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					                                                                               MANGANESE MATTERS
                                                                                                  October 26, 2010 - Issue n° 17



                                                                           Last call for IMnI‘s REACH Registration Services
Article Index                               3
                                                                                           Before Fee Increase

IMnI UPCOMING MEETINGS
                                                                This service, which operates on a first-come-first-served basis, has been
REACH General Assem bly                                         running effectively since September 1st. Now that the REACH deadline
Friday, November 12, 2010
2 to 4PM
                                                                (November 30th) is fast approaching, slots are becoming increasingly
Intercontinental, Berlin                                        tight. As a result we will be increasing our fees as of November 1st. To
                                                                avoid paying the increase, we strongly advise you to book now. For
OHES Com m ittee Meeting                                        more information, contact Dr. Doreen McGogh, IMnI OHES Manager:
Sunday, November 14, 2010
8 to 10AM                                                       doreen.mcgough@manganese.org
Intercontinental, Berlin

Statistics Comm ittee Meeting
Sunday, November 14, 2010
10 to 11:30AM                                                                          Two Companies Apply for Membership
Intercontinental, Berlin

REACH Steerco Meeting
Sunday, November 14, 2010                                       Simbol Materials has applied for Affiliate Membership. Based in
11:30AM to 1PM
Intercontinental, Berlin
                                                                Pleasanton, California, the privately owned company established in 2007
                                                                plans to produce Mn sulphate and EMD. President and CEO Luka
M&C Comm ittee Meeting                                          Erceg will be represent ing Simbol at the IMnI.
Sunday, November 14, 2010
1:30 to 3PM
Intercontinental, Berlin                                        Luxembourg-based trading house Luxalloys S.A. has applied for
                                                                Affiliate Membership. The company, established in 2001 and part of the
Board Budget Comm ittee                                         Fesil Group, has appointed Business Development Manager Mr.
Sunday, November 14, 2010
3 to 3:30PM                                                     Parham Ghazi Saeedi as its representative to the IMnI.
Interncontinental, Berlin

Board Meeting
Sunday, November 14, 2010
3:30 to 5:30PM
Intercontinental, Berlin




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            Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                          1
  The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
                                                                           27th Intl Neurotoxicology Conference (NEUROTOX 27)
                                                                           October 30 – November 2, 2011 - Little Rock, Arkansas
                                                                                                           th
                                                                           Metal Bulletin 26 International Ferro Alloys Conference
                                                                           November 14-16, 2010 – Int ercontinental Berlin




          Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                          2
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
                                                                                ARTICLE INDEX

          ASIA (OTHER)

                        TE X update on Japanes e market tendency on ferroalloys imports ................................. 22/10/10
                        OMH Seeking Manganese Smelting in Malaysia .......................................................... 14/10/10
                        Enquiries increase for Indonesian manganese ore ....................................................... 13/10/10

          CHI NA

                        Chinese spot manganese ore prices ease on BHP price cuts ........................................ 25/10/10
                        BHP cuts Mn ore offers to China for Nov ..................................................................... 22/10/10
                        Chinese ferroalloy output up 7% on price surge ........................................................... 21/10/10
                        Chinese ferroalloys weekly roundup - Mixed picture for post-holiday markets ................. 14/10/10
                        CITIC Resources aims to raise $239 mln in Dameng spinoff ......................................... 12/10/10
                        Chinese infrastructure demand and a lack of supply ..................................................... 11/10/10

          INDIA

                        Essar to set up ferroalloy plant in Madhya Pradesh ...................................................... 25/10/10
                        MOIL mulls INR 900 crore CAPE X plan over the next 3 to 4 yrs .................................... 22/10/10
                        MOIL scouting manganese ore mines overseas ........................................................... 21/10/10
                        Indian market report - September iron ore exports drop 47% ........................................ 21/10/10
                        Govt looks to 'steel' show with MOIL, SAIL issues ........................................................ 21/10/10
                        CARE assigns CA RE IPO GRA DE 5 to IPO of MOIL .................................................... 15/10/10
                        Indian market report - Hopes for market revival post-Diwali, Commonwealth games ....... 14/10/10
                        Targeting about 50% top line growth this year: GD Mundra, Director, Sarda Energy ....... 13/10/10
                        MOIL IPO dates advanced; pre-road shows from Oct 21 .............................................. 13/10/10
                        Indian market report – India forecast to become world‘s third largest steel consumer ...... 12/10/10
                        SAIL mulls steel plant in Rajasthan ............................................................................. 11/10/10
                        Indian ferro-manganese market stable......................................................................... 11/10/10
                        India sends first ROV to ocean bed for mineral exploration ........................................... 11/10/10
                        OMDC to expand and become mining giant ................................................................. 08/10/10
                        MMTC to export 20,000 tonnes of manganese ore ....................................................... 08/10/10

          OCEANI A

                        Australian manganese mines face cyclone threat ......................................................... 21/10/10
                        OMH says manganese output hits record .................................................................... 21/10/10
                        OM Holdings, ConsMin end tie-up talks ....................................................................... 13/10/10
                        Australia manganese miner OM Holding's Q3 output up 16% on quarter ........................ 13/10/10
                        Shaw River announces drilling results at Baramine Project ........................................... 12/10/10

          EUROPE

                        EU zero duty initiative spreads to Zn, Mo, Cr, FeMn ..................................................... 22/10/10

          CIS

                        Ukraine urges US to revise A D duty on ferrosilicon manganese .................................... 21/10/10
                        Ukrainian ferroalloy out put in 9 months up by 57pct YoY .............................................. 15/10/10
                        Ukrainian ferroalloy out put increases by 57 percent in Jan -Sept .................................... 11/10/10

          AFRI CA & MIDDLE EAST

                        Exxaro Partners With Assmang On Its AlloyStream Technology .................................... 25/10/10

          Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                          3
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
                        Gabon, CITIC to mine 26 mln T manganese resource .................................................. 23/10/10
                        Chinese company to run Gabon manganese mine ....................................................... 21/10/10
                        Eskom, Transnet bonds seen as attractive ................................................................... 20/10/10
                        Eramet says to sell Comilog stakes to Gabon .............................................................. 20/10/10
                        Infrastructure deficiencies constraining South Africa‘s manganese growth ..................... 15/10/10
                        SA stocks, rand at highest in more than 2 years ........................................................... 13/10/10
                        Nationalisation could be a plan to bail out failing companies ......................................... 13/10/10
                        Ivory Coast manganese exports off almost a fifth ......................................................... 11/10/10
                        Sola Res ource Visits Brazil, Progresses Due Diligence Process ................................... 08/10/10
                        ‗Extraordinary‘ measures required for SA to avoid blackouts from 2011 to 2016 ............. 08/10/10

          AMERI CAS

                        US silicomanganes e market stable, eyes 2011 bounce ................................................ 12/10/10
                        US ferro-manganese edges up again on supply worries ............................................... 12/10/10
                        DLA hands over implementation plan to Congress ....................................................... 11/10/10

          GENERAL INFORMATION

                        Ryan‘s Notes Weekly ................................................................................................. 25/10/10
                        Ryan‘s Notes Weekly ................................................................................................. 18/10/10
                        Ryan‘s Notes Weekly ................................................................................................. 11/10/10

          STEEL NEWS

                        US steel demand for remainder of 2010 remains a concern – California Steel ................ 25/10/10
                        European steel sector faces shaky Q4 after weak Q3 ................................................... 25/10/10
                        Posco presses ahead with Indonesian steel mill project ................................................ 21/10/10
                        Global steel production rises to 112Mt in Sept .............................................................. 21/10/10
                        CISA Predicts Chinese Steel Output To Slow In Q4 ..................................................... 21/10/10
                        EUROFER sees recovery in Eu ropean steel market ..................................................... 14/10/10
                        China daily steel out put 8.5 pct higher late Sept-CISA .................................................. 14/10/10
                        Weakening demand continues to hammer U.S. steel production rates ........................... 13/10/10
                        Nippon Steel aims for 50-60m tpy out put through overseas expansion .......................... 12/10/10
                        ArcelorMittal to switch to smaller steelmaking hubs in India ........................................... 12/10/10

          OHES & SCI ENCE



                                                                                        ************************

          EMM

                        Chinese electrolytic manganese prices stable .............................................................. 22/10/10
                        European manganese market resumes advance .......................................................... 11/10/10
                        Chinese manganese flake prices make more gains in tight market ................................ 11/10/10

          EMD

                        Delta EMD Falls After Ending Talks to Sell Last Remaining Unit ................................... 25/10/10




          Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                          4
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
                                    THE MANGANESE INDUSTRY


                                               ASIA (OTHER)                                     back to index

   TEX update on Japanese market tendency on ferroalloys imports
   Steel Guru, 22/10/10

   TE X reported that the market tendency by item on imports of ferroalloys into Japan at October 15th
   2010 is as follows:

   General view
   In the course of a political tension between Japan and China as continued, the long holidays in China
   were over. After the holidays had passed, domestic prices of ferrosilicon and silicomanganese in China
   have fallen slightly. A view prevailing in the market is that this small fall of the prices has been caused
   by the sales to gain a profit and a further and substantial fall of these prices is supposed to be unlikely.
   This aspect is a different development of pric es from that aft er the 2008 B eijing Olympic Games
   finished. The trading companies concerned have been rather interested in how to let suppliers deliver
   smoothly the cargoes for Japan under t he outstanding cont racts than new contracts to be negotiat ed.
   The situation at present is that, if new purchases of bulk ferroalloys would have been contracted with
   Chinese suppliers at high prices, an antinomy, which the cargoes to be fulfilled under the outstanding
   contracts are not delivered, should come up.

   Ferrosilicon
   Domestic price of ferrosilicon in China has weakened by a fall of CNY 100 to CNY 200 per tonne. The
   current price of Chinese ferrosilicon offered for export is in the range of USD 1,750 to USD 1,800 per
   tonne CIF Japan, having reflected a weak tone of the domestic price as mentioned above and had a
   small fall of US D 50 per tonne, but the price as sporadically seen has taken a bullish level of USD 1,9 00
   CIF. The production activities of ferrosilicon in the Silicon Land of China are uneven and there are the
   three cas es of t ransmission of electricity has been actually stopped in Ningxia Hui Autonomous Region,
   producers have been still negotiating sickly with the authorities concerned on supply of electricity in
   Inner Mongolia Autonomous Region and some plants are still keeping t o produce illegally ferrosilicon.
   However, the production of ferrosilicon in China has been basically strengthened to be regulate d and,
   therefore, a possibility to improve the operation toward November to December of this year is thought to
   be nil. It is wondered whether this weak tone of price for Chinese ferrosilicon is due to the sales to gain
   a profit or not. At all events, a forecast of price for Chinese ferrosilicon is not clear yet.

   Silicomanganes e
   The price of silicomanganese offered from India for export has turned to rise to a level of US D 1,450 to
   USD 1,480 per tonne CIF Japan. This rise of pric e for Indian silicomanganes e is still very far from a
   substantial rally but the negotiations with European steel mills on price of Indian silicomanganese are
   being resumed. The matter, having moved to diversify the countries for sales of Indian
   silicomanganese, has made Indian side bullish. However, the price of Chinese silicomanganese offered
   for export is on a level of US D 1,600 to USD 1,650 per tonne FOB by a fall of USD 50 per tonne but a
   differential of prices between Indian product and Chinese product is still substantial. Unle ss contracts
   are able to be concluded on long term base, it will be hopeless to be successful in making contracts at
   fixed prices. Domestic price of silicomanganese in China has been maintained on a high level of CNY
   9,250 per tonne at present but a discount of CNY 30 to CNY 50 per tonne from this price is also
   sporadically seen.

