Manganese Prices Surge, Outpacing Copper and Gold
Manganese, a crucial ingredient in steelmaking, has outperformed copper, gold, and several other commodities this year after a cyclone halted exports from the world’s second-largest mine in March.
Prices of 44% grade manganese ore have nearly doubled since the beginning of the year, surpassing gains of 15% in copper, 12% in gold, and almost 30% in tin.
The cyclone struck the Groote Eylandt Mining Co. (GEMCO) operation in northern Australia, damaging critical port and haulage infrastructure and halting high-grade exports. Shipments are expected to remain suspended until 2025. South32 Ltd. owns 60% of GEMCO, while Anglo American Plc holds the remaining 40%.
Although not widely recognized, manganese is vital in steelmaking to enhance the metal’s strength and reduce brittleness. It is also used in batteries and aluminium alloys.
The surge in manganese prices was initially delayed due to stockpiles elsewhere that provided a buffer, according to Benchmark Mineral Intelligence analyst Zach Parsons. The supply shock impacted ore prices in April and took time to affect other manganese products, he said.
Supply constraints and elevated prices are expected to persist until GEMCO resumes operations, Parsons added.
The high prices have encouraged pure-play manganese miners to sell lower-grade material. ASX-listed Element 25 Ltd. informed shareholders this week that current ore production prices “present an opportunity to generate short-term cash flow.” The company may sell stockpiles of lower-grade manganese from its Butcherbird project, which is profitable in the current market.
Other companies might accelerate projects in development. “Miners who were already planning to commence operations might move their timetable up to capitalize on higher prices this year, but this represents a small number of producers, insufficient to bridge the supply gap,” Parsons said.
In Zimbabwe Manganese is found in Kwekwe, Gweru, Makonde, Mberengwa and more deposits have been reported in areas such as Dotito.