China Limits Fluorite Exports to Conserve Fluorite Resources   

By Luo Yamin, Research Institute of Industrial Economics of CNCIC

1. Supply of fluorite is increasingly tight

Now, the world's proven basic reserve and retained reserve of fluorite are about 470 million tons and 230 million tons, respectively, mainly distributed in China, Mongolia, Mexico, South Africa and Kenya. In 2010, the world's total production of fluorite was nearly 7 million tons. At the present exploitation rate, it is estimated that the world's retained reserve of fluorite will be available for only 33 years. China's retained reserve of fluorite is the third largest in the world, but its basic reserve of fluorite is 110 million tons - the largest in the world. In more than 20 provinces (autonomous regions) of the country, there are various sizes of fluorite deposits. But due to ore grades and mining costs, China's fluorite production is mainly concentrated in Hunan, Zhejiang, Inner Mongolia, Jiangxi, Yunnan and Fujian provinces (regions). Most fluorite producers are small. About 40 are capable of producing acid-grade fluorite powder.
   In recent years, China's consumption structure of fluorite has generally remained stable, and metallurgical, chemical and building materials industries have used the majority of it. In the first years of the 21st century, the building materials industry has annually consumed more than 30% of all the fluorite produced in China. But more recently, with the rapid development of the fluorine chemical industry, the building materials industry's share has gradually decreased. In 2010, China produced about 4.8 million tons of fluorite (1:2 ratio of lump ore and powder ore ), up 25% year on year; and consumed 4.3 million tons, up 17%, of which the fluorine chemical industry (including fluorinated salts) took nearly 50%, the metallurgical industry about 35%, and the building materials industry about 15%. At the exploration rate of 2010, China's retained reserve of fluorite can only last till 2017. Although China's basic reserve of fluorite could still be available till 2032, that time estimate may be shorter if the low recovery rate of fluorite ore is taken into account.
   Due to the rapid depletion of domestic fluorite resources, the Chinese government has paid increasing attention to protecting fluorite resources. In February 2010, the Chinese Ministry of Industry and Information Technology (MIIT) and seven other departments jointly issued the "Access Standard for Fluorite Industry," which clearly stipulates the scale and recovery rate of fluorite mining. On April 20, the Chinese Ministry of Land and Resources released "Notification on the 2010 Mining Quotas for High-Alumina Clay and Fluorite," stipulating that the national total mining quota for fluorite ore was 11 million tons in 2010. This was the first time that the Chinese government clearly prescribed a national total annual mining quota for fluorite. On May 19, MIIT issued "Production Quotas of High Alumina Refractory Clay and Fluorite for Every Province (Autonomous Region and Municipality) in 2010," stating that the 2010 national production quotas for fluorite lump and fluorite powder were 4.71 million tons and 2.44 million tons, respectively. But because the quota was insufficient for fluorite powder demand but exceeded demand for fluorite lump, the actual output of fluorite powder (including fluorite powder for chemical uses) exceeded the quota while the output of fluorite lump was less than the quota. In June 2010, the State Administration of Taxation raised the fluorite resource tax from RMB3 /t to RMB20 /t, again showing the Chinese government's determination to protect fluorite resources. In addition, China has reduced the 2011 national total fluorite mining quota by 500 000 tons. Compared to 2010, the quotas for Jiangxi, Fujian, Hunan and Inner Mongolia provinces and regions in 2011 have been increased by 290 000 tons, 200 000 tons, 120 000 tons and 100 000 tons, respectively, but the quotas for Anhui and Zhejiang provinces were decreased by 530 000 tons and 400 000 tons, respectively.
   Apart from obtaining the element fluorine from fluorite, the fluorine chemical industry can also obtain the element fluorine from non-fluorite resources, such as silicon fluoride that exists in the exhaust of wet-process phosphoric acid (WPA). But so far, China's industrial capacity of producing HF from silicon fluoride is only 20 000 t/a. Thus, China needs to promote this technology as soon as possible.

2. Fluorite exports gradually reduced

Before 2003, China's annual export of fluorite was always over 1 million tons, but it has since decreased (see Table 1). Due to the financial crisis, demand for fluorite declined internationally. China's export of fluorite dropped in 2009 to the lowest in memory, only 269 000 tons. In 2010, China exported 600 000 tons of fluorite and imported 56 000 tons. Fifty four percent of the imported fluorite with a content of 97% or below, and 99% of the imported fluorite with a content of above 97%, were from Mongolia, while the proportion of exported fluorite with a content of 97% or below climbed from 10% in 2004 to 36% in 2010. In 2010, exported fluorite with a content of 97% or below went mainly to South Korea, China’s Taiwan region, India and Japan; and exported fluorite with a content of above 97% went mainly to the United States, India, Japan and the Netherlands. China exports about 13% of its fluorite production. But it is estimated that about 1/3 of the country's fluorite production is finally exported to foreign countries when the export of various downstream fluorine products is taken into account.
Table 1 China's fluorite exports from 2000 to 2010   (thousand tons)
Year    2000    2001    2002    2003    2004    2005    2006    2007    2008    2009    2010
Fluorite with a content of 97% or below    308    208    200    115    93    70    59    53    83    73    212
Fluorite with a content of above 97%    890    901    807    837    741    658    584    483    574    196    386
Total    1198    1109    1007    952    834    728    643    536    657    269    598

   China's fluorite exports account for 40%-50% of the world's fluorite trade and thus play a decisive role in the global fluorite market. Because China's high-quality fluorite is still irreplaceable in the international trade to some extent, it is expected that the country's fluorite exports will maintain the current level in the next few years. Nevertheless, the European Union and other developed countries still have difficulties getting enough high-quality fluorite and will ask China to reduce its fluorite export tax.

3. Fluorite prices keep rising

Take the ex-factory price of first-class acid-grade fluorite powder for example. It was RMB900-1 300 /t in 2007, on average. It fluctuated violently in 2008. In 2009, due to the market downturn,