   Manganese metal
   Guangxi Zhuang Aut onomous Region and Guizhou Province are the main bases to produc e electrolytic
   manganese metal in China but are being cut to supply electricity in relation to the problem of exhaust of
   carbon dioxide. The parties concerned said that the operation rate has declined to 50% of nominal
   capacity. Owing to the additional factors, which the difficulties to secure manganese carbonate as raw
   material are coming up and pric e of manganese carbonate has risen steeply (to CNY 850 to CNY 900
   per tonne of material), the price of Chinese electrolytic manganese metal seems to be inevit able to rise.
   The price of manganese ore produced in China has at last risen to a higher level than that of



Manganese Matters n° 16 (Issued October 8, 2010)                                           index           5
        manganese ore to be imported into China. The quality of manganese ore to import into China has
        differed from that of domestic ore produced in China but the latest prices of manganes e ore fixed with
        Chinese customers on imports are in the range of US D 6.10 to USD 7.20 per Mn 1% CIF China. For a
        reference, following the high prices prevailing in domestic market of China, the price of Chinese
        electrolytic manganese metal offered for export has risen to a level of US D 3,400 to USD 3,45 0 per
        tonne FOB. In view of the strengthened exchange rate of Japanese Y en against US dollar, Japanese
        side is supposed to be in a position to purchase Chinese electrolytic manganese metal at USD 3,400
        per tonne CIF as the maximum.

         (Sourced from TE X Report Limited)

        OMH Seeking Manganese Smelting in Malaysia
        Resource Investor, 14/ 10/10

        OM Holdings Ltd. said it had submitted an application to the Malaysian government for a smelting plant
        and was conducting a feasibility study for an integrated low -cost alloy production center in Southeast
        Asia to support the growing Asian steel industry.
        The Singapore-based and Australia-listed company also said its flagship Bootu Creek mine in
        Australia‘s Northern Territory had set a record for third quart er production o f 227,968 tonnes of
        manganese – increasing 16% from the previous quarter and 11% from a year earlier. Full year
        production from the five-year-old mine was forecast to rise 31% from a year earlier to 850,000 tonnes.

        ―We are delighted with the performance o f Bootu Creek, which continues to demonstrat e the success
        of our production strategy,‖ Peter Toth, chief ex ecutive officer, told investors in a presentation, adding
        that the company‘s strategic growth initiatives would continue to transform the company in to an
        independent globally integrated manganese company.

        OM Holding also has commodity trading operations in Singapore and a wholly -owned smelter and sinter
        plant at the Quinzhou port on China‘s Beibu Gulf coast on the S outh China S ea. Executives said the
        smelter had produced a record 17,719 tonnes of alloy and 48,625 tonnes of sinter ore in the third
        quarter but added that production interruptions are expected in the fourth quarter becaus e of power
        supply restrictions.

        The company said it had ended talks that started in April on a possible tie-up with Ukraine-owned
        Cons olidated Minerals Ltd. involving Consolidated‘s Woodie Woodie manganese mine in Western
        Australia‘s Pilbara region.

        Executives said in a statement that due diligence on Woodie Woodie had b een completed ―but no
        formal transaction opportunity is being progressed due to difficulties identifying a mutually suitable
        transaction structure. ‖ The company has previously said it plans to triple its manganese production
        capacity to 3 million tons by 2 012 and challenge the dominance of industry leaders like BHP Billiton and
        Vale.

        OM Holdings third quarter market report update is expected to be released on Oct. 22, executives said.

        Enquirie s increase for Indone sian manganese ore
        Metal-Pages, 13/10/10

        The Indonesian manganese ore market is currently stable with export prices keeping firm in the range of
        $6.40-6.60/dmtu for 45% material. Prices remain firm for exports to China, said a trader.

        He added that the Chinese market was cautious and hence no deals had been concluded since t hey
        returned from the National holiday.

        A trader in Indonesia explained that his monthly trade volume was around 2,000 tonnes. He was
        offering material at $6.60/dmtu at present and his regular buyers were buying at $6.60/dm t u CIF China.

        He stated that in the past few days they had rec eived a lot of enquiries and hence demand appeared
        good. They had since maintained the price level and were watching for the market‘s reaction.


  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                         6
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        An Indian import er said he was importing some ore from Indonesia.

        ―The quality of the ore is good and I am getting material for good prices. So we have decided to import
        from Indonesia. A lot of Indian traders currently are sending enquiries to Indonesia," he confirmed.


                                                                                            CHINA                                                                       back to index

        Chinese spot manganese ore prices ease on BHP price cuts, reduced alloys production
        Metal-Pages, 25/10/10

        Chinese spot manganese ore prices have eased in the past week on lower offer prices made by BHP
        Billiton for its shipments to China in November and the country‘s reduced output of manganese alloys
        caused by Beijing‘s energy saving targets, market participants said.

        Spot prices for 44-46% grade lumpy ores are at RMB 54 -58/mtu, down from the previous level of
        RMB56-60/mtu, which has been unchanged in the last two mont hs.

        Australian miner BHP Billiton is report ed to have cut its offer price for siliceous chip with minimum 43%
        metal content to $6/mtu basis CIF China, from its offers of $6.40/mtu in October. Offers of 44% gr ade
        metallurgical lumps are at $6. 50/mtu on the same basis, from $7.20/mtu. Offers of 49% lumps are at
        $6.95/mtu, down $0.70/mtu.

        ―Since BHP is the largest ore supplier to China, their price cuts are certainly making an impact on the
        Chinese spot market,‘ said an ore dealer.

        Imports of manganese ores from Australia totaled 2.16 million tonnes in the first three quarters of this
        year, compared with 1.86 million tonnes in the same period of 2009, according to latest Customs data.

        ―The price cuts do reflect the current status of the market as demand has been slow since lots of
        manganese alloy producers shut down their furnaces due to the government‘s tough targets of energy
        saving and emission reduction. In addition, production rates in southern China provin ces are also
        dropping due to the approach of the dry season when power supplies typically slump and tariffs are
        expensive,‘ a second ore trader said.

        A third trader agreed, saying. ―Stocks in the spot market have been high while physical demand has
        kept lagging.‖

        According to latest industry estimates, 1.55-1. 60 million tonnes of ores is stocked at major Chinese
        ports, significantly outstripping imports of 750,000 tonnes in September.

        China, the world largest consumer of manganese ore, imported 8.64 mill ion t onnes in the January-
        September period, up 38.9% from 6.22 million tonnes as compared to one year ago.

        BHP cuts Mn ore offers to China for Nov
        Metal Bulletin, 22/10/10

        BHP Billiton cut its manganese ore offers to China by up to 10% for November, after keeping them flat
        for October, on growing inventory pressure and falling demand.

        Chinese ferro-alloy producers have been cutting back on ore purchases due to cutbacks in alloy output
        in recent months as local governments pile on power curbs to try and m eet national emissions targets.

        BHP's offers of siliceous chip with minimum 43% metal content are at $6 per mtu cif China for
        November shipment, down $0.4 or 6.3% from October, said market participants in China.

        The miner's offer price for siliceous lump with minimum 43% met al content has als o dropped by $0.7 or
        9.7% to $6.5 per mtu.

  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                         7
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        Offers were also cut for siliceous lump with minimum 49% metal content by $0.55 or 7.3% to $6.95 per
        mtu.

        "Their offers are lower than current spot market levels, and so will further dampen the spot market and
        will lead spot prices to move down soon," said a trader in Lianyungang, Jiangsu province.

        For the moment, offers of spot ore are keeping steady in thin business.

        Spot offers of 43% Mn lump ore from Australia are at 56-58 yuan ($8.4-8.7) per mtu in Tianjin/Qinzhou
        port and 48% lump ore from Gabon is being offered at 58 -60 yuan per mtu in Zhanjiang port, said
        traders.

        Chinese manganese alloy prices started to fall back aft er the national day holidays in the first week of
        October, after a price s urge in S eptember that saw ferro -manganese prices gain 15% and silico-
        manganese prices jump 18%.

        Silico-manganese is trading at 8,700-9,000 yuan per tonne, while high-carbon ferro-manganese is at
        8,300-8,500, bot h down 200-300 yuan post-holiday.

        "The alloys market is not good now, on one hand, prices are falling now, on the other hand, their
        operating rates remain low on limited power," said analyst in Shanghai.

        More ferro-alloys smelters in Ningxia and Inner Mongolia have shut down after a new round of power
        cuts were introduced this month.

        "All the smelters in Ningxia were asked to close before the 25th of this month, while in Inner Mongolia,
        smelters have received a notice to cut production," added the analyst.

        Demand for manganese ore will weaken in the fourth quart er, he said, forecasting that spot ores prices
        might would lose 3-4 yuan in the near term.

        Following B HP's pric e cut, offers of African 45% lump ore were als o cut by $0.4 to $6. 3 per mtu, said
        market sourc es.

        Manganese ore stocks in China were reportedly still as high as 2.7-2.8 million tonnes, with nearly half
        held at Tianjin port.

        Also, "there is an obvious inc rease in Qinz hou port as some producers increas ed their ore purchases
        when prices surged in Septembe r", said a trader in Qinzhou port.

        BHP is not expected to cut offers further any time soon as offers are already the lowest level since the
        second half of last year, said market participants.

        Also, China's demand for alloys will come back when the power and prodduction curbs come off after
        two to three, they said.

        Chinese ferroalloy output up 7% on price surge
        Metal Bulletin, 21/10/10

        China's daily ferro-alloy output climbed out of a five-month low to 66,433 tonnes in September, tracking
        a price rebound that encouraged smelters to resume production.

        "I think output in October will mostly keep at around the current level as the market has roughly
        stabilised," said Zhang Zengchan, assistant to the president at China Ferro -alloys Industry Assn (CFIA).

        Daily output of ferro-alloys in September was up 7.1% from August but still 4.8% lower year -on-year,
        according to the national statistics bureau.



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                         8
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        Many smelters were forc ed into suspension in July and August as local governments introduc ed power
        curbs to help meet national energy savings and emissions reduction targets.

        However, many were encouraged to restart after ferro -alloy prices soared in Sept ember.

        "The fast rising prices attracted some producers to restart production, especially for ferro -silicon," said
        Zhang.

        Ferro-silicon prices surged by 20-23% in September to a two-year high, while ferro-manganes e and
        silico-manganese also jumped by 15% and 18% respectively.

        "I hear some ferro-silicon smelters in Ningxia restarted again when the government 's c hecks were not
        very strict," said a ferro-silicon analyst in Beijing.

        In September, China's output of ferro -alloys rose to 1.99 million tonnes, taking the nine-month t otal to
        produced 18.05 million tonnes, up 15.4% year -on-year.

        Chinese ferroalloys weekly roundup - Mixed picture for post-holiday markets
        Metal-Pages, 14/10/10

        Chinese ferro-alloys markets were a mixed picture in the first week after the national holidays. Some of
        the supply-driven risers, such as ferro-silicon and manganese alloys, lost momentum due to the
        absence of physical demand, while noble alloys, particularly molybdenum, which had suffered weeks of
        inactivity, are picking up on renewed buying interest after the holidays.

        The continued appreciation of the Yuan has kept Chinese export offer prices high, although real
        business has remained thin due to competition from cheaper material offered by other countries whose
        production costs are far lower and export restrictions are loose.

        FERRO-SILICON

        Chinese ferro-silicon prices have eased after the week-long National holiday as physical demand lags,
        although many smelters remain idled due to the country‘s energy saving programme.

        ―It is weakening consumer demand and quiet trading activity pushing prices down,‘ said a producer
        source. ―However prices are not poised for a dramatic drop -off because of the uncertainty over the
        government‘s restrictive environmental policies. It remains unclear when t he closed smelters will be
        allowed to reopen.‖

        ―It‘s hard to predict at this moment,‖ a second trader said. ―There are different versions of reports – we
        have heard that some closed producers have restarted in private, while some people told us that local
        governments of some regions will persist with the energy saving campaign and close more furnac es.‖

        Export prices in the meantime have dropped to $1,650 -1,700/tonne basis FOB for 75% grade material,
        from the previous level of $1,700-1,750/tonne.

