Present Situation of Kaolin in China    
  
Kaolin, a non-metallic mineral, is regarded together with mica, quartz and calcium carbonate as the four great non-metallic minerals. Mainly composed of kaolinite minerals, (kaolinite, dickite, nacrite, halloysite and so on) whose particle size is less than 2 microns, kaolin's ideal chemical formula is Al2O3-2SiO2-2H2O. The major mineral components in kaolin are kaolinite and halloysite. It is mainly used in the fields of paper-making, ceramics, refractories, coatings, rubber and plastics, glass fibers and so on.

Kaolin types in China   

Kaolin ores in China can be classified into coal-measures kaolin, soft kaolin and sandy kaolin (non-coal-measures) depending on its quality, plasticity and sand content. Since China has abundant coal reserves and coal seams here are generally associated with kaolin ore, its coal-measures kaolin reserves is the highest in the world.
    However, coal-measures kaolin is hard kaolin. It can be produced into calcined kaolin to manufacture high-grade coated paper or various fillers (low grade variety) on a small scale, but it is rarely used in the paper-making industry due to its high price. Although coal-measures kaolin in China can be used to produce calcined kaolin, it costs more and requires more complex technology than the calcining process of washed kaolin overseas. At present, kaolin, especially non-coal-measures kaolin is widely used in paper-making and ceramics production. Non-coal-measures kaolin can be divided into flake, tubular and lamellar ones in accordance with the shape of the crystal.
    China comes third in the world with its 1.5 billion or so tons of kaolin reserves, among which 40% to 50% are from Maoming of Guangdong province and Hepu of Guangxi province. Also, China boasts more than 1.7 billion tons of coal-measures kaolin, which is mainly distributed in Inner Mongolia, Shandong, Shanxi, Anhui, Liaoning, Shaanxi and other provinces and regions.
    Although China has rich kaolin reserves, its high-end oriented kaolin ores are far from sufficient and most ore can be used only to produce low-end ceramics or fillers. At present, only those from Maoming of Guangdong province, Zhanjiang of Guangxi province and Shahe of Hebei province can be used to make paper or coatings. Kaolin in Hepu of Guangxi province and Lianjiang of Guangdong province is lamellar and can be used in the paper-making field, but its processing cost is relatively high. Shahe of Hebei province, which once had fierce competition with Maoming of Guangdong province in domestic paper-making and coatings market in the late 1990s, is gradually shrinking now due to lack of resources. Kaolin in Maoming of Guangdong province is mainly flake and features low processing cost as well as high added value. It can be directly used in paper and coatings production. Kaolin in Longyan of Fujian province is tubular and mainly used in producing ceramic and refractory materials.

Requirements for high-end coatings grade kaolin in China are satisfied by imports   

In the aftermath of rapid expansion of production capacity in the late 1990s, China's kaolin output has remained at 3.0 million to 3.3 million tons since 2000. In 2007, the kaolin output went up marginally and is expected to reach about 3.3 million tons.
    According to the analysis by China Non-Metallic Minerals Industry Association, China's kaolin output increased steadily in 2007. The supply of ceramic grade kaolin continues to exceed demand. High-end paper and coatings grade kaolin still rely mainly on imports, among which those from Brazil, Australia and America have a large market share among China's paper-making companies due to their stable quality and high performance cost ratio.
    From 2005 to 2007, China exported about 1.0 million tons and imported less than 400 000 tons of kaolin annually with some 600 000 tons of net exports each year. However, exports are mainly low-end kaolin for ceramics while high-end requirements for paper-making depend mainly on imports. From 2005 to May 2008, China's export price for kaolin was US$40 - 70 per ton (about RMB300 - 500 per ton) while the import price in the same period registered US$200-plus per ton (about RMB1 500 per ton).

Demand for high-end kaolin will increase considerably   

The paper industry is the second largest market of kaolin in China and China is the second largest paper-making country in the world. China's paper production was 56 million tons, 65 million tons and 73.5 million tons in 2005, 2006, 2007 respectively with an annual compound growth rate of near 15%.
    From 2005 to 2007, the production increase of lower grade papers, such as newsprint and box board, was fastest and the demand for high-end kaolin was limited. However, according to China's 11th Five-Year Program, the production capacity of high-end paper will expand quickly from 2007 to 2010, with that of art paper and white paperboard hitting 8.45 million tons and 18.03 tons separately. Their compound growth rate will reach 24% and 17% respectively. So if everything goes well, the total capacity of both will be 26.48 million tons, 67% over that of 2007. China's demand for high-end paper and coatings grade kaolin is expected to go up greatly.
    Although calcium carbonate, ultra-fine calcium carbonate in particular, can be a partial substitute for kaolin, kaolin has a few special features that are indispensable in paper-making. For example, kaolin's flake structure allows better coverage ability and higher glossiness. Calcined kaolin's porous structure keeps coatings at a proper thickness and permits good printability. So the substitution of calcium carbonate for high-end kaolin is limited.

The market of kaolin for ceramics remains huge   

China is a major ceramics producer in the world and its production base is substantial. So although the supply has greatly exceeded the actual demand as a whole, China still has a great potential kaolin demand for ceramic grade ceramics, including low-end kaolin for body and high-end kaolin for glaze. Take daily-use ceramics for example. China's output has been leading the world for many years and Guangdong province is the largest producer of the country. In 2007, China's daily-use ceramics production hit 14 billion pieces, of which 4.19 billion were contributed by Guangdong province and 1.72 billion by adjacent Guangxi province. The output of these two provinces accounted for about 43% of the nationwide total.
    At present, China's four industrial bases of non-coal measures kaolin are: China Kaolin Clay Company, Fujian Jiuzhou Group Co. Ltd, Maoming Kaolin Science-Technology Co. Ltd. And Guangxi Yankuang Beihai Kaolin Co., Ltd., among which Maoming Kaolin Science-Technology Co. Ltd. is the largest producer of paper-making and coatings-producing kaolin in China.