The largest fluorspar deposits in South Africa are located in the Bushveld Complex, although there are also deposits in the Malmani subgroup of the Transvaal Super Group, notes law firm Eversheds Sutherland Mining and Infrastructure head Warren Beech.
Mining company Sepfluor, through the Nokeng fluorspar mine project, which has been commissioned and is preparing for commercial production, will be the primary extractor in South Africa.
“Sepfluor intends on building a second mine and an acid manufacturing facility. Reportedly, most of Sepfluor’s product has been sold ahead for a 12-month period,” says Beech.
He adds that South Africa could be a significant player in the production of fluorspar and notes that as demand grows, the country is ideally placed to ramp up production and beneficiate fluorspar, in line with its fluorochemical expansion initiative.
The development of the Nokeng mine, the potential for more mines and the prospects of beneficiation position South Africa ideally to meet global demands, particularly from North America and China.
Chinese fluorspar production has been positively impacted on by more stringent environmental restrictions by the Chinese government, but this has resulted in a reduction of fluorspar production in China, which means that China has to turn to imports. These restrictions were prompted by global initiatives.
Beech explains that the two international treaties that paved the way for more stringent environmental considerations and requirements are the Montreal Protocol and the Kyoto Protocol.
The Montreal Protocol is aimed at eliminating the production and consumption of ozone-depleting chemicals such as chlorofluorocarbons halons, carbon tetrachloride and methyl chloroform.
During the early 1990s, these substances were replaced with fluorinated greenhouse gases consisting of hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur texafluoride.
“Greenhouse gases and a number of the HFCs have the potential to impact on global warming, which is topical at present with the ‘environmental revolution’, and there is likely to be more focus on these aspects in the near future,” he says.
The Kyoto Protocol is an international treaty of the United Nations Framework Convention on climate change.
It is aimed at stabilising the concentration of four primary greenhouse gases – carbon dioxide, methane, nitrous oxide and sulphur hexafluoride – and HFCs and PFCs.
Beech highlights that there is a push to phase out HFCs because of their potential to contribute to global warming, and many industrialised countries are enforcing more stringent climate change legislation, including South Africa.
“Many of the replacement compounds use more fluorine, which has driven demand of fluorspar.
He notes that, as the fluorine-based replacement compounds outstrip HFCs, owing to the societal shift towards more environment-friendly products, the demand for fluorspar will continue to increase.
Additionally, while “there is very little recyclability or waste options in relation to fluorspar production,” Beech notes that South Africa’s stringent environmental laws, including stipulations on water use, waste management and air emissions, ensure that damage to the environment is mitigated and addressed.
“The ‘polluter pays’ principle is enshrined in South Africa’s environmental legislation,” he adds.
Beech explains that fluorspar is currently mined, exported and then beneficiated outside of South Africa, with the finished products imported at a great cost.
“The South African government has, through recent initiatives, including amendments to the mining and environmental laws, focused strongly on beneficiation and is encouraging local beneficiation.”
Sepfluor’s announcement that it intends on constructing a beneficiation plant is “good news for South Africa because it means that beneficiation capacity is being created in-country”, Beech adds.
Further, the beneficiated product can be exported at far better prices than the raw material, which will be beneficial to the country in terms of export revenue.
He cites interest shown by countries, such as China, which intends to secure fluorspar supply and source beneficiated products from South Africa.
Beech says the Department of Mineral Resources and Energy published a report regarding the status of the fluorspar industry in South Africa in 2009.
The report identifies products, such as acid-, metallurgical- and ceramic-grade fluorspar, as well as other principal applications. It concluded that global production of fluorspar had grown substantially, driven by demand from the fluorochemical and aluminium industries.
The report acknowledges that because fluorspar is not traded on commodity exchanges, as there are no day-to-day price indices, the price is primarily driven by demand.
It states that Mexican and South African prices, both of which move in tandem with Chinese prices, had grown substantially since the 1980s.
Given the demand-driven nature of fluorspar, both acid- and metallurgical-grade, demand fell as a result of the 2009 global economic crisis.
Currently, demand is driven substantially by the United States, which is a net importer, and China, which has migrated from being an exporter to being an importer.
China, South Africa and Mexico are the leading producers, while China and Europe are the largest global consumers.
Beech notes that the Eversheds Sutherland’s mining and natural resources team has been extensively involved in the South African developments of the fluorspar industry.