Hot Fluorite Mines Will Move Toward "Aristocrats" in the Future

We believe that fluorite ore will become a hot spot in the future. Fluorite ore will move toward “nobility” in the future. The reason is that the ratio of fluorite storage and production, which is currently the most important source of fluorine, is declining, and fluorite resources in the main fluorspar consumption countries and regions are depleted. China's export of fluorite has been tightened and fluorite prices have gradually increased.

Fluorite mines are concentrated and concentrated in the global scope. According to the statistics of the US Geological Survey, the global distribution of fluorite resources is relatively concentrated. As of 2009, the world’s fluorite reserves totaled 470 million tons, and the recoverable reserves were 230 million tons, among which the fluorite reserves in South Africa, Mexico, China, and Mongolia rank in the top four in the world, and the 4 countries can extract 45% of the world’s total. About fluorite resources such as the United States and Western Europe, which are the main fluorite consumers, have already dried up.

China's fluorite base reserves account for 23.4% of the world's basic reserves. Among them, the basic reserves in Hunan, Inner Mongolia and Zhejiang accounted for 38.90%, 16.70% and 16.10% of the total domestic volume, and only 27.80% in other provinces. Although China's fluorite resources are rich in reserves, the recoverable reserves are only about 21 million tons, and the proportion in the world is less than 10%.

One of the "aristocratic" fluorspars: the global reserve-production ratio is only 38. China's storage and production ratio is 60%. According to current fluorite recoverable reserves and 2008 production, the global fluorite storage/production ratio is only 38, and China's storage/production ratio has dropped to 6. The decline in the ratio of fluorite deposits and reserves indicates that fluorite will be "refined" in the future.

Second, fluorite “nobility”: China’s export prices for limiting fluorite all the way up as the main exporter of fluorspar, China has taken measures to protect domestic fluorite resources, such as the implementation of a quota system for fluorspar exports and tax rebates from exports. Until the collection of high tariffs, the total amount of quarry mining, in principle, the new fluorite mine exploration and mining registration applications will no longer be accepted.

Against this backdrop, China's fluorite export prices have been on the rise. In 2001, the average export price of fluorspar in China was around US$100/ton, and in 2010 it had risen to US$250/ton. In terms of domestic production, in the second half of 2010, manufacturers’ fluorspar prices were in the range of RMB 1500-1700/ton.

Forced choices: Finding new sources of fluorine, strategically integrating fluorite ore, and developing advanced fluorine-containing fine chemicals We believe that the extraction of fluorine from apatite is one of the ways to acquire fluorine resources in the future; the national strategy to integrate fluorite mines It can protect the gradually reduced fluorite resources; the development of advanced fluorine-containing fine chemicals will be the inevitable solution for domestic fluorine chemicals.