Home » Posts tagged 'Hastie Mining'
Tag Archives: Hastie Mining
Make acid grade again: The potential for a resurgence in US fluorspar production – by Michael Greenfield, Industrial Minerals
By MICHAEL GREENFIELD
Published: Thursday, 08 February 2018
President Trump is set on ensuring US demand for fluorspar is served by domestic production, but with annual demand at 400,000 tonnes and effectively zero production, Industrial Minerals delves into the scope for meaningful fluorspar production in the US.
President Trump’s executive order on December 20, 2017, was administered on the basis of identifying and securing industrial minerals that are deemed critical to the United States’ economy. Yet production of fluorspar, which made the list, has been minimal since 1995, when 51,000 tonnes was produced.
The US natural fluorspar production market has been more or less dormant for over two decades despite a relative abundance of 4 million tonnes of proven reserves.
Historically, mining fluorspar in the US has been expensive, and was the dominant reason for mines closing down. But environmental clampdowns on polluting production in China has increased production costs in the Asian country and narrowed the cost gap between the US and China.
Hastie Mining, based in Illinois, US, produces 10,000 tonnes per year of fluorspar, most of which is metal-grade spar, 90% CaF2 purity or lower and used for production of metals. Meanwhile, the US imports around 82.5% of its fluorspar for manufacturing hydrofluoric acid, which requires 97% CaF2 fluorspar.
Bar Hastie’s production, the US imports all of its near-400,000 tpy of consumption. This comes primarily from four markets; Mexico, Vietnam, South Africa and Spain, although small amounts are sourced from Mongolia, China, Russia and the United Kingdom, according to 2016 data from the United States Geological Survey (USGS).
Around 320,000 tonnes of the total imports are acid grade, and almost all of which is accounted for by end-users Chemours and Honeywell.
Globally, 88% of demand for fluorspar comes from three sectors; steelmaking, aluminium smelting and the production of hydrofluoric acid.
Some 40% of fluorspar is required for manufacturing hydrofluoric acid, of this 60% is required for flurochemicals.
The US currently produces around 85 million tonnes of steel and 6 million tonnes of aluminium. The steel market is growing, and aluminium could soon receive a boost from incoming protectionist policies on Chinese products, according to Metal Bulletin Research.
The increasing cost of imported fluorspar
With strong and growing demand and US capacity at a minimum, it seems as though making the fluorspar supply chain secure is mission impossible.
Certainly there is the demand, although the time taken between commissioning projects, breaking ground, correcting issues in the production line, assuring quality and then delivering capacity means the effect of planned additional supply will not be felt in the short term.
There is also the issue of President Trump’s stance on Nafta, an agreement he dubbed “one of the worst in history” due to the trade deficit it created with the signatories. Ending Nafta is likely to be adverse for Mexican producers, who exported 267,000 tonnes of fluorspar to the US in 2016, according to the USGS.
Mexico has a $63 billion annual trade surplus with the US whereas Canada’s trade surplus comes to $12.5 billion, according to the Office of the United States Trade Representative, and on that basis it is unclear whether this would affect Canada Fluorspar’s anticipated 200,000 tpy capacity, which is due to hit the market in the coming months.
With the market extremely tight, Canada Fluorspar’s output will provide some reassurance to the two US majors, who have received some of the first sales from the Canadian start-up, Industrial Minerals understands.
“If I had an additional 100,000 tonnes, I would have no problem selling it, judging from the serious inquiries I have had,” one producer outside of the US told Industrial Minerals.
The market tightness is reflected in high fluorspar prices. Industrial Minerals assessed acidspar 97% CaF2, wet filtercake prices, fob China at $480-520 per tonne on February 8, which one India-based consumer described as “the highest I have ever seen, in my 15-year career.”
Industrial Minerals understands that Chinese consumers have looked to buy material from Mongolia recently, although with limited success.