        ―Overseas demand is far from strong and business is not very active either. There‘re not many buying
        enquiries, nor transactions,‖ an export trader said.

        China exported a t otal of 507,689 tonnes of ferro -silicon in the first eight mont hs of this year, more than
        doubling the 228, 396 tonnes exported in the same period of 2009. However, exports of 37,654 tonn es
        in August alone were down sharply from 69,636 tonnes in July, according to latest Customs data.

        The Chinese magnesium market has eased in the last couple of weeks as shaky consumer demand
        failed to support high prices which had been driven by production costs, particularly the cost of ferro -
        silicon reductant.



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                         9
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        MANGANES E

        The Chinese electrolytic manganese market has continued to make noticeable gains after the National
        Day holiday, with prices for manganese flakes rising by RMB200 -300/tonne in the past few days.

        ―It‘s being very difficult to secure supplies of manganes e carbonate and there is a tight supply for
        sulfuric acid. Increases in production costs have pushed the metal‘s price upward and the trend is
        expected to persist for some more weeks as low capacity utilization is showing no signs of
        improvement,‖ said a producer in Hunan province.

        Export offers have also surged to $3,350 -3,400/tonne basis FOB China via legal routes, while material
        shipped from Vietnam with the 20% export tax evaded is at only $3,200/tonne basis CFR Rotterdam.

        ―Enquiries from western customers have increased after the holiday. European buyers have become
        active again and are asking for both spot material in Rotterdam and prompt shipments from China.
        However, Chinese export offers via legal routes remain hard to find much acceptance and c heaper
        material via Vietnam and other sources is still favorable,‖ said an export trader.

        The European spot manganese flake market has resumed its advance from early September in the past
        week on increased offers from key exporter China, where production has been cut due to meet energy
        consumption and emissions targets.

        CITIC Re source s aims to rai se $239 mln in Dameng spinoff
        Reut ers, 12/10/ 10

        CITIC Resources expects to raise HK $1.85 billion ($239 million) in a Hong K ong listing of CITIC
        Dameng Holdings (CDH), in which it holds a 52.4 percent stake, according to a Hong Kong bourse filing
        on Tuesday.

        Shareholders of CITIC Res ources will meet on Oct 27 to vote for the proposed spin-off.

        CITIC Resources estimated t hat its manganese mining and processing unit could achieve a minimum
        market capitalisation of HK$6 billion in the initial public offering.

        CDH, which is involved in exploration, mining and processing of manganese, had net assets o f HK$1.1
        billion ($142 million) as of June 30.

        It generated pre-tax profit of HK$84 million for the first six months this year, compared with HK $75.3
        million for the full year in 2009 and HK $431.1 million in 2008.

        UBS, Bank of America Merrill Lynch and C ITIC Securities are handling the offering.

        Chinese infra structure demand and a lack of supply will drive metal prices even if China’s GDP
        slow s - Canonbury Group
        Metal-Pages, 11/10/10

        Infrastructure spending in China and a lack of supply will drive metal prices, even if China‘s GDP slows
        according to Dr. Phillipa Malmgren of the Canonbury Group.

        Speaking at the London Metal Exchange Metals Seminar in London today, she said that in order to
        expand its domestic market and reduce its reliance on export markets China was spending massively
        on infrastructure. In particular it was pushing urbanisation into western china and in satellite cities
        around the great conurbations of Beijing, Shanghai and Guangzhou.

        Plans are in place to expand the road and rail net work as well as to build 120 new airports over the next
        five years; all these projects will need a massive amount of metals and steel. ―This demand will continue
        to grow regardless of the growth in China‘s GDP,‖ she said. ―There is a structural demand for metals
        from China, even if demand from the developed economies slows,‖ she added.



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       10
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        In addition, she point ed out that supply not demand has been the key driver in the recovery of
        commodity prices, including metals, since the fall prompted by the global ec onomic crisis. ―We have
        seen prices rally at a time of falling demand and are wit nessing a supply side shock across both hard
        and soft commodities as the lack of investment in production over the last twenty years takes its toll,‖
        she said. ―This will continue whilst lending remains tight,‖ she added.


                                                                                             INDIA                                                                      back to index

        Essar to set up ferroalloy plant in Madhya Pradesh
        Metal-Pages, 25/10/10

        Essar Group chairman Shashi Ruia has said that the company will set up a ferro-alloy plant with an
        investment of INR3. 50 billion in Madhya Pradesh.

        Essar signed the deal for the project in Khajuraho.

        The plant will have a 100,000 tonnes a year (tpa) capacity and will meet the requirements for ferro -
        manganese and silico-manganese alloys at existing plants ln Hazira and Algoma.

        The plant will produce 50,000 tonnes a year of high carbon ferro-manganese alloy, and a similar
        amount of medium carbon silico-manganese alloy.

        Essar will also set up a power project at Singruli in Madhy a Pradesh with an investment in excess of
        INR80 billion.

        MOIL mulls INR 900 crore CAPEX plan over the next 3 to 4 yrs
        Steel Guru, 22/10/10

        BS reported that Indian public sector company Manganese Ore India Limited has taken up INR 900
        crore capital expenditure plan over the next 3 to 4 years.

        Mr KJ Singh CMD of MOIL said that "We plan to expand value added production capacity and to enter
        into joint ventures with Steel Authority of India Limited and Rashtriya Ispat Nigam Limited to set up
        ferroalloy plants in Chhattisgarh and Andhra Pradesh."

        He added that MOIL will invest INR 100 crore in SAIL JV and INR 50 crore in RINL JV, apart from INR
        768 crore in mining expansion over the next 3 to 4 years period.

        Mr Singh said that both 50:50 JVs with SAIL at Ch hattisgarh and RINL at Andhra Pradesh to set up
        ferroalloy plants will cost INR 392 crore and INR 206 crore, respectively. Both the plants will produce
        ferromanganese and silicomanganese in order to secure further potential sourc es of demand for our
        high grade manganese ore.

        He added that "We are committed to maintaining our leaders hip position in the Indian manganese ore
        market by increasing our production capacity in line with demand growt h, focusing on our value added
        product line to capture industry trends, controlling costs and strengthening relationships with our
        customers."

        Mr Singh said that the Indian steel industry is expected to continue to advance on a strong growth
        trajectory and the total installed domestic capacity is anticipated to be 121 m illion tonnes by 2011-2012.
        This is expected to result in continued demand for manganese ore.

        He added that "To meet rising demand, we plan to expand our manganese ore production capacity at
        our existing mines. We are looking at deepening of the productio n shaft at the Balaghat mine and
        Gumgaon mine and sinking of the vertical shaft at the Munsar mine. This will help in expansion as well
        as to sustain our production capacity for manganes e ore. We estimate that these projects would
        increase our total production capacity to 1.5 million tonnes by 2015. We have committed INR 49.81
        crore in capital expenditure in connection with these expansion projects."

  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       11
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        He said that MOIL also intends to add to its current reserves and resources by undert aking exploration
        in and around its existing lease areas. He added that " The company has applied for a prospecting
        license for mining in approximat ely 814.71 hectares in Maharashtra. In addition, it is engaged in
        ongoing exploration efforts in portions of our approximately 1,798.9 hectares of land already held under
        long term mining leases in relation to its existing mining complexes."

        He added that the company hopes to receive permission from Securities and Exchange Board of India
        for its proposed IPO shortly. The central gove rnment is divesting 10%, while Maharas htra and Madhya
        Pradesh state governments will be divesting 5% each.

        (Sourced from www.business-standard.com)

        MOIL scouting manganese ore mines overseas
        Daily News & Analysis, 21/10/ 10

        Manganese Ore India Ltd (MOIL), a miniratna public sector enterpris e, is scouting for manganese ore
        mines overseas and is planning to diversify into coal in India.

        ―Some players from manganese-rich countries have approached us and we are evaluating the offers,‖
        KJ Singh, chairman and managing director, MOIL.

        The company plans to venture int o coal in India to augment its asset base and use it for power
        generation in future.

        ―We are exploring some joint ventures for power and more ferroalloy production but nothing has been
        finalised so far,‖ said Singh.

        The company plans to hit the capital market with an initial public offer by November-end.

        Also, MOIL has been awarded 814.71 hectares (Ha) of land in Maharashtra for exploration of
        manganese ore.

        ―We cannot say anything about the reserves now, but we have applied for the prospecting licence and
        once we get the go-ahead we will start the prospecting work,‖ said KJ Singh, chairman and managing
        director, MOIL. He said the area is very large and the company expected good results from there.

        MOIL, the biggest manganes e ore company in India which accounts for half of country‘s manganese
        production, has 10 mines spread across an area of 1,798 Ha. It has 22 million tonnes (mt ) of proved
        reserves and 37.2 mt of measured mineral resources of ma nganese ore, taking its total reserves close
        to 60 mt.

        Manganese ore is used in steelmaking. The ore is melted at high temperatures to form an alloy of iron
        and manganese. Then t his alloy is fed to steel plants during production of steel. Last year the co mpany
        produced 1 mt and this year it is targeting 1.15 mt. Its average per tonne production cost is Rs3,200,
        one of the lowest in the world, he said.

        Indian market report - September iron ore exports drop 47%
        Metal-Pages, 21/10/10

        India‘s iron ore exports in September posted their sharpest mont hly drop in nearly two years because of
        a ban on shipments from a key state like Karnataka and slower demand from China.

        Exports from India declined 47% from a year earlier to 3.03 million tonnes in S eptember, the biggest fall
        since October 2008, data from the Federation of Indian Mineral Industries (FIMI) showed on
        Wednesday. In terms of volume, it was the lowest since at least April 2007.

        MANGA NESE ORE
        Indian manganese ore prices have declined this week as demand became weak in the Indian market.


  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       12
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        As predicted by a local trader last week and report ed by Metal-Pages, the manganese ore 40% price
        declined to INR13,600-14,000/tonne ($307-316/tonne) this week from INR14,000-14,500/tonne ($316-
        327/tonne) last week.

        A miner said that he felt the market was becoming weak and he had had reduced his offer price by
        almost INR200/tonne but he had not had any business so far at his price of INR13,750/tonne
        ($310/tonne). He explained that the demand from end-us ers is really weak as they cannot accept the
        high prices. If the demand remains sluggish, the price will go down furt her.

        Govt looks to 'steel' show with MOIL, SAIL issue s
        Economic Times, 21/10/10

        KOLKA TA: The steel ministry is gearing up for two public issues scheduled over the next few months.
        These have been cleared by the government as part of its Rs 40,000 -crore privatisation programme.
        While Manganese Ore India (MOIL) will open later this month, the follow-on public offer of SA IL is likely
        to hit the market only around January next year.

        Roadshows for MOIL are tipped to begin in November and the issue is likely to hit the market early
        December, said Department of Disinvestment secretary Sumit Bose. ―By December-end, we are likely
        to mop up nearly Rs 20,000 crore or roughly half the target amount of Rs 40,000 crore earmarked for
        the current fiscal,‖ said Mr Bos e.

        While a bulk of the mop-up during this period is likely to come from the Coal India IPO , revenue from
        the MOIL stake sale is estimated to be Rs 3,000-4,000 crore. ―The Manganese Ore issue is significant
        though it will be a relatively small one,‖ said Mr Bose.

        The Centre expects to raise close to Rs 1,500 crore from the issue, with the two state governments of
        Madhya P radesh and Maharasht ra — both stakeholders of MOIL — getting Rs 750 crore each. No
        fresh equity will be raised from the divestment. In the MOIL issue, the central government will sell a
        10% stake while Madhy a Pradesh and Maharashtra governments will dilute 5% stake each.

