Tight Fluorite Resources    

By Liu Qiusheng and Peng Zhiwei, Zhejiang Juhua Company Limited

1. The world's major consumers of fluorite

Fluorite (fluorspar) is mainly composed of calcium fluoride and is mainly used in three industries - metallurgy, chemicals and building materials. Currently, the world's identified reserve of fluorite is about 448 million tons, while basic reserve is believed to be about 623 million tons. Mexico, South Africa, Mongolia, Russia, Spain, France and China are relatively rich in fluorite resources.
    The United States is the world's largest consumer of fluorite. Its annual imports and consumption of fluorite both lead the world. The second largest fluorite consumer is Western Europe. Japan is the third largest. Newly industrialized countries have the fastest growing demand for fluorite.
    In the United States, Western Europe and Japan, fluorite is mainly used in the production of hydrofluoric acid and is also used in the production of iron, steel and aluminum. As all countries around the world have paid attention to the chemical uses of fluorite, they all strictly control the establishment of new simple fluorite processing projects within their land but encourage their domestic companies to develop fluorine-containing downstream products such as high-purity hydrofluoric acid, fluorocarbon surfactants, dye dispersing agents and textile finishing agents, and are eager to construct the link between fluorine chemicals and the pharmaceuticals, pesticides, dyes and synthetic materials industries. This situation has thus increased the demand for acid-grade fluorite worldwide. Moreover, the growth in global steel production has also increased the consumption of fluorite, but because of advances in smelting technology, the unit consumption rate of fluorite in the production of steel has continued to decrease. Therefore, the consumption of fluorite in steel production will remain stable in the coming years.

2. Scramble to control fluorite resources

China's total reserve of fluorite is reported to be approximately l08 million tons, of which Hunan province occupies the largest share, accounting for 38.9% of the country's total, and following Inner Mongolia and Zhejiang province. China has large amounts of fluorite resources, but most of ores are lean and are difficult to mine and process. Due to the absence of effective mining technologies, the utilization rate of low-grade fluorite resources is very low in China.
   In recent years, the booming fluorine chemical industry at home and abroad has rapidly increased the demand for fluorite. In order to protect its fluorite resources, from 1999 till now, China has implemented a fluorite export quota licensing system. In 2007, China also imposed a 10% tariff on the exports of fluorite. In 2008, this tariff was raised to 15%. In 2010, it remains unchanged.
    Since September 1st, 2006, China has abolished the 13% export tax rebate of hydrofluoric acid. In January 2007, China imposed a 10% export tariff on hydrofluoric acid, and then raised it to 15% in January 2008, and again to 25% in January 2009. In response to the impact of the global financial crisis on exports, China reduced the export tariff of hydrofluoric acid to 15% on July 1st, 2009, and it remains unchanged.
   With a series of policy adjustments discouraging exports, China's fluorite export volume dropped from 1.2 million tons in 2000 to 658 000 tons in 2008. At the same time, the export volume of hydrofluoric acid made from fluorite rose from 17 200 tons in 2001 rapidly to 133 600 tons in 2008. Although the exports of fluorite have reduced, the significant increase in the exports of hydrofluoric acid in fact represents a big outflow of fluorite resources.
        China's export volume and prices of fluorite  
Year         Exports (thousand tons)       Average price (US$/t)
2001    1109     120.8
2002    1007    101.7
2003    952     116.9
2004    834     142.8
2005    728     176.3
2006    643     170.9
2007    535     189.7
2008    658     289.9
2009    269     250.0
Source: CNCIC

China's export volume and prices of hydrofluoric acid
Year    Exports (thousand tons)    Average price (US$/t)
2001    17.2    433
2002    28.0    407
2003    45.5    505
2004    68.8    553
2005    97.3    618
2006    124.1    617
2007    127.2    804
2008    133.6    1470
2009    108.1    893
Source: CNCIC   


3. Issues faced by China's fluorine chemical industry

Since the 1990s, China's fluorine chemical industry has developed rapidly. Its average annual growth reached 30% between 2006 and 2010. At present, China's outputs of hydrofluoric acid and Freon 22 both rank first in the world. In 2008, reportedly, China's production capacity, output and exports of hydrofluoric acid were 1.2 million t/a, 600 000 tons and 133 600 tons, respectively; its production capacity, output and exports of Freon 22 were 528 000 t/a, 430 000 tons and 160 000 tons, respectively; and its output and exports of fluorine polymer were more than 45 000 tons and 16 300 tons, respectively. But big is not the same as strong. The overall level of China's fluorine chemical industry lags far behind that of developed countries in the following aspects:
    (1) China-made fluorine chemical products include only a few varieties that are mostly primary products like hydrofluoric acid, Freon 22 or polytetrafluoroethylene (PTFE). Although some Chinese companies claim that they can produce dozens of fluorine polymer products like the leading companies worldwide, their product quality is much lower than that of foreign products.
    (2) Although China has abundant fluorite resources, its fluorite resources can be exploited in the current mode for only a few more decades. In recent years, large amounts of its fluorite resources have flown to other countries due to the exports of fluorite and hydrofluoric acid.
    (3) The uncontrolled exploitation of fluorite resources has caused serious environmental pollution and resource waste in the country. In China, there are a large number of small enterprises engaged in the exploitation of fluorite. In order to improve the employment rate, local governments encourage their local small companies to dig fluorite or cryolite to produce hydrogen fluoride and fluorine-containing products. However, due to their small scales and backward technologies and environmental protection concepts, these small enterprises have caused serious resource waste and environmental pollution.
    With the impact of the global financial crisis, the Chinese fluorine chemical industry has disclosed a lot of issues such as structural imbalance, decentralized development, disorderly competition