Fluorspar: Developing projects for ‘at-risk’ mineral

What a difference a year makes. In the last 12 months, the fluorspar industry has seen a project mothballed, exports from China stutter and some new projects gain traction.

China remains the largest producer of fluorspar, with an output of 3.7m tonnes in 2013, according to IM Data. Mexichem Fluor SA de CV, meanwhile, is pipped to have an output of 630,000 tonnes this year, with Mongolian and Russian JV Mongolrostsvetmet following closely behind (see pie chart).

British Fluorspar

In terms of new projects, this year has seen British Fluorspar’s Peak District mine start production in March.

British Fluorspar is owned by Italy’s Fluorsid Group, that bought former Glebe Mines assets, as it was then known.

Glebe was put on care and maintenance in November 2010 and its assets bought, by competitive tender, on 17 May 2012 after the operation was put into receivership.

British Fluorspar restarted production at the Glebe mines site in April this year, Lorenzo Di Donato, managing director, told IM.

The company is targeting production at 65,000 tpa. It sent its first shipment in May 2013.

Operations at the company’s Cavendish Mill site could increase, but it says it is happy with the size of the operation as it stands.

“The area has good potential to increase, but to be honest we think this size is optimum. We think this is the most efficient size for us. We do not want to increase production if that would not improve the efficiency of this mine,” Di Donato said.

“The nice coincidence is that we took over the assets on 17 May 2012 and then exactly a year later, on 17 May 2013, the first vessel of 5,000 tonnes reached Cagliari gliari port,” Di Donato said.

Belonging to a fluorochemical group, the company is less exposed to market movements in fluorspar prices. Besides, it is a medium-size operation with a very functional location to serve the European market, Di Donato added.

“As we stated in the latest [IM] Fluorspar conference in Vancouver, our company has a dual strategy in the sense that we act as both a standalone company and represent a partial backward vertical integration for Fluorsid Group” Di Donato highlighted, adding: “Although we are certainly not the cheapest source of fluorspar in the world, we are competitive enough to sell to our parent company and to other HF producers. We believe this is the most promising set-up for our group’s assets.”

“The European market is a net importer [of fluorspar] and it is a critical raw material in [the UK] and in Europe, and so there is no reason why the market cannot welcome more quantities,” he continued.

“Our view, and that of the industry, is that in China the trend of decreasing exports will persist compared to some years ago. Going forward, this translates into a future lack of ‘low impurity’ product. Hence, we are convinced that our real driver of success will stand in our ability to meet the needs of the market in terms of reliability and quality of both products and services, which we are confident to be able to deliver,” he concluded.

Tertiary Minerals

Tertiary Minerals is working hard to bring three projects to market. Two of the projects, Storuman and Lassedalen, are in Europe. Storuman, in Sweden, is further advanced than Lassedalen, Norway, and is targeting future production of at least 100,000 tpa acidspar.

In March 2011 the maiden JORC compliant mineral resource was estimated for Storuman (see below).

Storuman is located in an area with well-established infrastructure, Tertiary said.

It is located adjacent to a sealed highway and 25km from the regional town of Storuman, which is connected by rail and a sealed highway to the city and port of UmeŒ on the Gulf of Bothnia. The sealed highway continues in the opposite direction to the ice-free port town of Mo-I-Rana in Norway. There are also sealed highway routes to the major regional port of SkellefteŒ. Each of these three named ports is roughly 250km from the project site.

The company has not advanced Lassedalen at the same pace. Tertiary holds exploration permits in Norway, but is working to develop Storuman first, Richard Clemmey, operations director, told IM.

“Since the scoping study we have not made a great deal of progress. We have to prioritise. Sweden is more advanced. Norway is a very different deposit as it is higher grade, but it is smaller. It is underground and would require more drilling,” he explained.

“We still say Norway is important, but in terms of prioritising projects, Sweden is the highest priority,” he affirmed.

Last year the company secured a third project - the MB Fluorspar deposit in Nevada, US. Here the company recently received approval to drill by the US Bureau of Land Management (BLM). The drilling contract has been awarded to Boart Longyear.

“We have three aims with this project,” Clemmey told IM: “We want to drill an area which will give an initial 10-year mine life; we know there is a higher grade zone within the mineralisation, so we want to target that and, finally, there is an area which shows sign of having fluorspar at surface, so we want to look into that.”