        Currently, the Centre owns 81.57% in the company while Maharashtra and Madhya Pradesh have
        9.62% and 8.81% stakes, respectively. Incidentally, it will also be the first IPO where the Union
        government, along with two state governments, will divest sake.

        MOIL had filed draft papers for its IPO last month with Sebi. The four -day IPO of MOIL is likely to begin
        in the last week of November-early December. Edelweiss Capital , IDBI Capit al and JP Morgan are the
        book running lead managers to the issue. As the country‘s only producer of manganese ore, a key
        steel-making input, the Nagpur-based MOIL is gearing up to raise capacity in keeping with the planned
        hike in steel capacity in the country.

        CARE assi gns CARE IPO GRADE 5 to IPO of MOIL
        India Infoline News Service, 15/10/10

        The assigned grading reflects MOIL‘s dominant position in the Indian manganese ore industry with over
        four decades of experience in manganese mining and its significant reserves of measured mineral
        resources of manganese ore.

        CARE assigns ‗CA RE IP O GRADE 5‘ grading to the IPO of MOIL Limited. The assigned grading
        reflects MOIL‘s dominant position in the Indian manganese ore industry with over four decades of
        experience in manganese mining and its significant reserves of measured mineral resourc es of
        manganese ore. MOIL is currently a market leader in domestic manganes e ore market commanding
        around 50% of the domestic market share.

        MOIL‘s strong parentage, with a ‗mini-ratna‘ public sector company status which provides it with
        functional autonomy, the company‘s healthy operational performance backed by high profit margins, a
        strong financial position with cash balanc es of about Rs. 1,500 crore, and a zero debt status are factors
        which add furt her strength to the grading. The company‘s current operational and fi nancial position
        provides MOIL with flexibility to fund its on-going and planned expansion projects.


  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       13
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        Indian market report - Hope s for market revival post-Diwali, Commonwealth games
        Metal-Pages, 14/10/10

        Talk of improved demand and a price hike in steel markets in October now seem like old news as the
        market has now weakened and prices have start ed to ret reat, say insiders.

        The price correction reflects weak demand in India and higher inventories. But all is not lost as
        predictions of a post-Diwali revival are doing the rounds.

        Markets are expected to pick up after the holiday as construction activity gains momentum. The end of
        the Commonwealth Games is also likely to ease logistical bottlenecks, leading to a rise in demand, say
        experts.

        MANGA NESE ORE

        The Indian manganese ore market has not seen any change in prices even t hough alloy prices have
        risen in the past two weeks. The mainstream price of manganes e ore 40% is in the range of INR14000 -
        14500/tonne. A manganese miner said he had sold around 400 tonnes last week at INR 14250/ tonne
        for 40% material.

        A manganese mine in India, which produces 1,500 tonnes a month, offered INR14,300/tonne ex mines
        for manganese ore 40%, the same as last week. An executive at the mine said that domestic prices
        were seen as high in present market conditions, and many traders were now importing ore from abroad.
        Miners, however cannot lower their prices as production costs remain high, he said.

        Another local trader said that demand had not improved greatly and strong pri ces were not helping
        either. In his opinion, if the market remained sluggish, prices will fall in coming weeks.

        Targeting about 50% top line growth this year: GD Mundra, Director, Sarda Energy
        Economic Times, 13/10/10

        In a chat with ET Now, GD Mundra, Director, Sarda Energy, talks about his company‘s prospects.
        Excerpts:

        You have captive coalmines. The way Coal India has been priced about 7 times EV/EBIDTA based on
        earning estimates of FY12, do you think that companies lik e Sarda Energy which have coal or coal
        captive mines, these stock s will get re -rat ed?

        That way all the companies having the coal minerals properties will be having a positive impact on their
        valuations because Coal India will give a benchmark evaluation figure on the basis of which the investor
        and analysts will be able to value the coal mineral properties. So this will have a positive impact on all
        the properties.

        What is the total power capacity that you currently have?

        We currently have 61 megawatt power capacities.

        If you could give us more details of the power venture that you have planned to the tune of about 350
        megawatt?

        Yes, 350 megawatt we are planning to set up at our coalmine at Raigarh, for which we have already
        applied to the government and we expect to get the consent established soon because the public
        hearing has already been taken place successfully. Then we have one more MoU route independent
        power plant that is 1320 megawatt. They are setting up in the state of Chhattisgarh itself. Then we have
        hydropower clean energy space that is about 230 megawatt. Out of 1 power plant is already turning in
        Uttaranchal.



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       14
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        So this 350 megawatt, is it for captive purposes or would you also be selling some on merchant...?

        It basically will be captive power plant, but the captive power policy permits to sale about 49% of the
        total generations. So the surplus power if any we will be selling, but it will basically be for captive use.

        What are the average merchant power rates in Chhattisgarh and in the state of Raipur?

        It varies on the day to day basis, but currently it is around Rs 2 to Rs 3.

        That ’s it? The merchant power prices have come down because when we spok e to JSW Energy 2
        week s ago, they said that merchant power prices are at Rs 5. How come you have such a low
        realisation?

        That may be depending on what tenure you are entering into the agreement. What they had is not
        giving that much and if you are giving peak hours, then power tariffs will be quite more.

        This question is about the quality of Indian coal. You are a consumer here. Is the Indian coal which is
        present in India, the thermal coal is of inferior quality and power companies like yours say would
        actually be forced to import coal?

        No, what coal properties we have that is a power grade coal and if it is to be upgraded, we are already
        setting up t he washery to upgrade the power and once you upgrade the power, even it becomes C and
        B category...

        What are your full year targets for your profits and revenues ?

        In top line we are targeting growth of about 50% this year and then 30% to 40% for the subsequent
        year, and we are ex pecting to meet our EB ITDA margin about 25% to 30%.

        MOIL IPO dates advanced; pre -road shows from Oct 21
        PTI, 13/10/10

        The government is likely to advance the IPO of Manganese Ore India to November 26 to realign a
        series of initial offers by PSUs which will follow the mammoth share sale of Coal India, an official said.
        "The dates have been advanced to November 26 while realigning schedules of public offers of other
        companies like Power Grid, Hindustan Copper etc. The pre-roadshow for MOIL would commenc e from
        October 21," a government official told P TI, on condition of anonymity.

        The share sale was originally scheduled to open on November 29.

        The roadshows will commence in Mumbai on Octob er 21. A team comprising officials from MOIL, the
        Department of Disinvestment and the Ministry of Steel will leave on 24th for Singapore, the official said.

        Last month, MOIL had filed draft papers with market regulator SEBI for its intial public offer (IP O).
        Nagpur-based public sector miner will see a total disinvestment of 20 per cent -- the Centre will offload
        its 10 per cent stake, while Madhya Pradesh and Maharashtra governments will dilute 5 per cent eac h.
        At present, the Centre holds 81.57 per cent in the company, Maharashtra 9.62 per cent and Madhya
        Pradesh 8.81 per cent stake.

        Post IPO, Centre''s equity in MOIL will come down to 71.57 per cent, while that of the Maharashtra
        government will reduce to 4.62 per cent. Madhya Pradesh government will be l eft with 3.81 per cent
        share in the company.

        It is not yet clear how much amount the share sale would generate. Analysts, however, said it could be
        in the range of Rs 3,000-4,000 crore.

        Earlier in Sept ember, the Cabinet Committee on Economic Affairs (CCE A) had cleared the stake sale
        proposal by the state-run firm.



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       15
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        Edelweiss Capit al, IDBI Capital and JP Morgan are the book running lead manager to the issue,
        sources said.

        Manganese Ore operates 10 mines, six of which are locat ed in Nagpur and Bhandara dis tricts in
        Maharashtra, and four in B alaghat district of MP. It had a net profit of Rs 240 crore in 2009-10, while its
        net worth stood at Rs 1,587 crore.

        The government aims to raise Rs 40,000 crore through divestment this fiscal. The ot her disinvestment
        candidates for FY10 include Coal India, MMTC, and Hindustan Copper, this fiscal. Last fiscal it had
        raised Rs 25,000 crore through stake sale in Oil India, NMDC, REC and NTPC.

        Indian market report – India forecast to become world’s third largest steel consumer
        Metal-Pages, 12/10/10

        Stronger than ex pected increas es in steel demand in E urope, Japan and t he former Soviet Union are
        propelling the global steel industry to a robust recovery this year, according to forecasts released by the
        World Steel Association. The association – the main trade body for the sector – said on Monday that
        global consumption of the alloy would increase by 13.1% in 2010 to a rec ord level, above the forecast of
        10.7% made in April.

        Next year demand for all grades of steel – the most widely used industrial material, which goes into a
        range of sectors from c ars to toy manufacturing – is likely to rise by a more modest 5.3% t o reach a
        fresh record of 1.34 billion tonnes.

        India is expected to see its use of steel expand 8.2% in 2010 an d 13. 6% in 2011. In this event, India will
        become the world‘s third largest steel consuming nations next year, after China and the US, according
        to the Financial Times.

        SILICO-MA NGA NESE
        Indian silico-manganese prices are rising according to market sources and reports of improved demand
        have been confirmed by traders. The mainstream price for silico-manganes e 65/16 has increas ed to
        $1,390-1,410/tonne FOB India from $1, 380 -1,400/tonne FOB India last week.

        Demand is good said a trader but he also commented that he had not done any deals this week. He
        said that enquiries from foreign buyers were pouring in and they had signed some orders last week, but
        this week the price has climbed up again and so we will have to drive a hard bargain.

        The appreciation of Indian rupee and higher production costs have pus hed up prices according to the
        general market conception. An exporter in Mumbai said that he hoped the market would increase
        further and prices would go as high as $1,450/ tonne in the coming weeks.

        FERRO-MA NGA NESE
        Indian ferro-manganese prices are stable this week with reports of improved demand. A source said he
        sold around 200 tonnes of material at INR58,000/tonne ($1,296/tonne). He added that he was optimistic
        about the market this week and as the Indian rupee was strengthening against the dollar, export prices
        were going up.

        A trader who holds 600 tonnes of material said he was in no hurry to sell since demand was good and
        would stay so for some time. He did not wish to sell cheaply as his buying costs were high and he was
        keen to make some profit. He said that he would keep his prices firm.

        FERRO-S ILICON
        Indian ferro-silicon prices remain steady at present, in a stable market. Domestic price for 70 -75%
        material are INR56,000-58,000/tonne ($1,252-1,296/tonne). Traders however say that that prefer to
        import from Russia instead of China as prices are more competitive.

        India imported around 1,804 tonnes of ferro-silicon from China in August valued at $21,041 according to
        Indian government data. India currently imports the material from China at $1,320/tonne CIF for 75%
        material.


  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       16
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        SAIL mulls steel plant in Rajasthan
        Metal-Pages, 11/10/10

        India's biggest state-owned steelmaker, Steel Authority of India (SAIL), is looking at the possibility of
        setting up a 2 million tonne per annum (mtpa) greenfield plant wit h an investment of INR100 billion
        ($2.25 billion) at Bhilwara in Rajasthan. Preliminary meetings have already been conducted between
        representatives of the state government, SAIL and the Union Steel Ministry.

        The company has started the ground survey to study the viability of the project and if it works then the
        company plans to set up a 2 million tonnes t steel plant on the site.

        Discovery of around 500 million tonnes of iron ore was notified in Bhi lwara in 1967. Not many
        companies have come forward mainly because the ore that had been discovered in this area is of
        magnetite grade and would yield just about 30 -35% recovery. Sources say that in order to draw higher
        interest from SAIL, which has put a target of doubling its capacity in the next four years, the Rajasthan
        government has also assured linkages to limestone from Jaisalmer and dolomite from Jodhpur.

