I. Resource
Talc are found in fifteen provinces in China, of which Liaoning, Shandong, Guangxi, Jiangxi and Qinghai
occupy a relatively larger amount, accounting for over 90% of the total reserves. Liaoning, Shandong
and Guangxi are main production areas for white talc, although Ningshan and Zhen’an in Shanxi,
Luanchuan and Fangcheng in Henan, Xiangfan in Hubei, Putian in Fujian as well as Kumishi in Sinkiang
have been discovered with different volumes of white talc reserves. Jiangxi is rich in black talc, produced
mainly from Guangfeng, Yushan and Shangrao, with higher whiteness after burning, whose main
application area is ceramics. In addition, Shanglin in Guangxi, Qixia in Shandong, Shimen in Hunan and
Chongqing produce black talc as well. Due to negative geographic location, traffic condition, talc
resources in Qinghai have not yet been mined in scale.
By 2010, there are totally 126 talc mining areas with a reserve of 7.5 million tons, basic reserves of
153million tons, stock reserves of 141 million tons and proved reserves of 267 million tons. The below
list shows the provinces with reserves over one million tons:
Jilin: 1.2 million tons
Liaoning: 62 million tons
Shandong: 17 million tons
Guangxi: 8.2 million tons
Jiangxi: 31 million tons
Hunan: 2.8 million tons
Shanxi: 1.2 million tons
Geological types of talc deposits in China include:
i. Regional metamorphic type talc deposits can shape qualified talc deposits in a large scale. E.g.
Fanjiabaozi talc deposit of Haicheng in Liaoning, Jizhua talc deposit of Longsheng in Guangxi,
Xujiadian talc deposit of Haiyang in Shandong, of which the first two are super-large deposits.
ii. Pyrometasomatic talc deposit, e.g. Sidaohongshan talc deposit of Jinta in Gansu, Nantong talc in
Chongqing, Zhenwei talc deposit of Shanglin in Guangxi.
iii. Ultrabasicrock hydrothermal alteration type talc deposit, e.g. Kumishi talc deposit of Toksun in
Sinkiang, Mangya talc deposit in Qinghai.

* Dr. Jia Xiuzhuang, certified business executive, secretary-general of Chinese Talc Producer Association
iv. Sedimentary type attaclay and black talc deposit, e.g. Jijiaoyan attaclay (talc clay) deposit of Xinhua
in Hunan. Black talc can be discovered in Sinian System, e.g. Guangfeng black talc deposit in
Jiangxi.
There are totally 43 talc deposits in China (main deposits as shown in Table 1) with 8 large-size deposits
(reserve volume more than 5 million tons), 17 middle-size deposits (reserve volume between 1 and 5
million tons) and 18 small-size deposits. In addition, super-large deposits with reserve volume over 10
million tons include Fanjiabaozi of Haicheng in Liaoning, Jizhua of Longsheng in Guangxi, Liboshikuang
of Qixia in Shandong, Xitan of Guangfeng in Jiangxi, Pingtang of Heyuan in Jiang, and the west mining
area of Mangya deposit in Qinghai. White talc with high-end quality accounts for 30% of the total reserve
volume.

II. Production
There are more than 200 talc processing enterprises in China, while 70% are of small scale. Main
manufacturers are as follows which account for 5% in quantity but 80% of output:
Gulin Guiguang Talc Development Co., Ltd.
Guangxi Longguang Talc Development Co., Ltd.
Guangxi Longsheng Huamei Talc Development Co., Ltd.
Shandong Pingdu Talc Mine Industrial Co., Ltd.
Laizhou Talc Industry Co. Ltd.
Shandong Qixia Talc Co Ltd
Liaoning Aihai Talc Co., Ltd.
Liaoning Beihai Industrial Group
Haicheng Xindai Mineral Co., Ltd.
Haicheng Shuiquan Talc.Co Ltd
In 2011, Chinese talc output was about 1.85 million tons shown as Table 2. As is indicated in Figure 1,
the talc export volume in 2011 was 680kt amounting to USD160 million, accounting for 0.008% of the
total Chinese export volume, which suggests that talc is a low value, small scale mining industry in
China.

