Investment in Russian High Purity Quartz Production Project

Sumitomo Corporation (Head Office: Chuo-ku, Tokyo, Japan; President and CEO: Kuniharu Nakamura) will take a 28.69% participatory interest in LLC Russian Quartz (Head Office: Chelyabinsk State, Russia; CEO Leonid Kuzmin; hereinafter “RQ”) realizing its participation in a circa JPY5 billion (USD50 million) high purity quartz production project in Russia.

High purity quartz is a powder form product, produced by crushing quartz ore, which are purified through separation and chemical reduction. It is the main raw material for crucibles*1 that are used in the production process of silicon wafers*2, which in turn are the raw materials for semiconductors and solar cells. It is also the main raw material for quartz ingots*3 which are used for the production of tubes and rods that are in turn used for the production of optical fibers and high tech equipment parts. It is therefore a crucial raw material for the semiconductor and solar cell industries.

RQ was established in 2011 as a successor to the quartz ore purification business of OJSC KGOK (Head Office: Chelyabinsk State, Russia; CEO Vadim Kuzmin), which continues to be Sumitomo Corporation’s partner in this business. As its Phase I operation, in addition to the dry processing plant of 6000 ton, RQ has completed a 3000 ton per annum production facility of high-purity quartz in April this year, and is in the process of attempting to produce a higher purity quartz product. RQ’s mine possesses an abundant reserve of one of the world’s top quality quartz ores. This is a crucial factor in the production of crucibles for semiconductors, as semiconductor grade wafer production requires a stable supply of 99.999% plus purity high purity quartz, which in turn relies on the stable supply of high quality ores.

Concurrent with the investment, Sumitomo Corporation has obtained the exclusive sales rights for RQ’s high purity quartz within the Asian market. Sumitomo Corporation intends to leverage its network in providing customer support and product quality improvement through improved market communication.

*1 Crucibles are used for converting high purity polycrystals into high purity monocrystals.

*2 Wafers are produced by slicing silicon monocrystals and then polishing and cleaning the surfaces of the sliced products. Higher purity wafers are used as circuit boards which make up integrated circuits such as LSIs and CPUs. Wafers for solar cells require somewhat lower purity monocrystals.

*3 Material from which quartz products are produced.

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[About LLC Russian Quartz]
Location : Kyshtym, Chelyabinsk, Russian Federation
Established : August, 2011 for the purpose of production and sale of high purity quartz
LLC interest holders : Open Joint Stock Company KGOK 41.78%
Limited Liability Company KVARTZVIK 0.85%
Open Joint Stock Company RUSNANO 28.69%
Sumitomo Corporation 28.69%
Production capacity : 3000tpa as of completion of Phase I in April 2013