Dear editorial staff, in 1999, issue #6 of your magazine published the article named «Ukrainian titanium: to be or not to be» by L. Teplov and V. Gnatush. This article invited the readers to share their opinions on the mentioned problem.
We all live in one submarine
Dear editorial staff, in 1999, issue #6 of your magazine
published the article named "Ukrainian titanium: to be or not to be" by L.
Teplov and V. Gnatush. This article invited the readers to share their opinions on the
mentioned problem.
The enclosures to this letter contain several proposals. I
would like to make two significant remarks to the article itself.
After depicting the sad performance of Zaporozhje Titanium
and Magnesium Works (ZTMW) over the nine months of 1999, the authors of the article pose a
question, "What is the reason why the commodities, considered to be highly
exportable, ran out of demand?"
Well, the point is that titanium sponge was not really
considered "highly exportable" by all the experts in Ukraine. In late February
1994, G. Silakov, ex-technical director with the ZTMW, and G. Kovalchuk, ex-commercial
director with the ZTMW, described their vision of titanium production development in
Ukraine. Their ideas were stated in the letter addressed to A. Golubchenko, the Minister
of Ukrainian Industry, Y. Bochkarev, representative of the President of Ukraine in
Zaporozhje region, and V. Pryadko, the Head of the State Property Fund of Ukraine.
From 1995 till 1998, we repeatedly informed V. Gureyev, the
Minister for Industrial Policy, S. Grischenko, the Deputy Minister for Industrial Policy,
and other higher officials of the State and of Zaporozhje region on our arguments,
mentioning that the approved plan for recommencement of titanium sponge manufacturing at
the ZTMW is wrong.
We did our best to convince the authorities that resumption
of the obsolete manufacturing methods will result in low quality and high cost of the
titanium sponge produced. Such professionals as A. Yeremenko, ex-chief metallurgist and
head of titanium and magnesium production with the ZTMW (presently, Director General with
JSC Chistiye Metally (Pure Metals)); V. Salnikov, ex-head of the main titanium and
magnesium plant with the ZTMW; G. Osaulenko, ex-Minister of Industry; and others shared
our opinion.
Nevertheless, the ZTMW obtained a USD 24 mln. commodity
loan from the State and commenced reconstruction of the titanium sponge manufacturing. In
fact, some USD 30 mln. have been spent to finance the reconstruction works.
What are the outcomes? The manufactured sponge has an
extremely poor quality of more than 60% TG-TV, i.e. the sponge is completely unfit for
smelting structural titanium ingots. Besides, the production costs of such sponge are
twice or even thrice as high as the world prices for similar commodities. It is no wonder
that the manufactured sponge fails to meet demand on the market.
By the way, authors of the article in Metals Market mention
prices for TG-100 sponge, which are non-applicable in this case since the ZTMW
manufactures no titanium sponge of this quality grade. As for the TG-TV sponge, prices for
this commodity have remained about the same as in the early 90s.
The below-mentioned remark relates to the statement of the
authors that, "decrease in the cost of titanium in the late 80s was the main cause
for boosted titanium manufacturing".
At the moment, I fully acknowledge the principal importance
of production costs in the increase in titanium production. Yet, I completely reject this
factor as the keystone for the rise back at the end of the 80s. Back then, the main reason
was, of course, the demand of the military industry. It should be mentioned that the USSR
military industry consumed some 9 ths. tons of rolled titanium to manufacture only one
submarine. Taking into account the output of commercial rolled metal from charge to smelt
ingots, it means that all the production of the ZTMW during 1.5-2 years (back in the late
80s, of course) was used to build only one submarine!
G. Kovalchuk, G. Osaulenko, G. Silakov, and E. Falkevich
are the authors of the below-stated proposals for establishment of titanium production in
Ukraine, which should facilitate fundamental improvements in manufacturing performance of
the Ukrainian titanium sector.
The situation back in the early 90s
The ZTMW manufactured 18,000 tons of titanium sponge per
year, which roughly accounted for 20% of the total titanium production in the USSR.
The current situation
At the end of 1993, production of titanium sponge was
completely stopped. The recent works on reconstruction of titanium sponge production have
no future because reconstruction works have revived the highly obsolete technological
process and provided for a relatively small output of 6,250 tons of titanium sponge per
year. This has led to the low quality of the manufactured titanium sponge, while
production cost of one kilogram of this commodity is twice as high as the global price.
The produced titanium sponge is not used in Ukraine to manufacture structural titanium.
Proposals
We believe that restructuring of the ZTMW is the way out of
the existing situation.
We propose segregating the following three plants, which
are not linked together with technological cycles: titanium and magnesium plant, silicon
plant, and germanium plant (jointly with Severodonetsk Chemical and Metallurgic Plant).
We propose the following plan for development of the
titanium and magnesium plant:
Utilizing the existing productive facilities of the ZTMW
and raw materials from Volnogorsk Mining and Smelting Works and Irshansk Ore Mining and
Dressing Plant, it is expedient to set up production of 50-60 ths. tons of pigmentary
titanium dioxide per year. Works on arrangement of this production will last for 2-3
years, while the anticipated sales are estimated at some USD 100 mln. It is expedient to
sign long-term contracts (for up to 10 years) to supply concentrated ilmenite to
Ust-Kamenogorsk Titanium and Magnesium Works and AVISMA. In return, the Ukrainian party
will acquire the needed volumes of high-quality certified titanium sponge, as well as
titanium ingots and semis certified by the leading European and American companies.
Simultaneously, during 2-3 years, it is proposed to estimate the actual demands of Ukraine
for structural titanium for the upcoming 10 years.
Profits from sales of pigmentary titanium dioxide should be
used to establish production of primary titanium in Ukraine, based on fundamentally novel
technologies to ensure high quality and low production costs. We are aware of potential
investors willing to invest in establishment of titanium dioxide production.
In conclusion, it is worth mentioning that restructuring of
the ZTMW should be backed with approval of the privatization program for the newly
established enterprises. This will be the only way to attract actual investors. We are
confident that establishment of the mentioned specialized titanium and magnesium plant
will greatly facilitate attraction of the suitable investors.