Guangxi, Shandong and Liaoning are main areas for talc export. Figure 2 shows the export share of talc
of Guangxi, Shandong and Liaoning in 2011, of which Guangxi accounts for 56% and 25%, Shandong
for 9% and 6%, Liaoning for 35% and 69% respectively for crude talc and ground talc. Currently,
Liaoning and Guangxi share an approximately adequate scale on export. While Liaoning shares
advantages in ground talc, Guangxi shares advantages in crude talc.
Chinese talc industry is striving to abandon the old pattern of pursuing production volume and expanding
production scale aimlessly. As an industry relying on resource, current growth of production volume
equals to shortened future life service. The industry overall has accepted the concept of protecting the
resources and the environment to follow the sustainable development. Mining resources shall be
exploited in order as planned on the basis of environmental protection. In recent years, with an obviously
increased input intensity of mine infrastructures, improved mining approaches, creative mine selection
technology, updating of old process, new mineral resources are under exploitation in an orderly way.
Detailed production grading and largely improved multipurpose utilization rate of the mineral resources
have provided proof that the talc production volume can be kept at a steady level of 1.75million to
1.85million tons in next 5 to 10 years.
Equipments for processing talc in China mainly include roller mill, table mill, impact mill and jet mill.
Currently, there are totally 300 roller mills for processing 400 mesh products, 10 table mills and impact
mills each for processing 800 mesh products, and 70 jet mills for processing 1250 mesh and up products.
Annual processing capacity of micronized products (as 1250 mesh) is 350,000 tons. In the future,
quantity of table mills shall increase to take place of more roller mills, and the jet mills shall be developed
to be in a larger scale and more automatic.

III. Market
In the past 30 years, the development motivation of Chinese talc industry mainly relies on export, while in the future, domestic market demands shall exceed export demands and become the main driving force. In 2009, productions of papermaking, coating, automobiles, household appliances and ceramics in China were listed as World First, while the above markets as well appeal to the main application fields of talc with great market potential. Yangtze River Delta and Pearl River Delta are regarded as the leading consumption areas. Future market growth shall lie in plastics, especially PP plastics for automobile industry, household appliances and packaging products, and the annual growth rate shall be kept 5%-10%.
Since 2000, the Chinese talc price has been rising. In the last three years, the rising rate was kept around 10%, which is relatively higher than that of other countries in the same period. Price rising of talc in China can reflect the market supply-demand relations, which as well results from the continuous increase of talc production and export costs in China. The world market is now on an increasing demand for white talc, while the supply ability of China turns to be decreased rather than improved, which forms a situation of demand exceeding supply and this situation shall not be changed probably. Recently, talc is listed as product with high energy consumption, high pollution yet restricted by resource, whose export policy has been greatly changed. In 2003, export rebates turned to be reduced. In 2006, all rebates were cancelled. In 2009, 10% of the export duty started to be collected. In addition, another important factor for price rising shall lie in appreciation of Chinese RMB against USD at 23% since reforming of exchange rate system.

By 2012, price of talc in China has been up to the limit that the talc market can bear, which indicates no further space to rise. Price rising can be almost accepted with difficulty by the market in the first half year, while both domestic and international market situation shall not be pleasing in the second half year to the next year. As the decreasing of domestic market in the second half year, demands volume could be reduced by 30%. What’s different with the financial crisis in 2008, the problem this time is not only resulted from demand contraction in the international market, what’s worse is the considerable declining of domestic consumption. By the second half of 2012, it is predicted that the talc industry in China shall encounter a far more stagnant market than 2008. At present, prices of crudes in China are higher than that of other surrounding developing countries, and prices of some medium and high-grade goods are close to or even higher than international market price. Majority of the low-grade goods might be out of competition on the international market due to high price (please refer to Figure 3 and Figure 4).