Clemmey also highlighted the good logistics of the project, underlining that while Tertiary is targeting European and US markets with its three projects, it could, in the future, export from MB to China.

The MB Project claims are located 19km southwest of the town of Eureka in central Nevada. Eureka is on US Highway 50.

“Look at the great logistics: We have a rail link all the way to San Francisco, we do think we are in a good position to be competitive,” explained Clemmey.

This is an area which has historical (non-JORC) data attached to it as it was first explored in the 1960s by Union Carbide for beryllium. Since then it has been explored Ñ for different commodities Ñ by a number of different companies, including Asarco, Bear Creek Mining, US Borax, Amselco, Arimetco and Homes take. A total of 108 drill holes have been completed.

Prima Fluorspar

Despite falling fluorspar prices and a depressed market, junior developer Prima Fluorspar remains upbeat about opportunities for industrial minerals miners.

“At the end of the day the world needs fluorspar. There’s not a single commercial mine in Canada or the US in production,” CEO Robert Bick told IM. “We are confident we are sitting on a significant resource.”

The company is developing the Liard Project in northern British Colombia (BC) with an historic geological resource estimate (non NI 43-101) of 3.2m tonnes averaging 32% CaF₂. Also, developing a resource in Canada, but in St Lawrence Newfoundland, is Canada Fluorspar. The company said in its prefeasibility study that it expects to produce 131,000 tpa fluorspar (see below).

“There’s always room for good fluorspar projects,” Bick said. “In addition, the fluorspar market is shifting with China to become a net importer in the foreseeable future

Bick describes why investors are intrigued by fluorspar. He sees a positive space for industrial minerals projects.

“What we are hearing is that people are looking for a commodity that’s used every day and for which there is a market. That gives shareholders comfort,” he explained.

Canada Fluorspar

Canada Fluorspar is developing the Newspar project in St Lawrence, Canada, jointly with US fluorochemicals producer, Arkema.

The company initially said it would be online at the end of this year, following its first feasibility study. But it undertook a second study at the end of 2012, which upped the capex and opex, but also increased the size of the resource.

By July 2013, the company had released a number of drilling results from its phase two and three drilling programmes on the southern extension of the Director Vein and Grebes Nest Vein on assets owned 100% by CFI. The drilling campaign follows on from its prefeasibility study, which was released in February this year.

“If we come out of the current review process with our partner, Arkema, positively then it’s a two year build to be in full construction,” Lindsay Gorrill, CEO, told IM.

“We are doing two other veins which have returned very high grade ore,” he continued.

Other companies have spoken highly of the model that Canada Fluorspar has, in terms of the JV with Arkema.

“I think Canada Fluorspar is in a really good position,” Tertiary’s Clemmey told IM.

“People ask me about their structure and I think it’s a great one. To actually pull that deal together is quite something,” he added.

Freeport Resources

There is a third company which is looking to exploit Canadian reserves of fluorspar. Freeport Resources is a junior developing ‘The Q’ project, in near Prince George, BC, which also contains molybdenum, niobium and rare earths as well as fluorspar.

The company so far has remained below the radar and has not submitted any new information since the IM Fluorspar Conference in October 2012. It is marketed principally as a molybdenite resource, with fluorite as a byproduct.

There is a historical (non-NI-43-101) reserve estimate of 24m tonnes averaging 11.5% CaF₂ including 1.8m tonnes of 15% ore, which was calculated in 1984

Sephaku Fluoride Ltd

Sephaku Fluoride is developing a vertically integrated fluorspar mine and beneficiation project in South Africa. The project is unique in that it is developing more than one fluorspar deposit as well as a downstream project.

The deposits are at varying stages of development. SepFluor’s Nokeng mining project, the closest to production, will have its own concentrator and will supply CAF₂ , primarily as feedstock, for the company’s planned fluorochemical plant Ñ currently in construction Ñ for the production of hydrogen fluoride (HF), aluminium tri-fluoride (AlF₃) and anhydrite (CaSO₄).

The Nokeng mining project, where the company has identified three high-quality adjacent haematite-fluorspar deposits, is located in South Africa’s Gauteng province, 80km north of Pretoria, the country’s administrative capital.