        While SAIL is in the process of conducting ground surveys in Bhilwara, it is the Rajasthan go vernment
        that seems to be really lobbying hard for t he project. A final call will, however, be t aken by SAIL only
        after it gets positive feedback from the survey that is underway.

        Indian ferro-manganese market stable
        Metal-Pages, 11/10/10

        The Indian ferro-manganese market looks stable at present and export prices are steady. Export prices
        are in the range of $1,370-1,400/tonne, due to the appreciation of the Indian rupee.

        An Indian produc er wit h 1,000 tonne monthly capacity offered material at $1,380-1,400/tonne FOB India
        and sold 200tonne last week. The source disclosed that many exporters raised their prices due to the
        appreciation of the rupee.

        ―I am optimistic about the future market, so I think the market will keep moving up in the coming weeks,‖
        said a source. He added that he sold a small parcel of the material at $1,380 -1,370/tonne FOB India on
        Thurs day. His buyers wanted a better price but ultimately they agreed as production costs in India are
        high and selling lower than this is not acceptable.

        ―We are under no pressure to sell the material as the demand is good, so we will keep our prices at the
        current level,‖ he stated.

        India sends first ROV to ocean bed for mineral exploration
        Metal-Pages, 11/10/10

        India has deployed its first remotely operated unmanned submarine (ROV ) in the Central Indian Ocean
        Basin for observation and exploration of mineral wealt h. The ROV has been developed by National
        Institute of Ocean Tec hnology (NIOT) in association with Russia-based Experimental Design Bureau of
        Oceanological Engineering (EDBOE ).

        The ROV will study polymetallic nodules, a rich source of iron and manganese hydroxides. The study
        will take place at the depth of around 6,000 metres. The Indian ROV is operational at the Poly -Metallic
        Nodule (PMN) site that has been allotted to the country by the International Sea B ed Authority (ISBA) of
        United Nations

        "This is a huge feat for India. It means that we are one of the very few nations with this capability apart
        from United States, France, Japan, Russia and possibly China," NIOT director Atmanand was quoted
        by Press Trust of India (P TI).




  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       17
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        The total resourc es estimated are of the order of 380 million tonnes and for this, remot ely operated
        vehicles are the key for observations and exploration of mineral wealt h, a study by the Chennai-based
        NIOT indicat es.

        Polymetallic nodules, also called manganese nodules, are rock concretions on the sea bottom formed
        of concentric layers of iron and manganese hydroxides around a core.

        The ROV is stationed and launched from on-board one of India's key Ocean Res earc h Vessel 'Sagar
        Nidhi 1', a state-of-the-art research vessel with dynamic positioning capabilities.

        OMDC to expand and become mining giant
        Metal-Pages, 08/10/10

        Orissa Minerals Development Company (OMDC) is set t o enter the big league of mining giants in the
        country. The company has access to almost 206 million tonnes of iron ore reserves and 44 million
        tonnes (Ha) of manganese ore reserves spread across six mines aggregating 4,365.262 hectares in
        Barbil of Orissa‘s Keonjhar district.

        It is set to see its biggest mines, the Thakurani iron and manganese mines, covering 1,546.55 Ha,
        become operational again according to daily news and analysts reports.

        ―The mine will be operational by this month -end with an annualised production capacity of 300,000
        tonne per annum. We have also applied for the enhancement of production of the mine to three million
        tonnes, which is in the final stages of clearance,‖ Satish Chandra, Chairman and Managing Director,
        OMDC told the press.

        Another iron and manganese mine, Kolha Roida, with an area of 254.952 Ha, is also expected to start
        production by this year-end.

        ―It is currently under litigation and we expect production can begin within the next mont h,‖ Chandra said,
        adding, that the company is looking at mining close to 100,000 tonne per month from the mine once it is
        operational. According to Chandra, the total production this year will not be too high as six months are
        already past and it expects total production by March -end to be close to last year‘s figure.

        However, production could increase significantly next year. OMDC produced a total of 564,000 tonnes
        of iron ore and 17,000 tonnes of manganese ore in the year ended March, 2010. It also posted record
        sales of 60,000 tonnes of sponge iron last fiscal.

        The company‘s other iron and manganese mining leases are Belkundi (1, 276. 77 Ha), Bhadrasai
        (998.70 Ha), Dalki (266.77 Ha) and B agiaburu (21.52 Ha). Almost all of the c ompany‘s mines are either
        operating below pot ential or have seen work stopped due to the expiry of mining leases and pending
        applications for enhanc ement of operations.

        ―The bank guarantee had been submitted by OMDC to Indian Bureau of Mines (IBM) towards mines
        closure plans for getting the mining plan approved in respect of Thakurani and Bagiaburu Mines. IBM
        has approved mining plan of Bagiaburu and approval for Thakurani is yet to come,‖ Rahul Sonthalia and
        Karan Sharma, analysts at Kolkata-based Kredent Research Advisors, wrot e in a report dated
        September 28, 2010.

        At its annual general meeting held in September end, Chandra had said that OMDC plans to increase
        its iron ore production to 10 million tonnes per annum (mtpa) and manganes e ore production to 1 mtpa
        by 2014-15. It is also investing INR10 billion to set up a 2 mtpa pelletisation plant and a 2 mt pa iron ore
        beneficiation plant at Thakurani.

        ―We are also looking at diversification into ot her mining activities overseas, spread across assets such
        as gold, diamond and coal, besides looking at assets in other mineral assets in the country, but that will
        only happen after we consolidate our position in iron ore,‖ Chandra said.




  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       18
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        MMTC to export 20,000 tonne s of manganese ore
        Metal-Pages, 08/10/10

        Indian state-run trading firm MMTC has tendered to export 20,000 tonnes of manganese ore for
        shipment in the current quarter.

        The last date for submission of bids is October 13, the company said on its website this week.


                                                                                         OCEANIA                                                                        back to index

        Australian manganese mines face cyclone threat
        Metal-Pages, 21/10/10

        Australia faces almost double t he number of destructive tropical cyclones, possibly as many as 22,
        across manganese and iron ore production areas in the 2010/11 cyclone season, according to the
        Australian weat her bureau this week.

        The above-average cyclone numbers are as a result of a strong La Nina weather system which brings
        more rain and more storms above the western Pacific, the Bureau of Meteorology said in its annual
        cyclone-season outlook released this week.

        The sparsely populated Pilbara region in the northwest is home to scores of iron ore, manganese and
        nickel mines.
        Rio Tinto and BHP Billiton are the two biggest miners in the area, then Fortescue Metals Group and a
        few other miners.

        ―For the full Australian region, there is a high degree of confidenc e that the total number of tropical
        cyclones will be above average,‖ it said (www.bom.gov.au/climate/ahead/tc.shtml).

        ―The forecast values (or number of cyclones)...20 -22 are significantly higher than the long -term average
        value of 12.‖

        In March this year BHP Billiton shut down its Groote Eylandt manganese mine in the Nort hern Territ ory
        of Australia for about a week due to a tropical cyclone threat.

        The Groote Eylandt Mining Company (Gemco), 60% -owned by BHP and 40% by South Africa's Anglo
        American, produces more than 3.8 million tonnes annually, or about a quarter of the world's annual total
        production.

        However, the biggest increase in cyclones is expected off the northwest of Australia, with 11 -12
        cyclones, compared with an average of seven. Australia's giant Port Hedland iron ore terminal is on the
        Pilbara coast and shuts down and orders berthed ships to safe harbours if a cyclone threatens.

        OMH says manganese output hits record
        Mining Week ly, 21/10/10

        AS X-listed minerals group OM Holdings (OMH) on Thursday reported record manganese and alloy
        production for the quarter ended September.

        Manganese production from the Bootu Creek project, in the Nort hern Territory, increased by 16% during
        the September quarter, reaching 227 968 t, compared wit h the June quarter.

        During the month of Sept ember, OMH also rec orded record production of 86 867 t of manganes e from
        the Bootu Creek project. This was up by 12% from the record set during the month of June.

        OMH said in its quarterly report that the mine-scheduled improvements at the Bootu Creek project
        allowed forthe consistent delivery of higher -grade material to the processing plant, allowing the plant to
        benefit from expected mass yields and metal recoveries.

  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       19
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        Improved plant availability also allowed for extended periods of plant uptime and operating efficiencies,
        which translated to record scrubber feed rates for the quarter.

        Meanwhile, alloy production from the Qinzhou smelter, in China, was also achieved during the quarte r
        under review, with OMH reporting 17 271 t of high carbon ferromanganese alloy. This was compared
        with the 9 958 t recorded during the June quarter.

        Higher s ales of the ferromanganese were also achieved, with an increase of 40% quart er-on-quarter,
        and 42% year-on-year. OMH said that the sales figures were underpinned by strengthening demand
        and alloy restocking by the major steel companies.

        The company noted, however, that in line with the Chinese government‘s efforts to achieve its carbon
        emissions target by the end of 2010, the Guangxi government has imposed various restrictions on the
        supply of industrial power to the region.

        While there was no guarantee of continuous, uninterrupted power supply for the full fourth quarter, the
        company was continuing its discussions with the authorities in an effort to decrease any impact on its
        sinter and alloy production.

        In the event of a power shortage, OMH would bring forward its planned furnace reline and scheduled
        maintenance activities to maximise the total production capacity once the power supply issues were
        resolved.

        Meanwhile, the miner stated that in 2011, it was forecast that world steel demand would grow by 5,3%
        to reach a record of 1,3-billion tons. It was also estimated that Chinese crude steel produc tion would
        reach 640-million tons during 2010, and OMH noted that China would need to import about 11 -million
        tons of manganese ore to support this growth.

        The December quart er manganese alloy prices were expected to be strong, owing to the short -term
        power supply shortage, which will res ult in regional alloy production issues.

        The company noted t hat it had adequate supply of high-c arbon ferromanganese and was well placed to
        respond to a tightening supply situation and to maintain supply to its long-term customers.

        OM Holdings, ConsMin end tie -up talks
        AAP

        OM Holdings Ltd says talks about a potential transaction with fellow manganese miner, Ukraine -owned
        Cons olidated Minerals Ltd, have ended.

        The companies in April entered into a confidentiality agreement regarding OM Holdings seeking to
        acquire an interest in Consolidated Minerals' Woodie Woodie manganese mine in Western Australia's
        Pilbara region.

        OM Holdings, which operat es the Bootu Creek manganes e mine in the Nort hern Territory, said on
        Wednesday that it had completed due diligence on Woodie Woodie but no formal transaction
        opportunity was being progressed.

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        This was "due to difficulties identifying a mutually suitable transaction structure", OM said in a
        statement.

        OM said in April that a tie-up of the companies would have created "the world's second largest low -
        phosphorous siliceous high-grade manganese ore producer".

        OM also on Wednesday said that it had produced a record 227, 968 tonnes of manganese at Bootu
        Creek in the September quarter, up 16 per cent from the June quarter.



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       20
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        It also said it was conducting a feasibility study into establishing an integrated low-cost alloy production
        centre in South East Asia to support the growing Asian steel industry and had submitted an application
        for a smelting plant in Malaysia.

        Shares in OM closed up four cents, or 2.35 per cent, at $1.70.

        Australia manganese miner OM Holding's Q3 output up 16% on quarter
        Platts 13/10/10

        Australian-listed OM Holding's said Wednesday its flagship Bootu Creek mine in the country's Northern
        Territ ory produc ed 227,968 mt of manganese in the three months to September 30, up 16% on the
        June quarter and 11% year on year.

        The company, which also operates as a commodity trading house in Singapore, attributed the increase
        to mine schedule improvements that resulted in a rise in both yield and met al recovery, and forecast a
        further increase to 250,000 mt in t he December quarter when higher grade ores were due to be
        accessed.

