INDUSTRIAL METALS / MINERALS

New SA Fluorspar prospect plans listing

SepFluor, a spin off from Sephaku Holdings is hoping to list by March next year to raise funds to progress its R2bn fluorsparmine, concentrator and beneficiation hub.

Author: Christy Filen
Posted: Thursday , 24 May 2012

JOHANNESBURG (Mineweb) - 

SepFluor Limited, a spin off from listed company Sephaku Holdings, is looking to raise financing and list by March 2013 in order to progress its R2bn plans for a fluorspar mine, concentrator and chemical beneficiation hub.

Expected to create 400 new jobs directly and approximately 2000 indirectly, CEO, Alan Smith, is confident of the success of the project based on Fluorspar's strategic and critical mineral status in the United States and European Union respectively.

The tie in with the South African government's beneficiation drive and the intent to develop nuclear power stations were also contributing factors said Smith.

A downstream product created from fluorspar, hydrogen fluoride (HF), is used in many industries of which the production of refrigerants is the most well-known. Other applications are the production of steel, the production of aluminium fluoride (critical to the smelting of aluminium), to create the nuclear power fuel, uranium fluoride and lithium batteries.

The fluorspar presents as a purple shaded rock on top of the Plattekop deposit.

Much like platinum and manganese, Fluorspar is abundant in South Africa. Approximately 18% or 41mt of the world's reserves are found in South Africa which tops the list of countries with the most reserves worldwide. Mexico (32mt) and China (21mt) are 2^nd and 3^rd respectively said Smith in a presentation to media during a site visit yesterday.

Project Manager, Loek van den Heever and CEO, Alan Smith explaining the intricacies of fluorspar

Despite the concentration of the commodity in the country, production of 280 000 tons in 2011 was negligible when compared to the 5.5mtpa supplied globally of which the majority comes out of China and Mexico said Smith.

Global supply and demand  appears to be very much in balance according to graphs supplied by the company but Smith believes that the information is misrepresentative due to the different grades of fluorspar included in the numbers, particularly from China, which, when amalgamated, causes distortions in the picture.

There are three different industrial grades of fluorspar explained Smith. Acid-grade contains more than 97% calcium fluoride, ceramic grade contains between 93% and 97% calcium fluoride and metallurgical grade contains between 60% and 93% of calcium fluoride. SepFluor's production, planned for second quarter 2014, is acid-grade said the CEO.

The company is focused on developing its Nokeng mine, 80km north of Pretoria, in order to supply a fluoro-chemical beneficiation hub planned for construction 50km from the mine at an industrial site within Ekandustria near Bronkhorstspruit. The company obtained its mining licence in 2010.

The mine is expected to cost R920m to develop and the beneficiation hub R1.2bn. A 60% debt and 40% equity funding structure is envisaged.

Smith acknowledged that the current team's expertise lies in the mining side of the planned venture and that it will be looking for technical partners for the chemical beneficiation side of the business.

A synchronised approach to the construction of the mine and beneficiation facilities will have to be managed said Smith as it would be difficult to get the product to port otherwise.

Most of the value lies downstream said Smith with fluorspar attracting a price of 45 US cents per kilogram compared to US$2 per kilogram for hydrogen fluoride.

The privately held company with over 800 shareholders has a broad based historically disadvantaged (HDSA) shareholder base said Smith with over 40% classified as HDSA shareholders and approximately 30% black shareholders.

A stake of 10% is held by an overseas company and there are also ministers in government that have holdings said Smith. Chairman, Dr Lelau Mohuba, holds a significant stake.

Non-executive directors of SepFluor, Rudolph de Bruin and David Twist were founder members of Platmin and CFO, Neil Crafford-Lazarus was formerly the CFO of Platmin.

Initial production from Nokeng's high grade (42%) Plattekop deposit is expected to be 185 000tpa which will reduce to 130 000tpa from the Outwash Fan deposit due to a drop in grade to 24.6%. Life of mine is 19 years for the two deposits. A third deposit next to Plattekop, called Wilton, is currently being explored.

View from Sepfluor's Plattekop deposit that overlooks neighbouring fluorspar mine, Vergenoeg.

Plattekop is an offshoot from the producing mine next door, Vergenoeg, previously owned by Metorex and now owned by Spanish company Minersa said project manager, Loek van den Heever.

The company also has other fluorspar deposits but these will be housed in a separate entity.

 

Disclosure: SepFluor took a contingent of journalists, including this journalist, to their deposit and the potential site for the chemical beneficiation hub at the industrial park near bronkhorstspruit yesterday

Pictures: Christy Filen