---Adds comments from CEO Mark Bolton---
Flurospar - a form of calcium fluoride - is used in the production of aluminium.
It is among a number of industrial commodities that are suffering amid ‘de-leveraging’ in key growth markets, particularly in China – where surpluses have now grown due to softer demand.
The company told investors that the prevailing price of acid grade fluorspar has now fallen below the Witkop mine’s current operating costs.
As a result, Fluormin decided to mothball the plant even though recent actions have reduced the mine’s costs by 40%.
Speaking with Proactive Investors, chief executive Mark Bolton explained that declining fluorspar prices have outpaced the firm’s operational gains and unfortunately the workers that ‘delivered the hard yards’ for the company have been affected most.
“This is not a great day for Fluormin and it is not a great day for our employees.
“Today around 220 jobs are directly at risk, and the needs of those employee are important to us. In that regard in is not a happy day.
“Though in regards to Fluormin as an investment, from the point of view of investors, we are still in a very strong position and in making the decision we have today we are preserving that position.
“We are a dynamic management team and this is merely a setback before we re-position ourselves and leverage our strong balance sheet, from a growth point of view.”
Bolton says that a possible project to access higher grades could potentially help lower the mine’s costs, meaning there is a possibility that a commercially viable operation is possible when the mine re-starts.
Such a restart will be considered once the fluorspar industry enters a more favourable price environment, he said.
In a statement this morning, Fluormin said it will focus its activities on expanding its mineral resources and mine planning for higher grade deposits, particularly the Valley deposit.