Earlier this decade we had a flirtation with coverage of the Fluorspar space. We covered Canada Fluorspar and then were working on a sector review when CFI was taken over (as was the London-listed Fluormin) and the listed space shrank to enough players that everyone could fit in a phone box. Our encounter at the Argus Metals Week conference with DFD Chems (the largest Chinese player in Fluorspar) and Mexchem, the largest non-Chinese player renewed our attention on this metal. While unlikely to spark any sort of Fluoroboom, this mineral is defiantly up there with Vanadium as one to watch over the next two years.
Fluorspar is scarcely the word on everybody’s lips and in fact hardly gets a mention despite its economic importance and the grip that China has had on supplies in recent years. Our first interaction with mineral was in relation to some rather unique REE deposits in New Mexico that occurred in concurrence with Fluorspar. However, Fluorspar is ranked fifth in the United States’ list of foreign source-reliant minerals and included in the European Union’s list of 14 critical minerals.
Calcium fluoride (CaF2) comes in three industrial grades:
- Acid grade (>97% CaF2)
- Ceramic grade (93-97% CaF2)
- Metallurgical grade (60-93% CaF2).
Calcium fluoride is a vital component in several industrial applications, including steel production. It is also used to make hydrogen fluoride (HF) which, in turn, is used in the production of refrigerants and to make: aluminium tri-fluoride (AlF3), critical in aluminium smelting; uranium fluoride (UF6), used in nuclear power stations; and lithium hexafluorophosphate (LiPF6), used to make lithium batteries. Tri-fluoride used in the manufacture of various downstream products, which are then re-imported at high cost.
Fluorspar is used in the production of hydrofluoric acid which is the primary feedstock for the manufacture of virtually all organic and inorganic fluorine-containing compounds including fluoropolymers and fluorocarbons. Some examples are anaesthetics, non-stick coatings, and fire retardant clothing. It is also used in the production of electronic components, aluminum, and steel.
Hydrogen fluoride is generally made from acid-grade fluorspar, the top 97.2% grade. Fluorspar-linked products are used in refrigeration, ceramics, chemicals, dental products and pharmaceuticals, as well as nuclear physics.
Fluorspar is not without its alternatives/substitutes. Aluminum smelting dross, borax, calcium chloride, iron oxides, manganese ore, silica sand, and titanium dioxide have been used as substitutes for fluorspar fluxes in the steel industry while the by-product fluorosilicic acid has been used as a substitute in aluminum fluoride production and also has the potential to be used as a substitute in HF production.
Fluorite is especially critical for making electrolytes for lithium batteries and a key ingredient in industries including pharmacy, chemical, optics and environmental protection.
Fluorite (CaF2), is virtually the only fluorine mineral of commercial significance. When mined it is usually called fluorspar. Another mineral, cryolite (Na3AlF6), was important last century for the production of soda, alum and aluminium sulphate, and also in production of aluminium, but the only known source, in Greenland, has been exhausted. Most cryolite now used is manufactured.
Fluoroapatite, the major phosphate-bearing mineral in sedimentary phosphate deposits, is a major potential source of fluorine (commercially produced phosphates may contain up to 3-4% fluorine).
Fluorite occurs in a wide range of geological environments. The most commercially important deposit types include: hydrothermal veins and stockworks associated with felsic igneous rocks; stratiform replacement deposits in carbonate rocks; skarns and other contact metamorphic rocks; at the margin of carbonatite and alkali igneous rock complexes; and residual deposits in the regolith. Fluorite also occurs as a gangue mineral in some base metal deposits (e.g. Mississippi Valley type deposits). These consist of veins or replacement bodies and cavity fillings of fluorite, carbonates, quartz and silver–lead–zinc mineralisation in carbonate sequences. Other deposit types (for fluorine) of lesser economic significance include pegmatites and lacustrine sedimentary deposits (e.g. Piancino in Italy).