        OMH forecast producing 850,000 mt in calendar 2010, up 31% year on year, and in line with guidance
        in the June quarter report. A total 588,315 mt of ore was mined at Bootu in the September quarter to
        produce 154,991 mt of lump, 43,126 mt of fines and 29,851 mt of SPP fines, the company said.

        The September quart er production details were contained in a presentation to an investor briefing by
        company CE O Peter Toth at the Bootu Creek mine site, which was filed to the Australian Securities
        Exchange. The cash cost of production in the September quarter came in at A$4.29/dry mt, down 10%
        from A$4.74/dmt in the June quarter, when operations were impacted by unseasonal wet weather and
        mine scheduling issues caused by the startup of new pits and t he mobilization of a third mining fle et.
        Cash costs in the September 2009 quarter was A$3. 80/dmt.

        The company noted the cash cost fell to A $.391/dmt in S eptember and forecast average cas h costs for
        the December quarter at A$4/dmt as the volume of production increases and access to high grade ore
        becomes easier after optimization work underway at the Shekuma pit is completed.

        The Boot u Creek mine has the capacity to produce 1 million mt/year of manganese product, while the
        project's tenements span 3,325 sq km. OMH's wholly owned Qinzhou smelt er in Guangxi province
        China produced 17,719 mt of alloy in the September quarter, up 77% from 9,958 mt in the June quarter,
        as both furnaces operat ed at full capacity.

        The smelter's sinter plant, which was commissioned in March, produced 48,625 mt of sinter ore in the
        September quarter, compared with 34,352 mt in the June quarter during its optimization phase. The
        300,000 mt/year plant is now running at its budgeted c apacity of 200,000 mt/year while planning
        continued on a planned phase two expansion to 600, 000 mt/year in 2011, OMH said.

        However, the company said interruptions of both alloy and sinter production were expected in the
        December quarter due t o power supply restrictions in Guangxi province. OMH said its full S eptember
        quarter production report is due for release by October 22.

        Shaw River announces drilling results at Baramine Project
        Steel Guru, 12/10/10

        Australian manganese explorer Shaw River Resources has announced furt her results from the recently
        completed 10,000 meter drilling program at its 70% owned Baramine Project. The drilling is targeting
        manganese mineralization similar to that at the world class Woodie Woodie deposits.

        Shaw River will use the latest drilling results to define resources and begin to evaluate the economics of
        producing high grade (+40%Mn) manganese products through simple mechanical beneficiation.
        Beneficiation of manganese ores is common practice globally and results in high value products for
        sale. A 40% Mn product currently carries an approximat e in situ market value of US D 240 per tonne.



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       21
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        Using these conservative prices, each 100,000 tonnes of 40% Mn product can be valued at
        approximately US D 24, 000, 000 in situ.

        Mr Vincent Algar MD of Shaw River said that "We are delight ed by the results being received from the
        recently completed drill program at Baramine. The cumulative effect of drilling more holes are adding
        constantly to our understanding of the geology and bearing fruit at Baramine. We are well on our way to
        defining initial resources suitable for beneficiation to saleable, highly valuable manganese products as
        we continue to expand the target areas and potential of the project."

        Shaw River is targeting an initial manganese resource which will pave the way for a long -life mining
        operation at Baramine. Activity over the coming months will provide investors with regular news flow
        and will include:

        1. Having reported on exciting intersections at Nells, Area 3 in September, Shaw River has added to
        this extensions of the known Area 4 mineralisation, and new disc overies at Beebie. Big Mn and Area 4
        South

        2. Further exciting results are expected from Area 5 and additional holes at Area 3 and Nells in October
        2010

        3. Beneficiation test results from RC holes in Area 3 and Nells are expected in October and will assi st
        with ore body modeling activity

        4. Exploration Targets on key pros pects will be released on receipt and analysis of all RC drilling res ults

        5. A 1,000 meter diamond drilling program for manganese ore characterization and beneficiation testing
        will commence onc e all results have been received results from testing will likely be rec eived towards
        the end of December 2010

        6. Co incident with diamond drilling, initial Inferred resources will be calculated at key prospects at
        Baramine, expected before end of December 2010

        6. Follow up drilling throughout 2011

        7. The outcome of preliminary economic scoping studies will be released in early2011

        8. Heritage, environmental and mining application processes will commenc e in early 2011


                                                                                          EUROPE                                                                        back to index

        EU zero duty initiative spreads to Zn, Mo, Cr, FeMn
        Metal Bulletin, 22/10/10

        A proposal by EU member states to suspend import duties on 27 materials has been extended to
        include 92 products including unwrought zinc, molybdenum, unwrought chromium and ferro -
        manganese.

        The cont roversial initiative was launched by Italy's non-ferrous metal federation Assomet and was taken
        up by the Italian government, resulting in a list of 27 materials, including aluminium, ferro-molybdenum
        and ferro-silicon in April this year.

        It provok ed a furious reaction from ferro-alloys producer body Euroalliages, which described it as "a
        distorted implementation of the so -called raw materials initiative."

        Assomet admitted that its members held di ffering views on the proposal.

        The European Commission is examining the pot ential impact of the zero duty move but no date has
        been set for the presentation of the final proposal, according to the Minor Metals Trade Assn (MMTA).

  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       22
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        ―The Commission has engaged in lengthy discussions with E U Member States with a view to expanding
        the list. As a result, the list of raw materials reviewed for suspension of tariffs now counts 92 products
        and contains [...] metals, including zinc,‖ Arnoud Willems, partner at Sidley Austin law firm and a
        member of the MMTA Trade & Lobby sub-committee, told MB.

        ―My feeling is that it will succeed but not for all products, some are just too sensitive. The time frame is
        difficult to predict but I don‘t expect this before Christmas, ‖ Willems told MB.

        The MMTA is advising members affected by the initiative to contact the representatives of their member
        states.

        Some products could see a reduction of up to 8% of their value, it told members.

        ―It is still uncertain at this point wh ether the Commission‘s list of 92 products will garner sufficient
        support from Member States. Indeed, several EU Member States such as Italy, Czech Republic and
        Sweden have so far voiced their support for the Commission‘s duty suspension initiative,‖ the M MTA
        said.

        ―They find this a creative way to assist EU added value manufacturing. However, other countries such
        as France, Germany and Spain either oppose the initiative completely, or have expressed concerns
        relating to their national industries,‖ it continued.

        ―The dividing line on Member States? positions exists mostly between producing- and non-producing
        countries,‖ it added.

        Import duties on aluminium were reduc ed by 50% in 2007, following a similar lobby by the Italian
        government.

        The list also includes tungsten, unwrought magnesium, ferro-silico-magnesium, ferro-vanadium and
        non-alloy ed pig iron.


                                                                                                CIS                                                                     back to index

        Ukraine urges US to revi se AD duty on ferrosilicon manganese
        Steel Guru, 21/10/10

        It is reported that Ukraine's ferroalloy makers have requested the US to revise 163% of anti dumping
        duty on ferrosilicon manganese.

        The Association of Uk rainian Ferroalloy Producers indicated that those Ukrainian makers who run in the
        free market didn‘t ' enjoy any benefits.

        At present, there are markers from more than three countries supply ferrosilicon manganese to the
        Ukraine' market. Thus, the domestic makers are forced to look for the overs eas market.

        It is known that the 163% of anti dumping duty was impos ed on Ukraine's Nikopol Ferroalloy Plant and
        Zaporizhia Ferroalloy Plant, executed from 1994 until September 2011.

        (Sourced from YIEH.corp)

        Ukrainian ferroalloy output in 9 months up by 57pct YoY
        Steel guru, 15/10/10

        According to the Association of Ukr ainian Ferroalloy Producers, in January to September this year
        Ukraine increased its ferroalloys production by 57%YoY to 1.068 million tonnes.




  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       23
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        Accordingly, during the first nine months of t his year, Ukraine silicomanganese output increased by
        42%YoY to 699,700 tonnes, ferromanganese production went up by 2.8 times to 214,600 tonnes,
        ferrosilicon output increased by 43% YoY to 144,100 tonnes while its metallic manganese production
        went down by 1.8% YoY to 10,800 tonnes.

        Specifically, in January to September this year, the largest Ukrainian ferroalloy producer Nikopol
        Ferroalloy Plant inc reas ed its ferroalloy output by 57%YoY to 691,500 tonnes including 528, 800 tonnes
        of silicomanganese and 162,700 tonnes of ferromanganese.

        During the period in question, Ukrainian ferroalloy producer Zaporozhye Ferro Alloys Plant increased its
        ferroalloy output by 52%YoY to 215, 400 t onnes including 109,400 tonnes of silicomanganese, 51,900
        tonnes of ferromanganese, 43,200 tonnes of ferrosilicon and 10,800 tonnes of metallic manganese.

        (Sourced from Steelorbis.com)

        Ukrainian ferroalloy output increase s by 57 percent in Jan-Sept
        Steel Guru, 11/10/10

        According to the Association of Ukrainian Ferroalloy Producers (UkrFA), in January -S eptember this
        year Ukraine increased its ferroalloys production by 57 percent compared to the same period last year
        to 1.068 million mt.

        Accordingly, during the first nine months of this year, Ukraine's silicomanganese output inc reased by 42
        percent to 699,700 mt, its ferromanganese production went up by 2. 8 times to 214,600 mt, its
        ferrosilicon output increased by 43 percent to 144,100 mt, while its metallic manganese production went
        down by 1.8 percent to 10, 800 mt, all compared to the same period of 2009.

        Specifically, in January-S eptember this year, the largest Ukrainian ferroalloy producer Nikopol
        Ferroalloy Plant increased its ferroalloy output by 57 percent year on year to 691, 500 mt, including
        528,800 mt of silicomanganese and 162,700 mt of ferromanganese.

        Meanwhile, during the period in question, Ukrainian ferroalloy producer Zaporozhy e Ferro Alloys Plant
        increased its ferroalloy output by 52 percent year on year to 215,400 mt, including 109,400 mt of
        silicomanganese, 51,900 mt of ferromanganese, 43,200 mt of ferrosilicon and 10,800 mt of metallic
        manganese.

        In addition, anot her major Ukrainian ferroalloy producer Stakhanov Ferroalloy Plant increased its
        January-September ferroalloy output by about 62.4 percent year on year to 162,400 mt, including
        100,900 mt of ferrosilicon and 61,500 mt of silicomanganese.


                                                                         AFRICA & MIDDLE EAST                                                                           back to index

        Exxaro Partners With Assmang On Its AlloyStream Technology
        Dow Jones Commodities News, 25/10/10

        South Africa's Exxaro Resources Ltd. said Monday it is partnering with Assmang Ltd. to commercialize
        its AlloyStream technology, which allows for the beneficiation of manganese ore into high carbon
        ferromanganese.

        MAIN FA CTS:

        - The immediate focus will be to work toward the commissioning of an upgraded and larger
        demonstration facility in Pretoria in 2012 and to conduct an accurate assessment of the technology's
        viability on a commercial scale over the next three years.

        - Depending on the successful demonstration of this technology the parties will then decide on th e
        future exploitation, to beneficiate manganese ores which are currently not beneficiated.


  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       24
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        - Exxaro says the major benefits of the AlloyStream technology include significantly lower electrical
        consumption and the use of unagglomerated fine feed materials, as well as the fact that lower quality
        coal can be used as a reductant.

        Gabon, CITIC to mine 26 mln T manganese resource
        Reut ers, 23/10/ 10

        Gabon and Chinese mining enterprise CITIC Dameng, a unit of CITIC Resources Holdings, should mine
        over 26 million tonnes of manganes e from their M'Bembele mine over the next 25 years, the two sides
        said.

        The operation, whose start-up date has not yet been confirmed but was inked this week in Gabon,
        comes ahead of a planned separate listing for CITIC Dameng on the main board in Hong Kong.

