Thursday, June 16, 2011

China's shrinking Manganese ore bodies adding to price pressure

China produced 1.4 Mt of manganese in 2010 but future output may fall dramatically due to shrinking ore bodies. “China may lose 500,000-700,000 t/y of metal capacity in the next 3-5 years if no new resources are found,” stated Zeng Xianbo the General Secretary of China’s Sodality of Manganese Plant Directors in a recent report from Metal Pages.

This massive reduction in supply is likely to result in higher prices, as well as moves by China to protect their resource.

In an exclusive interview with Manganese Investing News, Larry Reaugh CEO and Mike Mcleod Chief Operating Officer of American Manganese spoke about the prospects of manganese producers going forward.

“I believe that China will have to make a move to protect that resource, they don’t have the same quality ore bodies as in the past. I see the next step for China is to protect the resource similar to their recent actions for molybdenum,” stated Reaugh.

The desire for manganese supply has until recently, been primarily linked to future steel growth. Emerging technologies are also making demands on manganese which could dramatically increase the level of demand.

“The annual demand for electrolytic manganese dioxide is currently around 270,000 t. The rise of electric vehicle sales to approximately 10 million units per year, which according to industry projections could occur between 2015 and 2020, could increase the annual demand for EMD to about 5 Mt,” stated Mike Macleod.

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