Manganese alloy to remain reliant on imported ore despite domestic reserves

SHANGHAI, May 23 (SMM) – Cost and technical issues are likely to keep China’s manganese alloy production reliant on imported ores, even as vast domestic reserves have been found.

More than 1.1 billion mt of manganese mineral reserves were explored across China during 2011-2018, according to the report by China Natural Resources News.

Data showed that China’s imports of manganese ore have continued to grow, registering 27.63 million mt in 2018 and 21 million mt in 2017, compared to 6.64 million mt in 2007. The dependence on seaborne materials has exceeded 60%.

Asia is the major production area of low-grade manganese ore, with China and India as the leading producers. Chinese materials mostly go to the production of electrolytic manganese and electrolytic manganese dioxide.

Manganese alloy production is almost 100% reliant on imported ore, with manganese oxide ore accounting for the majority.

Miner South32 said in its annual report that operating costs for its Australian manganese ore stood at about $1.57/dmtu on a FOB basis. CIF China costs would be $3.5/dmtu based on current freight, showed SMM calculations.

OMH’s CIF China costs for its Australian manganese ore, with over 44% Mn, less than 5% Fe, less than 0.01% P and 1.1% wt, stood at about $2.7/dmtu in September 2018, according to the miner’s annual report.

Prices of domestic manganese oxide ore with the highest grade are similar to those of high-quality Australian materials. Most domestic resources are located in Yunnan, away from the major production areas of manganese alloy in north China, which results in high transport costs.

For domestic manganese carbonate ore, low Mn content and various impurities deterred alloy producers, despite lower costs. Prices of domestic manganese carbonate ore stood at 700-800 yuan/mt, and it costs less for transportation as they are mainly produced in central China.