South African fluorspar producer Sallies has suspended production at its Witkop mine because of a collapse in demand for acid-grade fluorspar due to the global economic downturn.

The company has failed to secure future orders and because it has already produced sufficient fluorspar to fulfil its contractual obligations until the end of 2009 it has stopped production to preserve cash reserves, Sallies said.

Many international fluorspar consumers have been de-stocking since November 2008 but still have sufficient stock because of low production levels.

Sallies has notified employees and unions that it will begin a 60-day consultation period before retrenchments, required under South African law.