Last week, the International Manganese Institute (IMnI) welcomed its members and the wider Mn community to Cape Town, South Africa. The conference included technical tours to major mines, alloy producers and South Africa’s sole manganese metal producer.

After an extended break to the conference schedule owing to COVID-19, it was a pleasure to meet up with old manganese friends and new in the Western Cape.  The setting was certainly fitting: manganese was not originally discovered in the vast Kalahari Manganese Fields but in Cape Town’s Hout Bay!  Here, amidst the scenic mountains, a deposit was first found in the 1870s and operated in the 1900s by Hout Bay Manganese, which shipped ore to Belgium from 1910 – 1911.  Ore was delivered to a jetty in the bay via a long steel chute from the mountains.  However, a combination of accidental ship sinking and the low grade of the ore itself was soon to make the exercise uneconomic. 

At the conference, delegates were treated to both a view of the Hout Bay mine site (from afar on the way to some wine tasting) as well as some of the jewels of the Kalahari Manganese Field (KMF), which hosts the largest manganese ore deposit in the world, and approximately 77% of the world’s land-based manganese reserves.  Currently, major mining occurs along the axis of the kidney-shaped Dimoten syncline.  Technical visits to the KMF included visits to the open-pit Tshipi, Mamtwan (South 32) and UMK mines.  The ore at these mines is associated with low-grade, carbonate-rich Mamatwan-type ore fields, with an average grade of 36% Mn and output generates between 15-17% of fines due to its friable nature. Currently, ore from each mine is transported to port via trucking (up to 20% of ore) and rail (Transnet) based on available capacity, a key bottleneck for the industry trying to get its material to international markets.

At the conference in Cape Town, Robert Ward from the International Institute for Strategic Studies (IISS) opened proceedings with a keynote global outlook.  His paper highlighted numerous key questions for business in and around changes to globalisation as we know it, with Sino-US decoupling, pandemic-led supply chain freezes, the rise of trade blocs and sanctions on Russia centre stage.  ‘Strategic economics’, ‘digital sovereignty', ‘economic statecraft’, ‘techno-nationalism’ and the (currently limited) viability of the RMB challenging the US$ represented additional, interesting areas of discussion.  Ward argued that the pandemic has catalysed geopolitical change and that the return of great power spheres could impact global rule making.  This view of a less globalised, polarised economic landscape speaks to a key issue of raw material supply risk and dependence on partner nations.  Project Blue places manganese as 16th out of 40 critical materials assessed in its Critical Materials Risk Index 2022.  The element faces relatively low supply and ESG risks, reflecting its global supply distribution, and scores highly in terms of its economic importance, owing to its use in steel and lithium-ion batteries.

Batteries were a key topic of discussion on the first day of the conference, with three papers devoted to better understanding lithium-ion battery technologies and market dynamics.  While many (technical) questions remain unanswered, automotive OEMs such as Tesla and Volkswagen continue to publicly underscore the vital role manganese will play in their future plans and thus in the lithium-ion and electric vehicle story.  While sizable volumes of battery-grade manganese are already consumed in LMO, NCM, and NCMA cathodes, more novel chemistries such as LMFP, LNMO, NMx and other nickel-rich technologies present considerable upside.  Project Blue forecasts double-digit demand growth for manganese sulphate in its base case.  While existing and planned capacity should be sufficient to meet demand over the medium term, the vast majority of the capacity is in China.  With downstream lithium-ion players and automotive OEMs looking to build more sustainable, local supply chains, there are considerable opportunities for ex-China producers with strong economics and ESG credentials to enter the market.

Day two of the conference focussed on the ore and alloy markets for manganese.  Sentiment remained buoyant, despite the fact that global steel output is contracting underpinned by COVID lockdowns, high energy prices, slowing construction demand and environmental curbs on output.  Optimism is in part helped by India’s emergence as a new engine for the steel sector.  The world’s second-largest producer enjoyed 7% y-on-y growth in the first four months of 2022 and remains a market with huge potential. 

The prevailing narrative for manganese alloys is that cuts in Brazil and China have been mostly offset by increases in the ROW, keeping the market tight.  Lower alloy production (mainly in China) is limiting ore demand for the year, though there are varying expectations for different ore grades with demand for higher-grade material supported.  Kevin Fowkes of AlloyConsult noted that production costs for both manganese ore and alloys have risen sharply in 2021 and 2022 although the increase for ore has been smaller than for alloy, because bulk sea freight tariffs have dropped heavily from their late-2021 peak, partly offsetting heavy increases in other cost elements.