Weekly Market Recap (Jun. 14) – This High-Flying Metal’s Returns Crush Copper and Gold

This High-Flying Metal’s Returns Crush Copper and Gold
Published on: Jun 14, 2024

Since 2024, the remarkable rise of copper and gold has become a significant highlight in the commodity market this year, capturing the attention of investors. However, in terms of price increases, the price of manganese ore (grade 44%) has soared by 99% year-to-date as of June 12, nearly doubling, while the price increases of copper and gold during the same period are only 15% and 12%, respectively.

Manganese ores are categorized into three grades based on their grade: high-grade (>44%), medium-grade (35%-44%), and low-grade (<35%).

According to a forecast by Business Research Insights, the global manganese ore market was valued at nearly $167 million in 2021 and is expected to reach nearly $227 million by 2031, with a compound annual growth rate (CAGR) of 3.13% during the forecast period. Although many people are not familiar with this metal, manganese is essential for hardening steel and preventing it from rusting. It is also crucial in the production of aluminum alloys and batteries.

Speaking of batteries,  Blackstone Minerals Ltd (ASX: BSX, OTCQX: BLSTF) is committed to sustainable mining and minimizing carbon footprint. The company aims to establish an integrated battery metals processing facility in Vietnam to produce nickel/cobalt/manganese precursor products for the rapidly growing lithium-ion battery industry in Asia. Additionally, the company’s Managing Director, Scott Williamson, mentioned during an interview on METALS 100 that Blackstone Minerals recently acquired the Wabowden sulphide nickel project in Manitoba, Canada, and is committed to a strategic approach towards “green mining in the future.”

Why has the price of manganese surged? This traces back to a tropical cyclone in Australia earlier this year.

On March 18, Tropical Cyclone Megan hit the operating facilities of Groote Eylandt Mining Co. (GEMCO) in northern Australia. The cyclone severely damaged infrastructure, including docks, port facilities, and transport bridges, leading to a halt in the export of high-grade manganese ore. Exports are not expected to resume until 2025. South32 owns 60% of GEMCO, while Anglo American owns the remaining 40%.

However, inventories from other regions provided a buffer, so this supply shock did not drive up manganese ore prices until April, with prices for other manganese products increasing even later. Zach Parsons, an analyst with Benchmark Mineral Intelligence, stated that the manganese market would remain tight and prices high until GEMCO resumes production. South32 is the largest manganese producer in the world, with GEMCO producing 3.545 million tonnes of manganese ore in the fiscal year 2023.

In 2023, global manganese ore production totaled 20 million tonnes, with the top three producers being South Africa, Gabon, and Australia. Australia accounts for 16% of the total, and the disruption in the supply of high-grade manganese ore caused by this event is significant.

Base Metals Copper Energy Metals Gold Manganese