The cost of Chinese material went up on January 18 to $480-520 per tonne from $400-420 previously for acidspar 97% CaF2, wet filtercake, fob China, on a plethora of issues which can be partially linked to the rising cost of production due to the environmental controls now in place.
The high prices in China reinforce arguments in the market that fluorspar supply should be secured.
US consumers still have access to reasonably-price Mexican fluorspar, which is home to the world’s largest producer, Mexichem. The price for acidspar, 97% CaF2, dry filtercake, <5ppm,fob, Tampico, Mexico has been flat at $280-310 per tonne for several months, but if the market trend of China exporting very little continues or it becomes a net importer, that could place a higher demand on Mexican material and push the price up.
Should the cost of imported fluorspar continue to rise, the price differential between imported and domestic fluorspar could narrow further and make US production an attractive prospect once again.
Domestically, the scope to expand fluorspar production and secure the supply chain is small. The Hastie Mining operation is primarily a limestone quarry with some deposits of fluorspar which run like veins through the rock.
The company imports around 100,000 tpy of fluorspar, while locally-produced material costs around 20% higher than imports, according to Don Hastie, partner at Hastie Mining.
But Hastie Mining has been developing a deposit in Kentucky for the past three years. It will have capacity to produce 20,000 tpy of fluorspar when it comes online in the second half of 2018. The Illinois quarry operation will then cease production because of the lower head grade quality – 40% as opposed to 55%.
The Kentucky mine is financially more viable as it is solely a fluorspar operation, meaning the costs are dramatically reduced to process fluorspar for sale and there is a “different thickness of ore material,” according to Hastie.
There were no difficulties in processing the fluorspar from the limestone quarry though, Hastie added.
Nevada and California in the US also have fluorspar deposits, although no operations exist in California while UK-based Tertiary Mining #TYM is developing a mine in Nevada where the company has 2,500 acres under license.
There is 86 million tonnes of ore in this deposit, at 10% head grade, although it is believed that there are higher grades further down.
The company expects it will be able to produce in excess of 100,000 tpy of fluorspar when operational within the next five years, although this is subject to production costs, market status and offtake agreements.
This equates to around 25% of current US demand, and a few percentage points lower than that once the supply reaches the market accounting for growth in demand. That said, the company plans to export its material, it said, and has evaluated the potential for exporting to Asia from San Francisco, California.
Tertiary has signed an offtake agreement with Germany-based mineral trader Possehl Erzkontor. Under this, Possehl will take a minimum of 70% of acidspar production from Tertiary’s three sites which also include Sweden and Norway. Possehl also provided pre-financing to Tertiary.
In a recent statement made to the London Stock Exchange, the company said it is progressing the scoping study, having completed flotation test work. Still outstanding is project feasibility, de-risking and development phases, and assessments of costs, further offtake agreements, market situation for when the project goes live and economies of scale, Industrial Minerals understands.
Yet with domestic production coming at a premium, and the world’s biggest fluorspar producer just across the southern border in Mexico having escaped the price spikes seen in China and South Africa, some market participants question whether the US needs domestic production.
And it begs the question why fluorspar has been placed in the critical minerals category by the Trump administration when its security seems unobtainable. It could be related to President Trump’s promise to secure US jobs and US business, with Chemours and Honeywell both sitting within 2017’s Fortune 500 list.
Additional supply will go some way to soften the reliance on foreign imports, but until any significant amount of acid grade production hits the US market, importers will endure a large exposure to global market conditions, and prices.
Link here to view the article on IndMin website
- Poolbeg Pharma #POLB – Growing a Capital Light Company. CEO Jeremy Skillington talks to Alan Green
- Pharma Times – Poolbeg Pharma dives into nasally administered antivirals
- #BRES Blencowe Resources – Consolidated Africa Holding & Joint Broker
- #MSMN Mosman Oil and Gas – Falcon Update
- #KAV Kavango Resources – KSZ drill operations recommence