Sepfluor again puts back fluorspar production target at Nokeng

By Michael Greenfield
Published: Tuesday, 26 February 2019

Sepfluor will miss a target for production of the first fluorspar from its Nokeng project in South Africa by the end of February, according to a video published by the company on its website.

The Nokeng mine, processing plant and concentrator, with capacity for 210,000 tonnes per year of fluorspar, is near Rust de Winter in Gauteng province. Construction, at an estimated cost of 1.7 billion rand ($123.3 million), was delayed by bad weather in November and December, market sources have said.

Sepfluor told Fastmarkets IM in April last year that it would make its first trial shipments in January and February 2019. When the company presented at Fastmarkets’ conference in South Africa late in September 2018, however, it revised this date to the end of February.

The project is 93% complete, it subsequently said in a video published on its website on January 23, although it did not disclose what caused the delay or what parts of the plant have yet to be completed.

The delay was unsurprising given the complexity of the operation, Sepfluor’s ambitious targets, and the poor weather conditions late last year, market observers said.

"It is normal that unforeseen problems will arise, and it would be no surprise to see further delays. It is common in such complex operations," a market source said.

View of the concentrator plant looking east

The same source, who visited Nokeng at the start of the third quarter of 2018, had previously told Fastmarkets IM that he expected delays. Having now seen recent photographs of the site, he remarked on the good progress that Sepfluor has made since that visit.

"Rumors regarding Sepfluor are varied and difficult to corroborate. In any case, it is clear that they are making good progress and they have started hiring local personnel," a Europe-based hydrofluoric acid producer added. "A start to production is only a question of time."

Bringing a fluorspar plant online and producing 97% CaF2 content consistently is a complicated task and is often subject to delays.

For example, Canada Fluorspar’s plant in Saint Lawrence, Newfoundland, was originally scheduled to come online around September 2017 but the company made its first shipment of fluorspar only in August 2018.

Market observers saw Sepfluor’s targeted start date as bullish, given that construction on the site started in June 2017.

Several major consumers in Europe have yet to qualify Sepfluor’s material and have yet to receive a date on, or by when, they can expect a first shipment, they told Fastmarkets IM.

Sepfluor is offering fluorspar for the third and fourth quarters of this year, according to messages it sent to a consumer and which were seen by Fastmarkets IM. Still, this is not out of the ordinary - the company said that operations in the first half of the year would consist of trial shipments to major fluorspar consumers.

The company signed supply contracts for 40% of its output over the next three years before the start of production. It will first need to satisfy those contracts before negotiating more sales.

Sepfluor might have signed contracts for 70,000-100,000 tonnes of fluorspar this year, one consumer estimated.

The market is currently tight because of the environmental controls that the Chinese government has ordered on domestic industries.

The tightness has caused increases in the price of acidspar out of South Africa. Fastmarkets assessed the price of acidspar, 97% CaF2, wet filtercake, fob Durban, South Africa, at $450-490 per tonne on January 31. This was up from $300-350 per tonne in the first week of January last year.

Sepfluor declined to comment at the time of publication.