South Africa’s fluorspar industry
continues to struggle amid difficult market conditions, as
asset sales and infrastructure challenges squeeze investor
confidence in the industry.
South Africa has the world’s largest
fluorspar reserves, but its fluorspar miners are bearing the
brunt of uneconomic mining conditions, operational limitations,
punitive legislation and more recently, China’s
attempt to liquidate its own fluorspar inventories at record
Total fluorspar exports from South Africa have
decreased by over 22% since 2010, when prices started to
Out of the country’s three fluorspar
mines, Vergenoeg – owned by Minersa; Buffalo
– owned by Rigiro Stone; and Witkop – owned
by Vanoil Energy Ltd, only Vergenoeg was in production in
Most of the fluorspar mined from Vergenoeg is
acid grade and is exported to Europe, the United Arab Emirates
and India. However, small volumes are also consumed
domestically by the country’s only fluorochemical
Production at the other two mines –
Witkop and Buffalo – remained suspended because it was
uneconomical to produce fluorspar from these projects in such
weak market conditions, sources told IM
The previous owner of the Wiktop and Buffalo
mines, UK-based Fluormin Plc, disposed of them when the market
started to stumble in 2012.
The Buffalo mine was mothballed in 2008 due to
inaccessibility of high grade material, high phosphorous
occurrence and water shortages. The mine is now operating as
Rooiberg Stone and is producing aggregates for roads.
The Witkop mine was also put on care and
maintenance in 2012, when operating costs became challenging
against a backdrop of lower cost fluorspar production
worldwide. Although claims have been made that the Wiktop mine,
now owned by Canada-based Vanoil Energy Ltd, is likely to
resume operation by H2 2015, the viability of the project
remains bleak under current market conditions.
IM Data sources said that
producers who were struggling when prices were high are
unlikely to re-enter the market in the current environment.
South Africa has substantial deposits of
high-quality fluorspar, which have a range of uses mainly in
refrigerants, foundries and ceramics. At 41m tonnes, the
country accounts for the largest proportion of global reserves
(18%), followed by Mexico (14%) and China (9%).
FOB Durban prices down 24%
The price of South African acidspar (97%
CaF2, dry filtercake) began to fall in Q2 2014,
reaching an average of $355/tonne. However, by May 2014 these
prices had fallen to $325/tonne, which was on a par with prices
from China at the time.
According to IM Data, prices for
acidspar (97% CaF2, dry filtercake, FOB Durban)
dropped by 24% in 2014, falling from the highs of $415/tonne in
Q1 2014 to $315/tonne today.
The drop was a result of increasing market
pressure caused by large inventory stockpiles, limited demand
and weak growth in downstream markets.
Demand-side pressures have seen prices stabilise
across the world since February 2015, but demand-side pressures
from Chinese suppliers have prevented any significant upturn in
A further drop in acidspar prices from these
markets is likely in the coming months.
Acidspar exports double as metspar
South African acidspar exports doubled in 2014,
up by 105% year-on-year (y-o-y), while metspar exports bottomed
to below 50 tonnes – the lowest level in over a
This upturn in South Africa’s
exports is largely backed by price adjustments made by
suppliers in order to compete with low cost Chinese
While the majority of South Africa’s
exports were shipped into the European market, the US also
benefitted from the discounted prices seen from the
Total acidspar exports reached 255,769 tonnes for
2014. Imports into Europe were up 120% y-o-y at 153,256
Most of the mines in Africa have higher average
production costs, which compelled many to cut back production
as margins tightened.
Last year also saw the closure of the Okurusu
mine in Namibia, which equated to over 4% of acidspar
production outside of China, with smaller decreases in output
from Kenya and Morocco.
For premium fluorspar and graphite prices,
visit www.indmin.com/fluorspar /