Fluorite may occur as a vein deposit, especially with metallic minerals, where it often forms a part of the gangue (the surrounding “host-rock” in which valuable minerals occur) and may be associated with galena, sphalerite, barite, quartz, and calcite. It is a common mineral in deposits of hydrothermal origin and has been noted as a primary mineral in granites and other igneous rocks and as a common minor constituent of dolostone and limestone.
Source: China Shen Zhou
Fluorite is a widely occurring mineral which is frequently found in large deposits. Notable deposits occur in China, Germany, Austria, Switzerland, England, Norway, Mexico, and both the Province of Ontario and Newfoundland and Labrador in Canada. Large deposits also occur in Kenya in the Kerio Valley area within the Great Rift Valley. South Africa hosts the largest reserves of fluorspar at 41-million tons, followed by Mexico with 32-million tons and China with 21-million tons.
In the United States, deposits are found in Missouri, Oklahoma, Illinois, Kentucky, Colorado, New Mexico, Arizona, Ohio, New Hampshire, New York, Alaska, and Texas. Illinois was the largest producer of fluorite in the United States, but the last fluorite mine in Illinois was closed in 1995.
The graphic below shows the USGS’ current view of where the major Fluorite resources are distributed. The USGS has noted that identified world fluorspar resources were approximately 500 million tons of contained fluorspar. The quantity of fluorine present in phosphate rock deposits is enormous.
Current U.S. reserves of phosphate rock are estimated to be one billion tons, which at 3.5% fluorine would contain 35 million tons of fluorine, equivalent to about 72 million tons of fluorspar. World reserves of phosphate rock are estimated to be 18 billion tons, equivalent to 630 million tons of fluorine and 1.29 billion tons of fluorspar. Thus is not a shortage of Fluorspar resources only a shortage of production in the Western world at this time. However as we all know the mining capital markets are tough going even for well-known commodities let alone that of obscure elements such as Fluorspar. The key component in any plan has to be securing an off-taker arrangement. The rush for Lithium-Ion battery production creates a new universe of customers for this mineral.
China doing that thing it does
The Chinese government closely controls the total fluorite production through licensing requirements and production limitations. China has been the world’s leading producer over the last 20 years. The availability of Chinese material on the international market has decreased significantly over the past five years. The reasons for flat to declining production in China might be a combination of shutdowns for environmental reasons and its policies on export quotas and tariffs combining with rapidly increasing domestic demand.
It has been noted though that China has been producing about its theoretical share of the global resources meaning, as with so many things, it has squandered a potentially scarce asset while those it forced out of the market still have their resources relatively undepleted. This augurs for less Chinese influence on the market (from the supply-side at least) in the coming decades.
Fluorite’s last market surge was at the turn of the decade when its price went up over 192% between 2009 and 2011. The situation, in China at least, is showing a rapid price escalation in recent times as can been seen by the chart below showing the internal price in China in recent months.
Source: Sun Sirs CommodityData
Construction began on two fluorspar mines in the third quarter of 2017. Ironically, the St. Lawrence Mine of Canada Fluorspar (now a subsidiary of the French group, Arkema) is powering ahead and has an anticipated annual acid-grade fluorspar production capacity of 200,000 metric tons per year. First production was expected in early 2018. The Nokeng Mine in Gauteng, South Africa, owned by SepFluor (a wholly owned subsidiary of Sephaku Holdings Ltd listed on Johannesburg Stock Exchange) began construction in July 2017, with the first production anticipated for the first quarter of 2019. The mine is expected to produce 180,000 t/yr of acidgrade fluorspar and 30,000 t/yr of metallurgical-grade fluorspar.
Meanwhile, Mexchem (listed on the Mexican Stock Exchange), the major Western producer is enjoying the better prices and its sizeable market share.
The Worm Has Turned
It’s no wonder the bulk of the listed Fluorspar producers/developers faded from sight earlier this decade. Prices were poor and the Chinese were stamping on the market to make it their own. Now the improved situation is reviving production efforts outside China.
It will be interesting to see whether more players start to join the fray when they realise the importance of Acid-spar in Lithium-Ion battery electrolytes.