Figure 4: Chinese Ground Talc Export Volume vs the Price 2008-2012

One of the important features to Chinese talc export is the compensated use of export quota and the bidding method. Qualification of bidding enterprises and the bidding measures shall comply with relevant regulations in Quota Bidding Measures for Export Goods and Implementing Regulations for Export Quota Bidding of Industrial Products. Goods covered in talc export quota management include:
¡ñ Crude talc HS: 25261020
¡ñ Ground talc HS: 25262020.01
¡ñ Ground talc HS: 25262020.90
¡ñ Mixture with over 50% of talc by weight HS: 38249091 In recent years, the export quota volume has been kept between 610kt and 680kt. Affected by the financial crisis in 2009, the volume was reduced to 400kt. In 2010, the export volume was recovered to 610kt, increased to 680kt in 2011 and kept at 680,000 tons in 2012. Totally 40 enterprises got the bidding qualifications and obtained corresponding export quota, of which 25 are manufacturing enterprises and 15 are trading companies with a respective export quota of 54% and 46%.
In addition, 150kt of talc and chlorite are exported annually, and they are mainly from Liaoning and Shandong. Talc mixture generally refers to wastes after talc sorting, mixed with various amount of talc and other associated ores in a large proportion. Talc mixtures are mainly exported to Japan, Korea and Southeast Asia. According to currently related regulations, the talc mixtures containing more than 50% talc shall be regarded as talc, which requires export quota.
In China, ground talc shall be mainly exported to Asia, while crude talc to Japan, European and American markets. Primary Asian import countries include Japan, Korea, Thailand and Indonesia; main European and American import countries include the USA, Italy and Netherlands. China is the world’s largest talc exporter, while what’s worth mentioning is that the import volume of talc has been kept increasing significantly in recent years. In 2011, the import volume was up to 50kt (Figure 5) with 19kt of ground talc. Main import countries include the USA, Korea and Italy, and the consumption areas are Yangtze River delta and Pearl River delta. Figure 6 shows the import volume and price of ground talc from 2008 to 2012. By 2011, the import price has reached USD955 per ton, while the export price was only USD188 per ton in the same period. The import price is five times more than the export price. In 2011, the import volume of crude talc was 30kt, and the export countries mainly include Pakistan, North Korea, Egypt and India. Reasons for importing of ground talc mainly ascribe that
Chinese product quality fails to satisfy related requirements, while reasons for importing of crude talc mainly ascribe that the prices are fair with or even lower than those of China.

