Fluoride Workers Compulsory Resource Integration

Authoritative sources revealed on September 8 that as one of the new chemical materials, the fluorinated workers will list a single special plan in the “Twelfth Five-Year Plan”. The plan intends to implement mandatory resource integration and achieve a substantial reduction in exports of fluorspar and hydrofluoric acid by more than half.

The main component of fluorite is ***, which is an "absolute and non-renewable" resource. China's fluorite reserves are 1/2 of the world's, and proved recoverable reserves are only 1/10, while output is as high as 1/2. Due to the scarcity of resources, the country has adopted a fluorite export quota system since 1999, but fluorite is still being exported in large quantities. From 1999 to 2009, China exported a total of 9.16 million tons of fluorspar. During the period, it exported 780,000 tons of hydrofluoric acid, equivalent to 1.79 million tons of exported fluorspar. The direct and disguised exports of fluorite totaled 10.95 million tons, accounting for approximately 8.4% of the proven reserves of China’s major fluorite resource provinces. To this end, the 12th Five-Year Plan for Fluorine Chemicals put forward the goal of optimizing the export structure.

In addition to restricting exports, the policy also stipulates the integration of fluorite resources and the strengthening of control over resources. The basic idea is to control resources from the state, and it is the large state-owned enterprises that are the main players in the integration. The companies in the fluorine chemical industry with state-owned assets include China Chemical Industry, Sinochem, Juhua (600160) and San Aifu (600636), among which Juhua (600160) and San Aifu (600636) are listed companies. Authoritative sources said that the situation in the fluorite industry is similar to that of rare earths, and the introduction of policies will closely follow rare earths, and the time is expected to be in the first half of 2011. As the fluorinated workers belong to the fourth category of monitoring chemicals in the Regulations of the People's Republic of China on Monitoring of Chemicals, after the adjustment of policies in the future, production will require a licensing system.

While controlling resources, the 12th Five-Year Plan for Fluorin Chemical Industry also proposes to better utilize its resource advantages, realize resource-for-technology, and promote China's upgrading from an industrial power to an industrial power. Domestic fluorine chemicals are mainly concentrated in primary products, but there is a large gap in high-end products, and technologies, devices, and production control are all lagging behind. The plan proposes that enterprises should focus on the development of electrolyte lithium hexafluorophosphate, a key raw material for fluorine-containing surfactants, fluorocarbons, and new fluorine-containing intermediates for new pharmaceutical and pesticide products to achieve industrial transformation and upgrading.