Refractory supplier RHI Magnesita is to spend €20 million to expand its Chinese dolomite site.

It said the investment in the Chizhou, Anhui Province, China, plant will help address global pressures in the supply of raw materials to the refractory industry and provide additional volumes to its customers worldwide.

The Chizhou site includes a dolomite mine and raw material production as well as facilities for the production of dolomite-based finished products.

Successful trials are already underway in the brick plant in Chizhou where it is planned to start production by the beginning of 2019. The raw dolomite mine is planned to resume operation by the end of 2019. The overall investment will eventually lead to the creation of 250 jobs.

Stefan Borgas, CEO of RHI Magnesita, said: "After the completion of the investment, RHI Magnesita will be able to offer a fully integrated dolomite source in each of the big regions of the world to our customers and simultaneously offer dual sourcing options."

"With this investment, we can offer our customers in Asia shorter lead times and provide additional capacity to customers in North America, Europe and Asia from local sources. It strengthens our presence and offering in a strategically attractive market for us long-term."

The refractory industry as a whole is facing a number of challenges, particularly in relation to the supply of basic raw materials. Stricter environmental regulations in China have led to local plant closures, resulting in shortages of magnesite and dolomite, increases in raw material cost, and supply security issues.

These developments have accelerated the shift from magnesia to dolomite-based products. The all-time high in stainless steel production has fuelled demand for refractory products and compounded the pressure on raw material supplies, creating challenges for all market participants.

RHI Magnesita employs around 2,000 people at production sites in Dalian, Bayuquan and one production and raw materials site in Dashiqiao, all in Liaoning Province, China as well as at the head sales office in Shanghai.

The company said growth opportunities in China arise primarily from the long-term consolidation of the Chinese market, which will lead to a shift towards high-grade refractories.