If the Western world was to be cut off from fluorspar supply, or running out of it, many industries would come to a standstill or face major difficulties:
- The production of aluminium and steel requires fluorspar in form of acidspar and metspar, respectively, which are used as a flux to lower the temperature of the slag and to increase its reactivity for removal of impurities.
- Steel mills require 4.5-9 kg (10-20 lb) of fluorspar per ton of steel (or about 3 kg / 6.5 lb of metspar).
- Aluminium producers require about 27 kg (60 lb) of high-grade fluorspar per ton of aluminium (“fluoride consumption… averages 60 lb of aluminum fluoride and 50 lb of synthetic cryolite [produced by reacting diluted hydrofluoric acid and aluminium hydrate] per ton of aluminum ingot produced. This is equivalent to about 70 lb of HF [hydrofluoric acid] per ton of aluminum. In the United States, the amount of HF required is probably 20% less, or 56 lb/ton, owing to recycling of fluoride values from spent potlinings and flue gases, as well as the manufacture of aluminum fluoride and synthetic cryolite from fluorosilicic acid.” McKetta, Encyclopedia of Chemical Processing and Design).
- Roskill estimates that half of all new medicines contain fluorspar derivatives.
- Exploration for metals relies on drilling, whereas the analysis of drill core samples sometimes relies on hydrofluoric acid (produced from acidspar) due to its ability to efficiently dissolve most oxides and silicates.
- The mining industry oftentimes requires hydrofluoric acid for separating ore from surrounding material.
It would be bold to call fluorspar the world‘s most important commodity, but what other mineral or element could possibly be a contender?
Fluorite (called “fluorspar“ in the industry) is one of the most abundant minerals on this planet, widely dispersed in the earth‘s crust. However, it‘s all the more rare to find high enough grades (>20% CaF2) and quantities to justify a primary fluorspar mine. As such, fluorspar is produced mostly as a by-product from mining other commodities, first and foremost rare earth elements (above all China) and silver (above all Mexico).
With Mexico being by far the most important fluorspar supplier to the US, recent supply disruptions revealed the urgent need to diversify supply chains. More and more companies are waking up and realizing how dangerous it is to rely on a single supplier, or country, for their raw materials.
Recently, the Las Cuevas Mine in Mexico was at risk of closure due to COVID-19 safety restrictions imposed by the government. This prompted companies like GlaxoSmithKline and Cipla, two of the world‘s largest manufacturers of inhalers used by patients with respiratory diseases (the group most vulnerable to COVID-19), to send letters of urgency to Las Cuevas‘ owner (Orbia Advance Corp.; market cap: $3.6 billion USD) and the Mexican government to keep the mine in operation. About 80% of the world‘s inhalers use fluorspar which is mined at Las Cuelvas, the largest fluorspar producer in the world accounting for around 20% of global supply. “Without the mineral [fluorite], the medical supply chain is dead,“ said Sameer Bharadwaj, President of Koura, Orbia‘s fluorspar branch, and added: “Many of our customers are out of supply and we are receiving more orders because they are anticipating increased demand for COVID-19.“
Mexico, Vietnam, South Africa, and China currently supply more than 90% of US fluorspar demand. With a share of about 70%, Mexico accounts for the single most important source of fluorspar imports into the US. However, Mexico‘s largest fluorspar producer, Orbia, has an evolving strategy to use more of its own fluorspar for downstream value-added speciality fluor products (e.g. hydrofluoric acid, refrigerant gases, aluminium fluoride) with fewer fluorspar exports available for US companies such as Honeywell and Chemours (DuPont‘s spin-off in 2015). As Orbia becomes more vertically integrated, there is a danger for its US customers that more and more fluorspar becomes unavailable (2015: 60% of Orbia‘s fluorspar was sold to the open market, including the US).
With China accounting for around 60% of global fluorspar mine supply, there is not much margin of maneuver for US companies requiring fluorspar to keep their businesses alive, especially when considering that China has become a net importer of fluorspar in 2017, a major shift that sent market prices skyrocketing and reaching multi-year highs in 2018 and 2019. The shock wave continues to be felt in the market as China used to be the number one exporter of fluorspar to the Western world.
With COVID-19 disrupting global trade and supply chains, domestic supply of critically needed commodities, especially fluorspar, is urgently needed in the US. Many governments (including the US, EU, and China) have classified fluorspar as a critical or strategic mineral as it can not be recycled and is vital for a number of large and important industries, putting economies and health systems at risk. The US is the 4th largest producer of crude steel and the world‘s largest manufacturer of hydrofluoric acid (Honeywell and Chemours). Both industries rely heavily on fluorspar. An estimated half of all new medicines contain fluorspar derivatives. According to Executive Orders 13817 (December 2017) and 13953 (September 2020), US producers of “critical minerals“ can expect government support, such as expedited permitting, federal investments in mining and processing, tax incentives, and data sharing.
