Construction begins at Ares’ US acidspar plant; fluorspar deemed critical by govt

Mining company Ares Strategic Mining (ARES) announced on Thursday February 1 that fabrication of its fluorspar acidspar manufacturing facility in the US state of Utah has begun

Once completed, the plant will be the first of its kind in the US and help to supply the country with acidspar, which represents two-thirds of the US fluorspar market, ARES said in a press release.

The US government classifies fluorspar as a critical mineral, “deemed critical to US national security and the economy.”

Currently, fluorspar is 100% imported into the US, with acidspar imports totaling 340,000 tonnes in 2023, according to US Geological Survey data.

ARES has a production goal of 100,000 tonnes per year of acidspar once manufacturing is under way. Initial production is estimated at 3,000 tonnes of acidspar per month, according to a company presentation.

The new plant will use fluorspar mined from ARES’ Lost Sheep Fluorspar Project, which spans 5,982 acres and is located nearby. Commercial mining is yet to begin, but there are plans to ramp it up once the manufacturing facility is up and running.

ARES closed a $10.5 million financing package back in December and has used funds to complete the full payment to the plant manufacturer to begin fabrication. The site for the plant was purchased in 2022.

“The full payment of the plant has commenced the fabrication of the larger facility, which the manufacturer has arranged to expedite,” James Walker, president and chief executive officer of ARES, said in a press release.

“We anticipate a very active and productive 2024 for our company; we have the resources to build an expanded operation able to cater to a large and expectant market,” the CEO added.

Fastmarkets’ price assessment for fluorspar, acidspar, 97% CaF2, wet filtercake, cif Rotterdam was $620-720 per tonne on January 25, up month on month from $600-700 per tonne.

A developing demand source for fluorspar is the electric vehicle market. Fluorspar acidspar forms the base material for polyvinylidene fluoride fluid within lithium-ion batteries.

This demand source is expected to ramp up in tandem with the construction of planned electric vehicle battery plants.

These plants are expected to increase North America’s battery manufacturing capacity from 55 gigawatt-hours per year (GWh/year) in 2021 to nearly 1,000 GWh/year by 2030, according to a US Department of Energy (DoE) report published in 2023.

The share of fluorine demand for energy applications will increase from 5% of the total demand in 2025 to 22% in 2035, the DoE forecast in its 2023 Critical Materials Assessment. This increase, it says, will be exclusively driven by fluorine’s use in lithium-ion batteries.

Fluorine demand in 2025 will exceed current production capacity by 1-4%, the DoE forecast in the assessment. By 2035, demand is projected to exceed current production capacity by 40-70%.

Most of the announced battery plant projects are scheduled to begin production between 2025 and 2030.

Currently, US battery manufacturers are unable to produce batteries without having to import fluorspar due to limited domestic production – ARES plans to be a domestic supplier for this supply chain.

A key piece of US legislature – signed into law in 2022 – is aimed at setting up a US supply chain for electric vehicles, with guidelines for vehicle manufacturers that allow consumers to obtain a $7,500 tax credit on vehicle purchases.

The guidelines for 2024 require 50% of critical minerals used in manufacturing to be sourced from either North America or a US free trade partner; the requirement will be 60% in 2025.

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