Manganese prices have been surging on the back of increasing demand for electric cars, and the rise has prompted China’s Ningxia Tianyuan Manganese Industry (TMI) to reopen its Woodie Woodie manganese mine in Western Australia later this year.
Operations at Woodie Woodie were suspended at the start of 2016 due to historically low manganese prices. But TMI, which bought former owner ConsMin in May, says since then there has been a sustained increase in prices.
“We look at the macro dynamics of the manganese industry; we see more new demand coming from the high-end manufacturing and hi-tech sectors; for example, electric cars and batteries will have manganese as a component, and we want to catch up with that to produce high-end products to supply the market,” TMI Founder and Chairman Tianjiang Jia told The Australian.
“For high-end products we need high-end supply,” he added.
The company will spend AU$30 million to reopen the mine, and expects a full restart of operations by October, with first shipments to be made in November. TMI is targeting annual production of up to 1.5 million tonnes of final product.
ConsMin CEO Oleg Sheyko said the restart of Woodie Woodie is an important event for the Western Australian mining industry. Australia is the third-biggest manganese producer after China and South Africa, with yearly production of around 2.5 million MT.
“It was a very tough decision to close Woodie Woodie, but at the time it was simply unviable. We are now confident in the manganese market outlook and with an exploration investment can see Woodie Woodie continuing into the future,” Sheyko said.
Most mined manganese goes toward steel production, as the metal improves the properties of other metals in alloys. But manganese also has a growing role in the development of dry-cell batteries, and its use in that sector may enhance its outlook in the near future. In fact, a recent report says manganese is one of several crucial metals headed for a tight supply crunch.
“We notice that the market is still volatile but we have a much more positive view on the market in the medium and long term. That is the main rationale for us to reopen,” Sheyko added.
The restart of Woodie Woodie will create more than 300 jobs, and the company continues to look for geologists to lead its exploration program.
Don’t forget to follow us at @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.