MethodologyContact usLogin
Fluorspar and lithium carbonate are the two major components of lithium hexafluorophosphate (LiPF6), which is the most widely used electrolyte for lithium batteries.
The fluorspar mining and flotation project in Kashgar, Xinjiang, which is expected to produce fluorspar in 2025, has started construction in March, after China’s Huayou Mining obtained the working permit, according to an official announcement.
The site has an estimated reserve of 50 million tonnes of fluorspar raw ore and will have a capacity of 1.2 million tonnes per year (tpy) of ore mining and 4,000 tonnes per day (tpd) of flotation, the announcement said.
“If the Xinjiang fluorspar project realizes full production capacity, it will greatly alleviate China’s domestic demand,” a producer based in Inner Mongolia told Fastmarkets.
A second producer said that, in addition to the project in Xinjiang, China Kings Resources Group’s investments in Mongolia’s fluorspar mines will also boost supply in the Chinese market.
China’s largest fluorspar producer began expanding its overseas footprint for the first time in January, after investing 134 million yuan ($18.4 million) in Mongolia’s MINGLIDA for a 67% interest in assets, including fluorspar mining rights in Mongolia’s southeast Dornogovi province, the company said.
China Kings Resources Group said it expects the project to reach an output of 200,000-300,000 tpy of metspar (fluorspar raw ore) and acidspar within two years.
The company also announced on December 11 that it will invest 173 million yuan in setting up a subsidiary in Mongolia under the name Lacwest FILLC.
The Mongolian subsidiary will have a fluorspar flotation capacity of 1,500 tpd. Construction is expected to be completed in two years, according to the statement by China Kings Resources.
“Both the supply of acidspar and metspar will increase in 2025, but we don’t think that demand will be fully alleviated, especially that for higher-grade metspar,” the Inner Mongolia-based producer said told Fastmarkets.
China’s Ministry of Finance cut import taxes on fluorspar in January 2024 to encourage imports as domestic supply tightness persisted, sources told Fastmarkets.
Mongolia has remained the largest fluorspar exporter to China in recent years, according to Chinese customs data.
But, starting in 2024, more Chinese traders have been investing in African mines, and imports of metspar from African countries surged, sources told Fastmarkets.
China imported a total of 1,023,578 tonnes of metspar in January-October, up by 33.9% from 763,652 tonnes in the same period of 2023.
Imports from African countries – including Mozambique, Namibia, Nigeria, South Africa and Zambia – reached 64,778 tonnes, surging by 127.5% year on year from 28,471 tonnes and by 100.7% from 32,271 tonnes in the same period in 2022, China’s customs data showed.
“The content level of sulfur, phosphorus, lead and arsenic in fluorspar ores from Zambia and Namibia are very similar to those in China,” a Chinese producer said, noting that large-scale fluorspar mining in Africa is still a growing industry and that production is expected to rise in the future.
A Chinese battery materials producer told Fastmarkets, “Chinese traders have been exploring mines in Africa and investing in raw ore production. But so far, we’re seeing very few investments in flotation in Africa due to construction difficulties and potential financial risks.”
“Due to the foreseeable supply increase, prices of fluorspar in China might halt the upward trend we’ve seen in these two years. But it’s also unlikely for prices to fall significantly due to demand from the battery, refrigeration and refractory materials sectors,” a Chinese producer said.
Fluorspar is the key ingredient of LiPF6, which is the most widely used electrolyte for lithium batteries. China currently holds 85-90% of market share in LiPF6 production, sources told Fastmarkets.
“We expect demand for fluorspar to increase by about 25-30% in the coming year due to the strong growth in energy-storage batteries,” a major Chinese battery materials producer told Fastmarkets.
The growth in Chinese shipments of ESS batteries is far outstripping the growth in deliveries of batteries for electric vehicles (EVs), sources told Fastmarkets.
China’s lithium battery shipments totaled 786 gigawatt-hours (GWh) in the first three quarters of 2024, up from 605 GWh in the same period in 2023, according to the latest data from Shenzen-based research institute GGII.
The capacity of shipped ESS batteries amounted to 216 GWh in the first three quarters of the year, up by 70% compared with the 127 GWh shipped in the same period in 2023. In comparison, shipments of EV power batteries totaled 533 GWh in January-September, up by 20% year on year from 445 GWh.
Battery producers in China have been expanding the capacity of ESS batteries to offset the slowing EV growth rate amid falling costs to produce lithium batteries, sources told Fastmarkets.
“We are seeing much higher production of energy storage batteries in China this year, and we expect the future growth rate in the energy storage market to remain fast-paced,” a Chinese cathode producer said.
China’s major battery producers have also been steadily increasing their overseas market share amid growing demand, partly due to intense competition within China, Fastmarkets heard.
“In addition to major regions such as China, Europe and North America, the energy storage market in emerging [markets], such as the Middle East and Africa, is also quite active,” EVE chief executive Liu Jincheng said at a battery conference this year.
Global demand for ESS batteries will reach around 365 GWh in 2025, while total demand for lithium batteries will reach about 1,690 GWh, an industry analyst told Fastmarkets.
Want to find out more about our price data, forecasts and market insights related to the ESS market? Visit our dedicated energy storage systems market page here.