Manganese" The Strong, Silent Type

Press/Media: Press / Media

Period4 Nov 2011

Media contributions

1

Media contributions

  • TitleManganese - The Strong Silent Type (of Mineral Commodity)
    Degree of recognitionNational
    Media name/outletResourceStocks Magazine
    Media typePrint
    Duration/Length/Size1p
    CountryAustralia
    Date4/11/11
    DescriptionManganese is the quiet achiever amongst steel raw materials markets. Indeed, the element is the fourth most commonly used metal after iron, aluminium and copper. Manganese end-use is almost entirely as a constituent of alloys, especially in the steel industry, where the principal feedstock is ferromanganese. Inclusion of manganese into steels increases hardness, toughness, rigidity and wear resistance. Steel uses comprise over 90 per cent of manganese demand. Geographically, China dominates end-user demand at approaching 50 per cent of the global market, with China’s reliance upon imported ores set to increase. Other major consumers include Japan, Europe, the US, the Middle East and India. Manganese ore prices are negotiated between buyers and sellers – as there is no exchange traded price. International benchmark prices set the tone for negotiation. Price premiums are available for products that suit individual customer needs and where impurities are minimal. Capped iron, silica, phosphorus and alumina contents are key price differentiators with premiums increasing as higher quality ores become more difficult to source. Prices into China are now renegotiated on a monthly basis for a specified loading month. The grade that has been widely referenced as the benchmark grade is medium grade lump ore, with a minimum guaranteed Mn content of 43.5%. Various forms of manganese are traded. Ores for the steel industry typically have high manganese to iron ratios above 8:1. The market is denominated in price per dry metric ton unit where one unit relates to 1 per cent manganese per dry metric ton (dmtu). Benchmark pricing aside, there is no well-defined ‘spot market’, as there is for other bulk raw material markets such as iron ore. From peaking at $8.40/dmtu in mid-2010, cost-insurance-freight (cif) China prices have declined to around $5.30/dmtu in mid-2011. The price outlook is positive from 2011 levels in the near to mid-term with potential for US$7.00/dmtu prices in 2012/13. Total mine output globally is around 40 million tonnes of ex-mine manganese product. Manganese suppliers are fairly concentrated – meaning there aren't too many of them. Not surprisingly, existing producers such as BHP Billiton, Brazil’s Vale and Anglo American are looking to incremental expansions at their operations to feed into global demand growth. Unlike base metals and speciality metals markets, manganese is not recycled, so additional demand equates directly to required supply growth for mine supply. China, South Africa, Australia, Gabon, Brazil, Ukraine, India, Morocco are the main sources of mine supply. The principal manganese ores are pyrolusite, braunite and hausmanite. Most economic manganese deposits are hosted within sedimentary rocks. Sedimentary manganese deposits of Archaean age occur in Brazil, Guyana, Cote D’Ivoire, Ghana and Burkina Faso. The upper caps of these deposits are of higher grade as supergene processes have enriched the ore. Proterozoic age carbonate-associated manganese deposits occur in the Kalahari region of South Africa, in Brazil and in Colombia. The manganese ores at Groote Eylandt in Australia are again sedimentary, being pisolitic in nature, akin to certain iron ore deposits. Mining is mostly via open pit methods. High-grades can exceed 45% Mn. For example, the Woodie Woodie mine in Western Australia produces lump ore that typically achieves 49.5% Mn. By comparison, although the Chinese are a major producer, the average Chinese mine grade sits only around 30%. OMH Holdings’ (OMH) run-of-mine grade at its Bootu Creek mine in the Northern Territory is around the reserve grade of 22 per cent Mn. However, OMH sells a beneficiated ex-mine Mn produce at around 36 per cent Mn after on-site sorting. Parallels to iron ore beneficiation apply. That is, lump ore (> 6 mm) and fine product (-6mm) are differentiated. Lump product is generally smelted whereas fine product can be used as feed for chemical or electrolytic processing. Manganese ores are then smelted to produce ferromanganese, silicomanganese and ferromanganese-silicon. Ferromanganese production occurs in both blast furnaces and electric arc furnaces (EAFs). Slag from ferromanganese production is used as a feedstock to silicomanganese production. Manganese projects are fewer in number than iron ore projects. Selected ASX-listed companies with manganese projects include Aquila Resources (AQA), Aurora Minerals (ARM ), Azure Minerals (AZS), Discovery Metals (DML), Jupiter Mines (JMS), Montezuma Mining Company (MZM), OM Holdings (OMH), Shaw River Manganese (SRR), Southern Hemisphere Mining (SUH), Spitfire Resources (SPI) and Zenith Minerals (ZNC). The manganese sector is well placed to benefit from the continued growth of China’s steel industry: Watch that space.
    Producer/AuthorAspermont Publishing
    PersonsAllan Trench