This year, the company experienced some delays in developing Nokeng, due to a negative Record of Decision in regard to the Environment Impact Assessment (EIA) application, said CEO Alan Smith in a letter to shareholders in March. This was appealed by SepFluor, and eventually overturned.

The company also submitted a further set of metallurgical recovery assessments after its Competent Person was reluctant to accept the company’s anticipated metallurgical recovery rate, he added.

“The company was confident that the recoveries it had advanced were correct, and so initiated a further set of metallurgical assessments at MINTEC to ensure that the reservations expressed by the Competent Person could be addressed,” Smith continued. “These tests were completed successfully and [the Competent Person] has now accepted the higher recoveries advanced by SepFluor,” he added.

Because the company wanted to have the correct information before going to market, funding was halted temporarily.

Within Nokeng, the Plattekop deposit has 2.8m tonnes of measured mineral resource, at a grade of 42.2% CaF₂, while at the Outwash Fan deposit, the company estimates a measured mineral resource of 8.2m tonnes, at a grade of 24.6% CaF_2. A third deposit, called Wiltin, is being explored.

Planned run of mine production from Nokeng, at a low stripping ratio, is 600,000 tpa, while estimated operating costs in the first few years are low, at around $100/tonne.

A second project, Wallmansthal, is not as far advanced as Nokeng. The project holds around 5m tonnes of mineralised material to a depth of 70 metres with a grade estimate of around 47% CaF₂.

Although this is not a compliant estimate (NI 43-101/SAMREC/JORC), the deposit has some historical exploration information available. For example, 11 holes were drilled at the site by General Mining Corporation (now BHP Billiton) in the 1960s.

An exploration campaign made up of 14 drill holes is now underway at the property. Two holes were located to test the veracity of the historical data for use in creating a compliant resource statement, while a third hole was drilled to test the depth extension of the deposit below 70 metres. This work was eventually stopped at 180 metres depth due to the limits of the drilling equipment used.

Other projects stutter

However, while the above projects are gaining traction, or are in different stages of development, the same cannot be said for all projects.

British fluorspar miner Fluormin Plc placed the Witkop mine on care and maintenance in October, citing weakness in the fluorspar market.

“Recommencement of operations will be contemplated when the fluorspar industry enters into a more favourable price environment,” Mark Bolton, company CEO, said at the time.

“The prevailing price for acid grade fluorspar has fallen below current operating costs,” the company outlined in a release to the London Stock Exchange (LSE).

However, it would not get the chance to reopen the mine. On 17 May 2013 Fluormin was sold to Vanoil Energy, a Canadian oil and gas company, after it launched a share for share offer worth £14.3m ($21.6m*).

So far it is unclear what Vanoil intendS to do with Fluormin’s Witkop asset. The company was contacted by IM, but declined to comment.



Beneficiation

IM speaks to Thomas Dahlke, Process Engineer at BUSS ChemTech AG about the benefication system. BUSS ChemTech are responsible for the design of the Gulf Fluor 50,000 tpa hydrofluoric (HF) plant in Abu Dhabi, which is expected to be producing by the end of this year. The plant is connected to 60,000 tpa alumium fluoride.

How is the project going?

The plant is well under construction and start up is expected by the end of this year, or at the beginning of next year; this is the largest single line plant worldwide. This size has never been built before.

How long does it take to set up a plant?

The engineering from the beginning to start up takes about 24 months.

Do you think companies now need to be vertically integrated?

The answer is two sided when you speak about other materials such as fluorosilicic acid. There you are bound to the phosphoric acid plant location as it wouldn’t be economical to ship fluorosilicic acid around the world to a production site.

In comparison, with a fluorspar plant you can probably build it close to an aluminium smelter or close to any downstream plant. What we have seen is a growing interest in the industry of all the downstream fluorine products. These producers seek cooperation agreements with phosphoric acid producers for their HF supply.

Regarding fluorspar, there is interest in HF plants producing from fluorspar, worldwide.

Where have you seen interest?

There is a lot of interest in fluorosilicic acid. There are projects worldwide who we have to actually have to do the initial planning and calculations. So we are at that preplanning phase, the first phase.