Fluorspar Growth Drivers
According to Verified Market Research (August 2020):
“Fluorspar Market was valued at USD 2.6 Billion in 2019 and is projected to reach USD 6.1 Billion by 2027, growing at a CAGR of 4.8% from 2020 to 2027.”
According to Global Market Insights (December 2020):
“Global fluorspar market share is depicting immense traction majorly due to extensive application of the compound in the manufacturing of steel and aluminum. Increasing disposable income among people along with urbanization has driven the need for construction of residential and non-residential buildings, primarily in developing nations like Asia Pacific and Latin America. Additionally, increasing use of fluorochemicals in various critical industries will positively influence the product demand.
The fluorspar market segments based on product are classified as metspar, acidspar, ceramic, and others. As per volume, acidspar, that is primarily converted into hydrofluoric acid with the help of sulfuric acid, holds the highest segmental share. In the manufacturing of synthetic cryolites and organofluorides, hydrofluoric acid is extensively used. These factors and staggering revenue will boost the fluorspar industry share from acidspar is expected to grow at 8% CAGR through 2024.
In terms of application, fluorspar industry is classified into four main segments namely, steel production, aluminum production, hydrofluoric acid, and others. Hydrofluoric acid is one of the strongest inorganic acid that is extensively used for industrial purposes. With respect to revenues, hydrofluoric acid segment is projected to witness a CAGR of over 8% during the period of study.“
Proliferating demand for ceramic parts in several industries like engineering, biomedical, electronics, chemicals, and aerospace is a primary factor supporting the demand for the product. They carry superior thermal stability at high temperatures and find usage in high-temperature environments. These products are porous, hard and brittle in nature and as a result, are also used to make bricks, pottery, cement, tiles and glass. The ceramic segment is subjected to record nearly 7.5% CAGR up to 2024.“
According to Transparency Market Research:
“The growth of the global [fluorspar] market is primarily driven by increasing demand for fluorochemicals. Moreover, the growth is also driven by the increasing requirement of steel and aluminum due to the flourishing construction sector. The growth of the market is also influenced by the growing use of fluorspar in the lithium ion batteries.
The companies in the [fluorspar] market are pouring heavy resources in order to establish themselves above their competitive rivals. Moreover, it is projected that new players will enter the global market in the near future. This is projected to intensify the competition among the players and help driving the overall market development. The companies in the global market are expected to resort to aggressive growth strategies such as mergers, acquisitions, takeovers, strategic alliances, and partnerships in order to stay ahead of the competitive curve. These players in the market are expected to leverage the state of the art technologies and constant technological advancements to their benefit and generate more profits and expand their business.
Acidspar Emerges as In-demand Product Segment: [The acidspar] segment […] is expected to remain a highly profitable product segment… Acidspar is primarily employed in the production of hydrofluoric acid, which is further employed in the manufacture of fluorocarbons such as hydrofluorocarbons (HFC) and hydrochlorofluorocarbons (HCFC). In addition to that, fluorspar is utilized to produce fluoropolymers and cryolite. Cryolite is mostly used in aluminum smelting. Furthermore, aluminum fluoride (AlF3), which is employed in aluminum smelting, is mostly derived from acidspar. It is also employed to produce sodium fluoride salts, which are used in toothpastes. In terms of value and volume, acidspar was followed by metspar…
Metspar is utilized as flux in the production of steel, as it helps lower the melting point of the metal. This saves money and energy. Metspar is employed in the metal manufacturing process to remove impurities such as sulfur and phosphorus. Ceramic grade fluorspar has applications in the production of ceramics, specialty ware, and enamel ware. Others segment, such as optical grade and lapidary grade, held minimal share of the global fluorspar market…
Application-wise, hydrofluoric acid contributed to 40% share of the demand in the global fluorspar market. However, increasing investments in infrastructure projects globally is augmenting the demand from aluminum and steel production application.“
Fluorspar is a valuable commodity with a global market value of $2.6 billion USD in 2019. However, fluorspar‘s true value lies in the multiple downstream levels and applications (where it is oftentimes used as an indispensable component) worth approximately $120 billion USD annually.
Downstream applications and end uses include (amongst others) lithium batteries, composites for automobiles, aerospace applications, microelectronic sensors, solar panels, LCD screens, speciality coatings (e.g. Tefal, Gore-Tex, flame retardant clothing), ceramics, glass, food packaging, active pharmaceutical ingredients, anaesthetics, toothpaste, mouth wash, agrochemicals, light bulbs, refrigerants, nuclear power. Major consumers of acidspar and hydrofluoric acid include Orbia (ex-Mexichem), Honeywell, Chemours (ex-DuPont), Daikin, Solvay, Lanxess, Fluorsid, DDFluor.
Fluorspar Mining
For many key industries, there exist no substitutes for fluorspar. As fluorspar is consumed by the industry, it cannot be recycled and thus must be mined on a continuous basis.
The US used to be the world‘s number one fluorspar supplier (1910-1950s). Due to foreign competition, its dominance shrank thereafter, with only one fluorspar producer left in 1982. By 1997, the entire US fluorspar mining industry was wiped out. Since then, the US has been a 100% net importer of fluorspar.