IV. Countermeasures
From policy perspective, there are totally five questions related to the sustainable development of Chinese talc industry, which need to be paid attention to, considered and resolved:
i. Chinese Talc Position needs to be reviewed. Talc in China is overstated as a product at
strategic position. Quota + export duty + lawful inspection.
Compensated export quota was carried out since 1996.
According to the Announcement on Export of Talc Mixtures in the customs announcement in 2008,
mixtures containing over 50% talc shall be regarded as talc (Tax Regulation No. 38249091).
5% to 10% export duty was collected since 2009.
In 2012, ground talc under Tax Regulation No. 2526202001 were adjusted as products concerned
with food additives.
Talc is a relatively low value and small scale mineral. As ordinary filler, talc is applied to reduce the production cost, which shares identical application fields with calcium carbonate, kaolin. Within the global scope, talc shall not be considered as rare resources, so excessively high price shall decline its meaning in use or result in replacement by other kind of fillers. Currently, market share of talc has failed to reach 5% in a more serious decreasing tendency, which indicate a weak product in the filling market to be declined out. China is the only country in the world that imposes export duty, export quota and lawful inspection on talc. Upon artificial overstating and distortion, talc in China is regarded as resources at a strategic position. As a matter of fact, the export volume in 2011 was 680kt (Figure 1) amounting to USD 160 million, which accounts for 0.008% of the total Chinese export volume. Talc is a low value and small scale mineral, human intervention shall be appropriately reduced and its development shall be led more through market regulation to reflect the value and realize the best exploitation to the resource. Talc industry in China has changed a lot recently: the export structure has turned from crude talc to ground talc and micronized talc with high added value; high-grade products turn from supply exceeding demand to demand exceeding supply; cutthroat competition disappeared among enterprises. Since 2000, the export price has been improved gradually, and the rise scope in the last five years has been kept around 10%. In addition, domestic labor cost, production cost and various taxes and duties have been increased in a large scale. Compared with 1996, prices of majority products have been improved by three to five times. Currently, prices of some export products have been close to or even higher than the international market prices and many low to medium-grade goods have lost international competition. What’s to resolve urgently is the loss of international competition resulting from the high price. In the second half of 2011, tax and fee could account for up to 40% to 45% of the export cost, and the low-grade products 50%.
ii. Encourage ground talc export and control crude talc export. Currently, crude talc and ground talc export policies share no essential difference with both export duty and export quota required. Export duty for ground talc include 5% and 10% ad valorem duties, resulting in the situation that products with high added value shall be collected with higher export duty, which hasn’t reflected
the national basic policy of encouraging export of finished products and controlling export of raw materials, failing to comply with national industrial policy as well. Export is the most important market for Chinese talc. The Go Out policy must be carried out in the future, and specially the products with high added value and deep processing needs a broad international market. Chinese talc products has got a space in the international market, while relying on the advantageous resources and processing techniques, we can do better. A healthy and steady export market seems to be rather important to the sustainable development of the industry. Current export policy shall encourage enterprises taking part in the competition of international market to seek more development space. What we should take into account is to cancel the export duty for ground talc and retain the export duty for crude talc only, improving the competition of finished goods in the international market and simultaneously reflecting the protection to domestic resources. iii. Encourage to utilize global talc resources and make the import channel of crude talc accessible. We have established the world’s largest talc processing capacity, yet current shortage of domestic raw materials have blocked the industry investment and development, therefore, failure to settle down material supply means no further development of Chinese processing industry. Raw material shortage in just Liaoning and Shandong has exceeded 100kt to 150kt annually, which can only be satisfied by import. Raw materials in surrounding countries have an obvious advantage in price to that in China, which has provided a god-given opportunity. Except for thinking over how to utilize Chinese resources effectively, China shall also open our mind and strive to take favorable advantages of the global resources. Unfortunately, crude talc import is not encouraged in China. For export a 5% to 10% duty is collected, and for import a 1% duty is collected. It is urgently suggested to cancel the import duty and make the import channel of crude talc accessible as soon as possible to assist the development of Chinese talc industry.
iv. Promote the comprehensive utilization of the resources, especially the low quality talc and chlorite. According to the Announcement on Export of Talc Mixtures in the customs announcement (Tax Regulation No. 38249091), mixtures containing over 50% talc shall be regarded as talc. While during actual implementation, even the talc contents in the mixture is lower than 50%, but if talc occupies the largest proportion, this kind of mixture shall be regarded equal to the mixtures containing 50% talc and taken into the scope of talc, which still requires export quota. On the other hand, actually there is no tax number for talc mixtures containing less than 50% talc, so export is not accessible. Absolutely, there exist no any advantages to restrict the export of low-grade products. Low-grade talc and chlorite can only be used in a limited scope in Chinese market, while there is still a steady demand in the international market, therefore, restriction of its export shall only result in trailing overstock in a large scale, waste and environmental pollution. It is strongly suggested to set up a new tax number for the mixtures containing less than 50% talc to define clearly that no matter whether the talc contents in the mixture is at the upper range, the mixture shall be labeled under the new tax number.
v. Cancel the regulation to control industry-level talc products in accordance with requirements for food additives. Corresponding adjustments were conducted to the Directory of Lawful Inspection on Jan. 1st , 2012, and management conditions for ground talc under Tax Regulation No. 2526202001 were regulated as products concerned with food additives. This adjustment truly is worth discussing. Ground talc under Item 2526202001 refers to micronized talc, which are totally applied in industrial production fields, including plastics, painting and paper making, and are listed as industrial products. Ttalc for industry holds no requirements for hygienic indexes and heavy metals which are precisely the inspection focus for products with food additives. Once the standard for food additives are applied to the industry talc, all products shall not be qualified and not allowed to export, and there is absolutely no necessity at all. The fact that export enterprises develop and produce micronized talc shall increase the added value of the products, complying with the policy of effectively utilizing mineral resources, which shall be strongly supported. Almost half year’s effectuation of this regulation has directly resulted in unnecessary cost increase and longer lead time. Given to the above actual situations, it is suggested to cancel the appliance of management conditions for food additives to the micronized talc under Tax Regulation No. 2626202001, or that the commodity inspection body can give the go-ahead notice in accordance with the Application Description issued by the exporters and Letter of Guarantee for Inedible Products.
V. Acknowledgements Hereby I’d like to show my great acknowledgement to Dr. Chen Congxi (member of the key laboratory for land and resources strategic research in Ministry of Land and Resources) for providing related data and revision opinions as well as Mr. Liu Xiangrong (China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters) for providing related precious data.