Case study : Ozark-Mahoning, sole surviving US fluorspar producer

Introduction Preparing a report on fluorspar economics in the US could have been somewhat complicated at one time. This was because the number of producers, both large and small, derived production from different locations through-out the western US and the southern Illinois and western Kentucky fluorspar districts. Companies, such as Allied Chemical and Williamson Mining, operated in the Jamestown district of Colorado. In Walden and Salida, CO, the Colorado Fluorspar Co. operated mines and mills. In New Mexico, both Du Pont and Allied had mines and mills. In the Illinois-Kentucky district, US Steel, Rosiclare Lead and Fluorspar, Minerva Oil Co., and Marathon Oil all produced spar for the US market. Now all of the companies are out of the fluorspar business and, with the closing of the Seaforth Mineral Co.'s Inverness Mining Co., only Ozark-Mahoning Co. survives as a domestic producer. History Ozark-Mahoning Co., as it now exists, was formed in 1946 by the merger of Ozark Chemical Co. and Mahoning Mining Co. Ozark Chemical Co. was started in the 1920s to produce sulfuric acid for two refineries located in Tulsa, OK. Mahoning Mining was originally formed by the founders of Ozark Chemical Co. and the Youngstown Sheet and Tube Co. to produce fluorspar and associated minerals from properties in the southern Illinois and western Kentucky fluorspar district. In 1937, Mahoning Mining started an exploration program, employing contractor-operated churn drills to look for reserves in Hardin and Pope Counties in southern Illinois. Based on known reserves in the area and the results of the exploration program, work was started in the fall of 1938 to build a selective flotation plant at Rosiclare, IL. The mill was completed and put into operation in August of 1939. The company's first mining efforts were in the Cave-In-Rock district just north of Cave-In-Rock, IL. The deposits in this area were of the Manto or bedded type. They have been the mainstay of the company's operations in the Illinois-Kentucky fluorspar district. In 1950-51, the company expanded its operations by purchasing fluorspar properties from Colorado Fluorspar Co. at Walden, CO. This location was operated from 1952 through 1958 and from 1968 through 1973 when it was closed permanently. In 1974, Ozark-Mahoning Co. was purchased by Pennwalt Corp. Presently, it is a wholly-owned subsidiary of that corporation. As the only major domestic producer of fluorspar in the US today, the company's ability to survive under the flood of imported material is directly related to the four major segments of its operations. These are: exploration, mining productivity, maintenance, and marketing. All are done in-house. Exploration The Southern Illinois fluorspar district is located in the most complexly faulted area of the central US. The formations are sedimentary in nature and range in age from Devonian through Pennsylvanian. The deposits are small, they range in size from a few thousand tons up to 900 kt (1 million st), with the average minable deposit being around 544 kt (600,000 st). The ore occurs in both nearly vertical vein deposits and in Manto or flat lying bedded deposits. Due to the relatively small size of the deposits and the depth at which they occur, a good low-cost exploration program is essential to ensure that new finds of ore are equal to the mining extraction rate. Ozark maintains a leased land position in Pope and Hardin Counties that will fluctuate somewhere between a low of 40 km2 (10,000 acres) up to a high of 129 km2 (32,000 acres), depending on total size of tracts leased. Most all lands are obtained through a standard lease purchase option, with a small minimum royalty per acre during the normal 10-year option period. All leases are standard and without deviation to control land cost. All land leasing is done through Ozark's geological staff, who also