Ann: Management Changes, page-9

MJC212

I agree with you, but I look at making money holistically as a cascade. WAK should have started its business at the natural start that suited its ore, and cascaded into other products over time. In the USA's kaolin history, the ore was first used for applications for which fine-grained undelaminated kaolin was suited, and getting into delamination emerged later as a way to monetise coarse kaolin previously considered as waste, and hence its feedstock could be regarded as near-zero.

In WAK's case, the natural starting point that suited its ore is the pressure-cast ceramics subsector. The air classifier mill (presuming that is what WAK's plant is) should be set to produce a basic top-cut 45-microns product at low cost, so that is where the marketing focus should have been, and where LOIs and off-take agreements should have been sought.

I would add a near-ore to the offering to the pressure-cast ceramics subsector, because the silica sand taken out at the WAK end is replaced by a silica-sand admixture at the customer end, and some of WAK's target geography imports silica sand from WA. WA's largest importer of its silica sand is South Korea.

If WAK viewed a basic K99 product as potential feedstock for, as an example, delaminated K99P (paper) and K99F (fibreglass), it can do so by add-on beneficiation, if commercially viable. I would think that producing K99F should be considered as an add-on step (a secondary classifier). The number of such add-on facilities need not increase in equal step with plant numbers.

In respect to paper, going head-on against Brazilian suppliers is crazy, but there are niche markets where WAK's ore is well suited. Potential niches are applications that requires kaolin particles to be ultra flat (diameter:thickness ratio above 70). To achieve that degree of flatness (hyperplaty) requires coarse kaolin with good crystal structure, which WAK has. If you search for “believed” in the material at https://patents.google.com/patent/US7208039B2/en, you will learn that what is generally believed about delaminated kaolin is not true for particular applications. One such niche application is for lightweight and ultra-lightweight paper. Search for “ultra light” (no hyphen) to read about it.

The paper market has an ethnic dimension, so categories of paper that are made in Japan are different to the rest of the world. Thin and ultra-thin paper is important in Japan. Andrew Sorensen told me that WAK would like to do more business in Japan, but because Japanese companies tend to work in groups called keiretsus that include supply-chain partners, it is not easy to get meaningful access to the Japanese end users of kaolin. It takes a long time to establish business customers and suppliers in Japan.