Mining manganese in Australia can be challenging, but a few companies operating in the country are thriving. Here’s a brief overview.
Australia is the third-largestmanganese producer after China and South Africa, with yearly production of around 2.2 million MT. Its exports of the metal are valued at about $1 billion annually, and it has the fourth-largest reserves of manganese in the world.
That said, the history of manganese in Australia is fairly short. The metal was first discovered in the country in 1803, but was not mined until 1966.
Currently, all economic demonstrated resources for manganese in the country are located in Western Australia and the Northern Territory. Groote Eylandt, a world-class manganese deposit in the Northern Territory, is the center of most manganese-mining activity in the country.
Not long ago, a drop in the manganese price pushed two other main manganese-producing mines in Australia into care-and-maintenance mode. Operations were suspended at OM Holdings’ (ASX:OMH) Bootu Creek mine from December 2015 to February 2017, and Consolidated Minerals’ Woodie Woodie mine closed for a similar time period. Other companies have also faced challenges.
But 2016 and 2017 saw a boost in price that had producers of manganese in Australia feeling hopeful. Large producer South32 (ASX:S32,LSE:S32) ramped up production in Q1 2018 in an effort to capitalize on favorable conditions, and prices are expected to stay supported in 2018 on strong demand.
Throughout the ups and downs over the years, a few major Australia-focused manganese miners have managed to thrive. Below is a look at three of them — companies are public and listed in descending order of market cap; all had market caps above AU$100 million at the time of publication. If you think we missed a company that should be included, please let us know in the comments.
Manganese in Australia: Major companies
Market cap: AU$18.59 billion
South32 is a main producer of manganese in Australia. The company was demerged from BHP Billiton (NYSE:BHP,ASX:BHP,LSE:BLT) in 2015, and owns 60 percent of Groote Eylandt Mining Company (GEMCO). GEMCO is currently one of the largest and lowest-cost manganese ore producers in the world, and operates the Groote Eylandt mine.
As mentioned, Groote Eylandt is located in the Northern Territory. It is an open-cut strip-mining operation, and workers at the site take care of crushing, screening, washing and dense media separation. The mine produces lump and fines products, and has a capacity of 4.8 million tonnes per year (on a 100-percent basis). It benefits from being close to Asian export markets.
Anglo American (LSE:AAL)
Market cap: GBP 23.8 billion
Another key manganese miner in Australia is Anglo American. It holds the remaining 40-percent stake in GEMCO and thus has an interest in Groote Eylandt. It also has a 40-percent interest in Tasmanian Electro Metallurgical Company, which operates Australia’s only manganese ore processing plant.
Anglo American’s other manganese projects are in South Africa and South America; its interest in them comes through a 40-percent stake in Samancor. The company has other metals operations in many parts of the world, including Africa, Brazil, Chile, North and South America, Australia, China, India and Japan.
OM Holdings (ASX:OMH)
Market cap: AU$920 million
OM Holdings is an independent, internationally diversified minerals group whose primary focus is on expanding its fully integrated manganese business. Its international operations are currently comprised of a Singapore-based metals marketing business supported by a manganese mine in Australia and a ferroalloy processing facility in China.
The company’s 100-percent-owned Bootu Creek manganese project in the Northern Territory has been producing for over a decade, although as mentioned it was offline between 2015 and 2017. An upgrade in 2009 boosted Bootu Creek’s total mineral resources by 8 percent, to 32.9 million tonnes at 23.1 percent manganese. It also extended the asset’s mine life to over 13 years based on the actual 2009 ore mining rate of 2.4 million tonnes per year and proven production capability of 1,000,000 tonnes per year of high-grade manganese
Privately owned Consolidated Minerals is another major producer of manganese in Australia, and it has a minority shareholding in OM Holdings. As mentioned, it also owns the Woodie Woodie manganese mine via a wholly owned subsidiary called Pilbara Manganese.
Manganese in Australia: Junior companies
In addition to the manganese miners mentioned above, there are also a few smaller companies focused on exploring for manganese in Australia. Those include Bryah Resources (ASX:BYH), Element 25 (ASX:E25), Pacifico Minerals (ASX:PMY) and Spitfire Minerals (ASX:SPI).
All of these juniors are public and had market caps of over AU$5 million at the time of publication. Again, if we missed a company you think should be included, please let us know in the comments.
What do you think is the future of manganese in Australia? Will prices continue to sustain production?
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Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.