Zn <40 (m2/g) ppm Na <5 500A 45~60 28~38 Mn <15 2000A 190~240 7~9 Ni <1 Cr <3 B <1 U,Th ppb ≒1 50nm grade 200nm grade Insulating resin

Suppressing of space charge by making resin/filler nanocomposite

Other example : Epoxy/MgO nanocomposite

Space charge formation

Epoxy without VM-MgO Epoxy/VM-MgO nanocomposite Time-dependent changes of space charge distributions during the application of a dc electric field of 50 kV/mm Red:Positive charge Blue:Negative charge Yoshimichi Ohki et. al. (Waseda Univ.) This technique is applicable to insulator of other HV devices. Comparison of various Memories

NAND DRAM SRAM MRAM FeRAM PRAM ReRAM

Cell size 1.33~6F2 4~6F2 100F2 8F2 >15F2 4~6F2 4F2

Write time >1msec 10nsec <1nsec <10nsec 50nsec >30nsec <10nsec

Non-volatile No No No Yes Yes Yes Yes

Endurance 105 1015 1015 1016 1012 1012 106 MTJ element

Magnetic Tunnel Junction(MTJ)

ferromagnetic Ferromagnetic layer layer MgO × MgO tunnel barrier Insulation ferromagnetic layer layer Ferromagnetic layer

Parallel Anti-Parallel TEM image of MTJ element Tunnel current Tunnel current Shinji Isogami (Tohoku univ.) can flow can not flow MRAM is made of “0” or “1” is correspond several millions or billions “Parallel” or “Anti-Parallel” of MTJ elements. Improvement of MTJ’s performance

Relationship between TMR ratio and RA product for MTJs with (solid circle) and without (open circle) in situ IR heat treatment on MgO barrier. Triangles represent the results in previous reports.

Redrawn from S.Isogami, M.Tsunoda, K.Komagaki, K.Sunaga, Y.Uehara, M.Sato, T.Miyajima, M.Takahashi Appl. Phys. Lett. 93 (2008) 192109.