        Gabon, the number No. 2 producer of manganese, is seeking to boost its output of the metal, used in
        steel and aluminium alloys, as part of a drive to diversify its economy away from dependence on oil and
        Frenc h firms.

        Zhang Longzhu, vice president of CICMHZ, the local company created to run the M'Bembele operation
        in Gabon's Moyen-Ogooue province, said that reserves were estimated at "over 26 million tonnes".

        Julien Nkoghe Bekale, Gabon's minister of mines, said 40 billion CFA would be invested in the project
        and production would start at around 800,000 tonnes per year and peak at just over 1 million tonnes for
        about 25 years.

        Neither official gave a start-up date for the operation.

        Gabon's manganese output slumped t o around 2.2 million t onnes in 2009 due to falling demand after
        hitting 3.1 million tonnes.

        Mining accounts for a small percentage of Gabon's economy, but President Ali Bongo is seeking to
        boost the sector as his country's oil reserves start winding down.

        Bongo is also actively seeking investment from firms outside France, the former colonial power that has
        long-enjoyed a strong influence in the Central A frican nation.

        Gabon is due to buy a greater stake in Comilog, another manganese operation Gabon has with Eramet,
        Eramet said earlier this month.

        Chinese company to run Gabon manganese mine
        ANP/AFP, 21/10/10

        A Chinese company will operate a huge new manganese mine in cent ral Gabon and market the mineral
        under an agreement signed Thursday in Libreville.

        Mines Minister Julien Nkoghe Bekale said Huazhou Mining, a subsidiary of China's CITIC group, would
        invest 40 billion cfa francs (61 million euros, 85 million dollars ) in the mine at M'Bembele, 200 kilomet res
        (120 miles) southeast of the capital.

        In the first two years it was planned to extract 800,000 to 900,000 tonnes a year, rising to 1,040,000
        tonnes thereafter, over some 30 years.

        Bekale, who signed the accord with Huazhou's vice president Zhang Longzhu, said the site would
        employ 255 Gabonese and 85 Chinese, and part of the mineral would be processed locally.

        He said Huazhou's turnover from the mine would amount to some 73 million euros and profits would be
        9-12 million euros annually.




  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       25
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        Manganese is one of Gabon's main resources along with oil and wood. French group Eramet has so far
        had a monopoly on extracting it and is the world's second -largest produc er thanks to its mine in the
        southeast of the country.

        Africa has seen a wave of Chinese investment, despite criticism in the West that Beijing blatantly
        ignores human rights abuses, and environment and corruption issues in some countries, as it aims for
        the continent's resources.

        China pumped 9.3 billion dollars into Africa by the end of 2009, a Chinese government report said last
        week, and officials have vowed the push would continue.

        Eskom, Transnet bonds seen as attractive
        Reut ers, 20/10/ 10

        South Africa's Eskom and Transnet are likely to see strong demand for planned eurobonds over the
        next few months, as investor appetite for emerging market debt is likely to outweigh management
        problems at the State-owned firms.

        Eskom , the country's power utility, has said it needs to raise R45 -billion to R50-billion over the next
        three years in the international markets.

        Trans net , South Africa's logistics group, plans to launch a $1-billion bond to help fund infrastructure
        investment.

        Eskom accompanied Sout h Africa's Treasury on an investor roadshow in April and is expected to go to
        market before the end of this year.

        The timing could not be better: investors are eating up emerging market debt that has yielded double -
        digit returns this year.

        "Generally speaking right now t he markets are very receptive and accommodative to new issue supply.
        We are seeing high degree of appetite for high-quality emerging market paper and that certainly
        extends to the corporat e sector," said Michael Gomez, port folio manager and co-head of emerging
        markets at PIMCO.

        Eskom's foreign currency rating is at BAA2 by Moody's and BBB+ by Standard & Poor's.

        "On the longer-t erm side, we see a sanguine outlook for emerging market economies and issuers both
        on the sovereign side and the corporate side," Gomez said in a telephone interview from Munich.

        After Dubai's debt crisis last year, investors are looking for companies with strong sovereign ba cking.

        Eskom expects to get R150-billion more in state support, above the 175,97 -billion in guarantees it has
        already secured. Further support could be announced by the Treasury in its medium -term budget
        statement on October 27.

        While analysts would not be pinned on pricing, one US-based investor said yields would likely "not be
        that exciting."

        "I would look at other utilities across emerging markets. That would be a more important indicat or for
        pricing," the investor said, adding he would take up Eskom and Transnet bonds.

        Brazil's state-owned oil company P etrobras, whos e ratings are similar to Eskom, issued a $2,5 -billion
        ten-year bond last year at a yield of 5, 875%.

        Eskom last tapped the global market in 2006 with a seven-y ear 500-million eurobond, at a yield of
        4,051% and the yield could be lower than that in the current market.

        Leadership problems at these companies will likely not bother investors.


  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       26
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        Eskom appointed Brian Dames as chief ex ecutive in June, after mont hs of a leadership vacuum created
        by the exit of Jacob Maroga and board chairman Bobby Godsell in November in a power struggle that
        involved labour unions and factions of the ruling ANC.

        Trans net has yet to appoint a permanent replacement for Maria Ramos who departed in February 2009,
        but acting CEO Chris Wells is highly regarded in the industry.

        "Foreigners are dying for South African parastatal debt," said Michael Kafe, analyst at Morgan Stanley,
        adding he fielded a lot of questions on state-owned companies on a roadshow to Europe in Se ptember.

        "I think this is the best time to do it. They need to take advantage and issue as much as they can before
        the present window closes," he added.

        Eramet says to sell Comilog stake s to Gabon
        Reut ers, 20/10/ 10

        Eramet, the world's sixth-largest nickel producer, said on Wednesday it would sell to the Gabon
        Republic up to 10 percent of Comilog, a provider of manganese fine chemicals.

        The French company, which currently owns 67.25 percent of Comilog, said it would start by selling a
        3.54 perc ent stake in Comilog to Gabon in 2010-2011, valuing all of Comilog at 4.2 billion euros ($5.78
        billion).

        "The acquisition by the Gabones e Republic of the remaining 6. 46 percent from Eramet over the 2012 -
        2015 period will take place according to terms to be defined in due time," Eramet said in a statement.

        Eramet 's nickel goes into c atalytic converters and coins, and its alloys activities are key to the
        aerospace industry.

        Infrastructure deficiencies constraining South Africa’ s manganese growth
        Mining Week ly, 15/10/10

        Mike Rossouw cites South Africa‘s manganese story as being one of South A frica‘s saddest mining
        stories.

        ―We‘ve got 80% of the manganese reserves and resources in the world, but we only produce about
        15% of the world‘s manganese, compared with China, which produces more than 35% of t he world‘s
        manganese with less than 5% of the world‘s manganese reserves and resources,‖ says Xstrata Alloys
        executive director Rossouw, who addressed the CFA Sout h Africa -GIBS conference in Johannesburg,
        on future strategies.

        He is one of several miners who rec ognise that South Africa‘s manganese reserves and resources are
        well in excess of the country‘s share of global production.

        South A frican-born BHP Billiton CE O Marius Kloppers has emphasised the point of South A frica‘s ―very
        significant‖ manganese resources in South A frica‘s Kalahari basin on more than one occasion, as has
        Pallinghurst CEO Arne Frandsen.

        Current exporters of manganese from South Africa‘s Kalahari basin include Assmang/African Rainbow
        Minerals and Samancor – run by BHP Billiton and part owned by Anglo American.

        Newcomers include Russian-link ed Renova, with its partner, United Manganese of Kalahari, which is
        mining some 600 000 t/y, with aspirations of a million tons a year.

        Project developer Kalagadi Manganese, of which steelmaker ArcelorMittal is half owner, is looking to
        build up to 2,4-million tons of sinter a year, as well as a beneficiation plant at Coega.




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The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        The Brian Gilbertson-chaired and JSE-listed Pallinghurst is working towards establishing a small high-
        grade underground manganese mine in the Northern Cape and has recently been granted new-order
        mining rights for its Tshipi asset.

        There are also many other small Kalahari basin explorers.

        With steel consumption expected to be 1,3-billion tons in 2010 and nearly double that, 2,5 -billion tons a
        year, in the next 15 to 18 years, some see manganese as being in the position that chrome was several
        years ago, when stainless steel consumption was forecast to grow strongly on an ongoing basis.

        Chrome‘s projected growth gave c hrome miners the confidence to turn it into higher-value ferroc hrome,
        and today vast quantities of ferrochrome are exported from Sout h Africa.

        Recently, when chrome was exported from South A frica in its raw chromite form and not as higher-
        value ferrochrome, there was an outcry.

        But there is no similar concern over the export of manganese in raw form, which chairpers on and
        Integer Analysts director Kevin Fowkes noted at last month‘s MetalBulletin Ferroalloys conference, in
        Johannesburg.

        Relative to the manganese ore price, the price of manganese alloy is undervalued, but that position is
        beginning to correct. Also, although South Africa‘s energy prices are increasing, so are power prices in
        the rest of the world, which is likely to put South A frica‘s manganese smelters back on par with
        competitors.

        Fowkes‘s overwhelming point, however, was that, ―looking forward, the market is going to have to turn
        more and more to South Africa to satisfy world demand‖.

        Late last year, BHP Billiton‘s Kloppers and the then BHP Billiton manganese president, Peter Beaven,
        organised a media conference to drive home the need for South Africa to establish a bigger and better
        manganese transport corridor, so that the country can benefit optimally from its rich source of
        manganese in the Kalahari.

        ―We want to grow our manganese business, off a very, very good resource base – not only our resource
        base, but also South Africa‘s resource base – it is important that, in due course, we find another export
        route, wit h higher capacity and lower cost.‖

        The snag for the export of more manganese ore is largely logistical and the hang-up for its greater
        beneficiation into alloy is energy.

        While the private sector is being wooed to alleviate t he rail and energy s ituation, this invitation is still far
        too tentative and both existing manganese producers and aspirant manganese produc ers are anxiously
        trying to secure adequat e rail capacity.

        Trans net Allocation

        South Africa‘s State-owned rail company, Transnet, last year set a deadline for manganes e miners to
        express interest in participating in an export rail allocation process – or face disqualific ation.

        Trans net GM CapeCor S hulami Qalinge – who also spoke at the MetalBulletin Ferroalloys conference –
        says that allocation led to participants being categorised as committed participants and uncommitted
        participants.

        Qalinge now makes the point that Transnet may have to withdraw some of the capacity from the
        uncommitted participants in order to recover more capacity.

        In such instanc es, six months‘ notice will have to be given to those participants whose allocation is to be
        withdrawn.



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The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        That allocation may then be reallocated to the participants that Transnet has prequalified.

        But Qalinge says that Transnet is hoping that it will not have t o withdraw allocation and will also have to
        enter int o a new allocation for newcomers, but one that is unlikely to be as detailed as before.

        ―For the newcomers, we‘ll have to go through anot her transparent process,‖ Qalinge says. But there is
        no date for that.

        ―We might not give newcomers what they are looking for, but at least we‘ll meet them halfway,‖ Qalinge
        says.

        Of the newcomers not catered for on rail, but who have obtained mining rights, she adds that Trans net
        ―will have to run a different proc ess‖.

        The last process was not transparent from a media point of view, with, for example, requests by Mining
        Weekly to be able to be present at some of the meetings falling on deaf ears, and as a result of these
        kinds of comments at the MetalB ulletin Ferroalloys conference, uncertainty continues, which does not
        augur well for investment.

        Trans net senior manager Diedre Strydom – who also addressed t he conference – says Transnet is
        ―very transparent ‖ in terms of its own funding constraints and in terms of ―reac hing out‖ t o its customers
        and potential financiers to assist it with the capital programme needed to support the growth of the
        economy ‖.

