Fluorspar miners look to divest operations
Published: Thursday, 22 October 2015
Companies try to offload low profit assets as acidspar available at rock bottom prices;
New supply makes up for South African closures.
Tough competition from emerging low-cost fluorspar suppliers
in Southeast Asia is making it difficult for producers
elsewhere to sustain mines that cannot match these new market
entrants on opex, IM learned at the Marrakech
Weak demand for fluorspar and downward pressure on prices
saw some operations close down last year, and the market has
since been further stifled by increasing competition from new
The negative market trend, which accelerated in the second
half of last year, has forced some mining companies with
fluorspar deposits to divest assets.
Conference attendees told IM that it is
hard for operations with high production and/or logistics costs
to survive in the current climate, especially when better
quality acidspar material is available from some sources at
market-bottom prices of $230-$250/tonne.
The projects most at risk of cancellation or divestment are
those with higher impurity levels, high processing costs and
longer distances to ports.
Nevertheless, the industry has seen some strong new players
entering the market recently, with Vietnam-based Masan
Resources, emerging as a major supplier despite the tough
market conditions, led by China’s increasing
dominance in fluorochemicals and its slowing economy.
Further, Thailand and Myanmar have also joined the supply
chain, with both the countries selling material within Asian
free trade zone countries at a highly competitive price
Supplies from this region compensate to some extent for the
closure of the Witkop and Buffalo fluorspar mines in South
Africa and the potential mothballing of Okorusu in Namibia,
which faces being shut down owing to poor demand for its
production. Competition from China remains the main challenge
for these projects.
Although the industry remains pessimistic over the demand
outlook for fluorspar, delegates in Marrakech agreed that the
key to sustainability is lowering costs, in order to cope with
reduced margins in the current buyer-driven market.