Artificial intelligence and electrification are rewriting the rules for miners.
Investors who caught the early lithium boom - or the more recent uranium renaissance - know how quickly an overlooked mineral can turn into a market darling. Now, another mineral is beginning to flash similar signals: fluorite, and in particular its highest-grade form, acidspar.
If you’ve watched the ASX for any length of time, you’ve seen this cycle play out.
Lithium was first. As electric cars took off, early movers like Pilbara Minerals (ASX: PLS) and Liontown Resources (ASX: LTR) went from speculative “stonks” to multibillion-dollar mining majors.
Then came uranium. As sentiment flipped on nuclear power, demand surged and Paladin Energy (ASX: PDN) became a global bellwether.
Today, investors scanning for the next supply-side story are increasingly turning their attention to a mineral you probably encounter dozens of times a day without realising it: fluorite.
The growing fluorite economy
Fluorite is the raw material used to produce hydrofluoric acid, a building block chemical that sits behind some of the world’s most important industries. The demand profile is being reshaped by three major megatrends:
1. Semiconductors and AI
Hydrofluoric acid is essential for etching silicon wafers, a step in manufacturing every microchip. Without fluorite-derived chemicals, the global AI boom simply cannot scale.
2. Air conditioning and global warming
Modern refrigerants are built on fluorine chemistry. As global warning raises temperatures around the world, and as hundreds of millions of people in India and Southeast Asia join the middle class, demand for air conditioners is climbing.
3. Batteries from electric cars
Fluorine compounds are vital inputs for lithium-ion electrolytes, particularly the fluoride salts used to improve performance and safety. Several emerging cathode and anode technologies also rely on fluorinated materials. While this segment is smaller today, it is one of the fastest-growing.
Within the broader market, acidspar - the high-purity grade required for chemical processing - is where demand growth is strongest. Its more niche than lithium but has a similarly favourable trajectory. Far fewer miners are positioned to supply it.
A market heading for shortage
The investment case centres on tightening supply. Benchmark Mineral Intelligence expects the global acidspar market to swing into deficit later this decade as:
- legacy mines mature, particularly in Mexico and South Africa
- grades decline, lifting production costs
- new project pipelines remain thin due to years of low prices
But the biggest shift is coming from China.
For decades, China was the world’s dominant exporter of acidspar. That dynamic has reversed. As China’s domestic electric cars, semiconductor, and refrigeration industries expand, the country has become the world’s largest importer. For resources investors, this pivot is familiar: when the world’s biggest producer becomes one of its biggest buyers, the global price floor tends to rise. We saw it in lithium. We saw it in rare earths. Fluorite may be next.
What to watch
For investors, fluorite offers a compelling “ground floor” opportunity. When assessing the sector, there are some signs to look for.
Purity is a big one. Here, it’s important to understand the difference between (premium) acidspar and (lower-grade) metspar. Projects capable of producing high-purity material command better margins and attract more partners.
Location is also key. Transport costs can make or break the economics. Deposits near ports or within easy reach of Asian chemical hubs enjoy a big advantage.
But the most important of all is probably partners. Offtake agreements or strategic partnerships, especially with big trading houses, industrial consumers or governments, are strongly positive signals. These relationships suggest meaningful technical due diligence and long-term demand visibility.
Another way to play the theme
Ultimately, the fluorite story is tied to the massive global appetite for AI hardware, electric cars, and other advanced electronics. Investors who prefer the demand side of this equation may choose to own the technology companies - like Nvidia or Apple - driving it rather than the miners supplying it.
One option is the ETFS US Technology ETF (ASX: WWWW), which provides exposure to the semiconductor and software leaders whose growth is underpinning the need for critical minerals like acidspar.
Disclaimer
ETF Shares Management Limited ABN 77 680 639 963, AFSL: 562766. Investing involves risk and returns are not guaranteed. Refer to the relevant PDS and TMD available at www.etfshares.com.au
