Potential of the Chinese Materials

Ma Jun

Marketing Materials

Young’s Refectory Materials Inc.

No.1, Men’s Avenue, Zhongshan District

Dalian, Liaoning Province

Tel:0411-286-5151

Email:Youngl@youngrm.com

Date: September 29,2001

Eric H. Williams

Purchasing Manager

North American Minerals

905 48^th Avenue

New York, N.Y. 10159

Tel:(212) 490-2456

Email: Ericw@yahoo.com

Re: Potential of the Chinese Materials

Dear Eric H. Willliams,

I’m glad to have your email commenting on the situation of the bauxite and magnesite in central and northern part of China. You’re absolutely right on the part you mentioned, but the other part of the icture is more optimistic and deserves your attention.

Considering that meaningful magnesite exports from China began in the middle of 1990’s by Young’s. Today’s shipments to foreign ports of approximately 1 million tons per year represent a serious world supply source that can no longer be considered minor and of little impact. With production in the early 1980’s from the province of Liaoning essentially limited to a single burn 8-90 percent Mgo material, we soon learned that our involvement in world markets would require higher grade products and modern systems to produce them. We then began to produce a 94-95 percent MgO double-rned buiquette version and then recently moved into the big leaguers, with a double-burned 97-98 percent MgO sinter grade magnesite, produced in European pressurized shaft kilns, although we are still refining this high grade facilities. The reserves of Chinese magnesite in the ground are essentially unlimited compared with North Korea, South Europe and Middle America. And all magnesite-producing systems are relatively well advanced and uniform. It now appears that there is no reason that China shoule not become a longterm major world supplier of dead-burned magnesite.

We also have the product line of fused magnesite, which is melted by electrified carbon and purified it upped 98.5 percent purity, on a limited scale, however, we’re building a fusing center up to a 500,000 capacity in Haicheng, Liaoning Province. This joint-venture center with a German refractory will turn out the fused magnesite in early 2002.

We used to have the congestion and loading problems, those problems are gone with the 20^th century. We usually have the quick dispatch clause with the port while the buyers sending the vessels here based on the FOBST term. Eric, let’s work on something, which could initiate our snow ball. Let’s make it rolling.

Looking forward to receiving your specific inquiry.

Yours faithfully,

Ma Jun Marketing Manager