Future Outlook on Manganese Ore Capacity and Supply-Demand Changes

Most of the world's manganese mines have a long history and are gradually depleting. This year, a hurricane caused the GEMCO mine to shut down, further exposing its crisis of insufficient lifespan. Although many mines in Australia face the dilemma of resource depletion, mines in South Africa and Gabon have a longer remaining lifespan. However, from the perspective of production and transportation of South African mines, the global manganese ore cost curve may become steeper in the future. As the world's largest manganese ore producer, most of South Africa's manganese ore is semi-carbonate rock mined underground. In contrast, Australia and Gabon have abundant and shallow high-grade deposits, mainly mined through open-pit methods, which makes South Africa face greater challenges in terms of cost and price fluctuations. The transportation method of South African manganese ore is a combination of rail and road, with cost control capabilities inferior to those of Australia and Gabon. In the next 10-20 years, the growth in manganese ore demand will mainly come from lithium-ion battery cathode active materials, while the demand for steelmaking will gradually decline in its application of manganese ore. According to relevant institutions, by 2040, the proportion of manganese ore demand for steelmaking will decrease from 94% to 87%, while the demand for lithium-ion batteries will increase from 2% to 10%. Although the global demand for manganese is expected to continue growing, the shift in demand structure will become more significant against the backdrop of peak global crude steel production. Looking ahead, both the supply and demand sides of global manganese are facing significant changes. The growth potential on the supply side is mainly concentrated on the development of battery-grade manganese ore, while the increase in capital expenditure for major manganese mines is limited. Some mines in Australia are about to deplete, and plans to extend their lifespan are urgently needed. Meanwhile, the capacity expansion rate of major producing countries such as South Africa and Gabon has significantly slowed, consistent with the growth rate of steelmaking demand. Although there is considerable growth potential for manganese demand in lithium-ion batteries, it is difficult to reverse the significant impact of steelmaking demand on manganese. In the long term, manganese ore will be in a pattern of reduced supply and demand, which will exacerbate price fluctuations and increase the sensitivity of supply to prices.