The Natural Resources Department of Anhui Province announced plans to revoke 45 exploration and mining licenses, including the fluorspar mining licenses of two companies, Jingde County Hongtai Fluorspar and Guangde County Hongda Mineral Resources.

These privately held companies, established in 2002 and 1996, respectively, have relatively small capacities of around 20ktpy of fluorspar.

The fluorspar market is expected to grow rapidly over the next decade. Project Blue estimates a 4.0% CAGR in demand from 2023 to 2034, split between acidspar and metspar. Focusing on the acidspar market, demand is forecast to grow at an even faster rate, 5.8%, with its use in hydrofluoric acid (HF) built into lithium-ion battery supply chains at several key points. Several fluorspar mining projects are in the pipeline and will need to ramp up without much delay to meet EV demand growth. 

China is a major source of fluorite, as well as the major importer of acidspar, as the country continues to build out a leading role in HF production. According to Project Blue data, China accounted for 72% of HF production in 2023, ramping up from 54% in less than a decade. With the growing demand for Li-ion batteries, China has upgraded domestic mines to produce increasing volumes of acidspar in the midst of consolidating old and small-scale mines since 2017. Imports of metspar (used primarily in steel) have leveraged low-cost material out of Mongolia to relieve pressure on domestic mines.

In 2023, the Chinese Ministry of Finance cut fluorspar tax rates to support its growing domestic industry. However, in response to frequent accidents at fluorite mines, the Mine Safety Administration in China announced a further nationwide environmental inspection in March 2024, set to continue into August this year. The inspection focuses on fluorspar mines, aiming to address illegal mining and construction activities in the fluorspar industry by shutting down, consolidating, and upgrading existing mines. As a result, there was a slowing supply of fluorspar from China, and prices have moved back up the US$500/t mark; according to Project Blue data, the industry cost curve can support prices well below US$500/t, but ongoing consolidation and suspensions of mines will add further urgency for new supply to enter the market (both within and outside China).