“Depleting high quality fluorspar reserves, high cost of acidspar production, and likely continued pressure and perhaps further capacity reductions in China, combined with continuing demand for fluorspar in chemical, steel and aluminium markets mean that there is a case for alternative and new fluorspar sources to come on line.“ (Imformed Industrial Mineral Forums & Research, 2019)
Fluorine‘s (F) abundance in the solar system is exceptionally low. Yet in the earth‘s crust, it‘s one of the more abundant elements and is widely dispersed in nature. Elemental fluorine does not occur naturally. Instead, all fluorine exists as fluoride-containing minerals. Many fluorine-bearing minerals are known, but of paramount commercial importance is fluorite (CaF2). There exist only few primary fluorspar mines in operation globally today. Fluorite is not an uncommon mineral and can be found on all continents, but it is exceptionally rare to find high enough grades (>20% CaF2) with large enough quantities to justify a commercial mine.
Mined fluorite does not require sophisticated hydrometallurgical processing and only requires physical upgrading to a high enough purity for the target end-use. Most fluorspar ores require upgrading through beneficiation suited to the source and end markets. Metspar is produced by sorting, crushing, grinding and sieving, while acidspar also requires removal of impurities by flotation. High metspar grades with small grain size are favored by steel mills (faster reactivity times) and have been selling for a premium in the past.
St. Lawrence Fluorspar Mine
- Location: Newfoundland, Canada
- Operator: Canada Fluorspar Inc. (private)
- Resources: 9.1 million t @ 42% CaF2 (Indicated) and 1 million t @ 31.1% CaF2 (Inferred)
- Life of Mine: 30 years
- Capacity: 200,000 t acidspar annually (after ramp-up and mill commissioning)
- Pre-Production CAPEX: $154 million
- Deposit: Fluorite veins
- Mine: Open-Pit (underground thereafter)
- Operation Start: 1930s-1978, 2017 (first shipment of 5,000 t acidspar to the US in 2018)
- Notes: In 2011, Arkema Inc. (current market cap: 7 billion EUR) invested $15.5 million for a 19.9% equity stake in Canada Fluorspar. Thereafter, both formed a 50/50 partnership funded by Arkema ($60 million) and Canada Fluorspar ($14 million). In 2014, Canada Fluorspar was acquired by US-based private equity firm Golden Gate Capital in an all-cash deal at of $0.35/share (~66% premium to prior trading range). This valued the deal at $39 million, based on 111 million shares at that time. The stock was delisted shortly thereafter. If fluorspar was better known to investors back then, the sales price might have been higher considering the magnitude of the mine‘s projections (200,000 t acid-spar x $500/t = $100 million annually x 30 years = $3 billion).
- Source #1; Source #2; Source #3
Nokeng Fluorspar Mine
- Location: South Africa
- Operator: SepFluor Ltd. (private)
- Reserves: 3.2 million t CaF2 (12 million t @ 26.6% CaF2)
- Life of Mine: 19 years
- Capacity: 180,000 t acidspar and 30,000 t metspar annually (with plans to add value by also producing hydrofluoric acid and aluminium fluoride)
- Pre-Production CAPEX: $140 million
- Deposit: Hematite-Fluorite
- Mine: Open-Pit
- Construction Start: June 2017
- Operation Start: August 2019 (maiden shipment of 10,000 t acidspar to the US in December 2019)
- Notes: Unique flotation process developed due to high iron content. One of only three significant fluorspar production newcomers in the past 10 years. South Africa‘s second active fluorspar mine. SepFluor has agreed to sell the 40% forward fixed at prices between $240-260 per t in exchange for funding (Debt: Consortium of Nedbank along with Dutch and German development banks; Equity: Led by David Twist, Rudolph de Bruin, Carlo Baravalle).
- Source #1; Source #2; Source #3
Vergenoeg Fluorspar Mine
- Location: South Africa
- Operator: MINERSA Group (private)
- Reserves: 174 million t @ 28.1% CaF2
- Life of Mine: >100 years
- Capacity: 240,000 t acidspar and metspar annually
- Deposit: Hematite-REE-Fluorite
- Mine: Open-Pit
- Operation Start: 1956
- Source
Doornhoek Fluorspar Project
- Location: South Africa
- Operator: Eurasian Resources Group (private)
- Resources: 516 million t @ 13.82% CaF2 (Indicated + Inferred)
- Life of Mine: >100 years
- Capacity: 240,000 t acidspar annually
- Deposit: Dolomite-Quartz-Pyrite
- Source #1; Source #2
Stephan Bogner
Contact
Rockstone News & Research
Stephan Bogner (Dipl. Kfm., FH)
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Email: info@rockstone-news.com
Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any commodities. The author holds no direct interests or financial instruments related to the mentioned commodities or companies. All views and forecasts reflect the state of knowledge at the time of publication and are subject to change. There is no guarantee that future developments will occur as described. Investing in commodities involves risks. Independent advice from a licensed financial advisor is strongly recommended. Cover image source