        She adds that Transnet‘s investment in capacity has to be sustained t hrough revenue and compl ains
        that the State-owned enterprise experiences ―both good and bad business‖ from the mining industry.

        Kumba Iron Ore CEO Chris Griffith said earlier this year that Transnet was engaged in ―serious talks‖
        with both iron-ore and manganese miners, with steps being considered to increase manganese exports
        beyond five-million tons a year to 14-million tons a year.

        The disadvantage that manganese miners have with Transnet is that their volumes are far lower than
        those of the iron-ore miners and the coal miners.

        ―We‘re a poor cousin in terms of volume, but our exports bene-fit the S outh A frican economy as a
        whole,‖ says one manganese miner.

        On a value basis, a ton of manganese fetches considerably more than a ton of iron-ore or coal.

        Manganese ore is selling at $300/t on a free-on-board basis, and volumes between now and 2017 may
        be 12-million tons, some say.

        But exactly how that will come about is still unclear.

        The Port Elizabeth port capacity is expected to be increased to six -million tons of manganese a year.
        The Durban port can cope with two-million tons of manganese exports a year to four- million tons.

        It would not require a great deal to get the Coega port involved from both a rail and a port viewpoint.
        The cancellation of the Rio Tinto aluminium project has left bulk berth capacity at Coega, but many want
        the Sishen–S aldanha rail line expanded to accommodate manganese.

        The Coega port could take four-million tons of manganese and a stretch of the Port Elizabeth rail could
        be rebuilt and dedicated to bulk freight.

        The Sishen–Saldanha option is seen as being simpler, however, but several small operators believe it
        should be one of the options and should not put a halt to work on the other options.

        E ven small miners have expressed keenness to own their own trainsets.



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The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        One has calculated that there would be a quick two-year payback on trainset investment.

        Kalagadi Manganese technical director David Wellbeloved, whose new company will begin railing
        manganese in 2012, says that Kalagadi has already given Transnet its ramp-up plans.

        Kalagadi is building its manganese mine, which accesses manganese ore at a depth of 280 m, a 2,4 -
        million-ton-a-year sinter plant near Hot azel, in the Kuruman area of the Northern Cape, as well as its rail
        link.

        The final stages of motivating for the construction of a 320 000 -t/y ferromanganes e smelter complex in
        the industrial development zone of the Coega deep-water harbour are also under way.

        With South A frica‘s State-owned Industrial Development Corporation as a 10% shareholder, the
        Kalagadi smelter project is expected to go ahead, possibly with funding from probeneficiation
        organisations like the Development Bank of South Africa, the Public Investment Corporation and the
        African Development Bank.

        Kalagadi has said from the outset that it considers its Northern Cape mining project a three -in-one
        project.

        Total funds committed to date are R1 -billion out of a total project value of R10, 5-billion.

        Trans net‘s Qalinge says that, because Kalagadi Manganese has committed itself to beneficiating
        manganese and because beneficiation is being encouraged by government, Transnet‘s allocation to
        Kalagadi is likely to remain firm.

        Mining Weekly understands that some producers are res orting to road transport as they are not able to
        gain rail allocation, but this is seen as creating danger on South A frica‘s roads.

        Trucking, which is already said to have resulted in two people being killed and roads being damaged, is
        not seen as sustain- able, particular as volumes increase.

        International Manganes e Institute market analyst Mark Camaj says that an indicator of manganese
        demand is the expected annual steel production of China rising from 600 000 -million tons a year to a
        billion tons a year against a background of depleting and degrading oreb odies.

        ―If you double China‘s imports, you‘re looking at 20-million tons of imports into China alone,‖ Camaj
        says.

        There is also a rise in demand from India and Brazil.

        There is ore in Brazil as well, but there is a possibility that Brazil will use more of its manganese
        internally.

        Government‘s beneficiation strategy document is understood to cover ten mineral commodities, one of
        which is manganese.

        The downstream value addition envisaged involves a range of activities from the large -scale capital -
        intensive smelting and refining.

        The compilers of the strategy claim t hat the time has never been more opportune for a more
        coordinated growth in adding value to minerals.

        SA stocks, rand at highest in more than 2 years
        Reut ers, 13/10/ 10

        South African stocks finished at their highest in more than two years on Wednesday, powered by
        miners and financial firms, after upbeat economic data from China and expectations of further moves by
        the US to boost growth.


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The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        The blue-chip Top-40 index rose 1,78% to 26 990,02, its highest finish since July 2008.

        Separately, the rand currency hit a 2-1/2 year high of 6,8049 against the dollar.

        Nationalisation could be a plan to bail out failing companies
        Mining Week ly, 13/10/10

        National Union of Minework ers (NUM) president Senzeni Zokwana on Wednesday questioned the
        sincerity of the nationalisation debate, saying it might be seen as an attempt to bail out struggling
        companies.

        "There have been rumours that the nationalisation of the mines is nothing short of a bail -out plan for
        failing black economic-empowerment companies. And unfortunately, government is doing not hing to
        rubbish these rumours, so they will gain moment um," he said at a media conferenc e in Johannes burg.

        Zokwana called for a "sober" discussion on nationalisation and said that the NUM would not join a
        debate where insults were being levelled at parties opposing the idea.

        "We are seeing young members of the African National Congress (ANC), who should be mobilising the
        youth to dedicate their time to education, mixing with business people to get the nationalisation debate
        on the agenda of the A NC. And the way that these members are going about this is raising suspicion."

        The NUM has been a visible absent ee from the debat e about nationalising the mines, which the AN C
        Youth League argues would be of greater benefit to workers than the current model of privat e
        ownership.

        When pressed as to whether the NUM supported the nationalisation debate, Zokwana stressed that the
        NUM has the working masses best interest at heart. He stated that nationalisation would be a costly
        affair and noted that private equity in South A frica was hard to come by.

        "Perhaps a model such as the one used in Namibia and Botswana, where the governments enter into a
        joint ventures with private mining majors, is the way to drive nationalisation in South Africa. As the NUM
        sees it, the only way to drive nationalisation locally is to establish the State -owned mining company and
        look at models on how this company would interact with existing mining majors," he said.

        At the recent Mining for Change conference, which was held in September, ANCYL president Julius
        Malema outlined his proposed method of nationalisation, which included a possible State takeover of
        private mining companies.

        Malema argues that nationalisation was provided for in the Freedom Chart er.

        Zokwana acknowledged t hat the Freedom Charter provided for the nationalisation of the minerals rights
        below the ground, but said that it did not mention mining companies.

        Ivory Coa st manganese exports off almost a fifth
        Metal-Pages, 11/10/10

         Ivory Coast exported almost 63,000 tonnes of manganese ore in the first eight months of this year, off
        almost 20%, or about 15,000 tonnes, shipped in the same period last year, according to official customs
        data.

        The country shipped about 3,800 tonnes of ore in August this year, from about 14,300 tonnes in the
        same month last year.

        Ivory Coast exported almost 150,000 tonnes of manganese ore in total last year – off about 30,000
        tonnes, or 16%, on more than 175,000 tonnes shipped in 2008, data showed.




  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       31
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        Shipments had been affected on work stoppages at one of the mines in t he country in the first six
        months of last year.

        ‘Extraordinary’ measures required for SA to avoid blackouts from 2011 to 2016
        Engineering News, 08/ 10/10

        Without "extraordinary" supply- and demand-side intervention, South Africa could face a cumulative
        electricity shortfall of 42 TWh between 2011 through to 2016, the newly published ‗Medium Term Risk
        Mitigation' (MTRM) plan asserts.

        Eskom is currently estimating that South Africa will consume 228 TWh during its 2010/11 financial year
        to March 31, 2011, up from 218 TWh in the recession -afflicted 2009/10 period, and for demand t o grow
        by an average of 2% a year in 2012 and 2013 from that postrecession base.

        Eskom operations and planning division MD Kannan Lakmeeharan tells Engineering News that the risks
        presented in the MTRM are "serious", but described them as a "worst -case scenario".

        The State-owned utility is calculating a "peak-risk" short fall of 9 TWh in 2012 or 2013, but remains
        hopeful that a combination of solutions can be brought to bear to ensure that load shedding is avoided
        ahead of the introduction of new base -load capacity. The 9-TWh gap is more or less equivalent to the
        continuous operation, over a year, of one unit at the 1 800 -MW Koeberg power station, which comprises
        two 900-MW units.

        That said, Lakmeeharan acknowledges that urgent policy, legislative and regulatory interventions are
        required to ensure that the mitigation plans are effectively deployed.

        Drafted by a team comprising government, business, labour and officials from Eskom, the MTRM
        document examines various scenarios, and bases its mitigation solutions on somet hing called ‗scenario
        3'.

        Under t his scenario, Eskom "will be hard-pressed" to achieve an 85% energy availability factor (EAF)
        over the coming years, owing t o a lack maintenanc e time and ongoing coal quality problems. Further, it
        factors in delays to the introduction of the Medupi and K usile coal-fired projects, which are being built in
        the Limpopo and Mpumalanga provinces respectively.

        Rolling blackouts are likely, the plans says, unless South Africa departs from "business as usual" and
        clears the current policy, legislative, regulatory and financial const raints to the introduction of non -
        Eskom-relat ed generation capacity and accelerates energy efficiency and energy conservation
        programmes.

        In fact, the MTRM, which was released along with the executive summary of the second integrated
        resource plan, or IRP 2010, assumes an Eskom EAF of 84,5%. It is also based on the introduction of the
        first Medupi unit on May 6, 2013, rather than Eskom's official schedule, which has Medupi being
        synchronised to the grid by May 7, 2012. This, in turns has a knock -on effect for the introduction of the
        subsequent five units. Moreover, it is assumed that the first Kusile unit will be introduc ed on July 4,
        2016, rather than the official schedule of July 7, 2014.

        Both supply and demand options are interrogat ed with renewable proj ects, cogeneration, own
        generation and independent power producer (IPP) solutions held up as offering cumulative relief
        potential of 44,1 TWh bet ween now and 2016 and efficiency projects, efficient technologies and
        behaviour change a furt her 19,4 TWh.

        However, a gap could remain for 2012 and 2013, which the MTRM argues could be closed through the
        use of a mandat ory energy conservation scheme, which should be deployed as a "safety net" as a "final
        measure".

        The plan argues that investment in non-Eskom generation "is urgently required to make up for the
        shortfall in supply" and that "well-advanced cogeneration and own generation projects can produce
        between 1 000 MW and 1 500 MW by 2014".


  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       32
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        Further, renewable generation of 1025 MW, utilising funds approved under the current tariff system
        funds for renewable energy feed-in tariff- (Refit-) aligned projects could be brought into operation from
        2012 onwards.

        Lakmeeharan believes that 1 000 MW of cogenerated and own-generated capacity is realistic,
        particularly given the advanced work being done by companies such as Anglo American and Xstrata on
        generation from discard-coal in Mpumalanga province.

        The Refit projects will also be introduced, but owing to delays in finalising the bidding process most of
        this capacity is likely to be introduce in the 2014 to 2016 period.

        But the MTRM document insist that this assumes that the following binding constraints are resolved:

        The creation of equitable rules and costs of energy transport over the grid.
        Trans parency and ring fencing of energy transport tariffs.
        The appointment of a single buyer and agreement on the commercial evaluation criteria agreed.
        The release of a standardised power purc hase agreement, with fair contractual risk allocation.
        The simplific ation of grid-code requirements for small generators.
        And, assistance for municipalities to reintroduce idle generating plant.
        South African Independent Power Producers Association Doug Kuni welcomes the plan and the role
        outlined for IPPs in closing the immediate supply -side gaps.

        But he tells Engineering News that it was vital that it be followed up by decisive action to deal with
        persistent policy and regulatory uncertainties.

        There is particular anxiety about the current grid-access and power-wheeling rules, which would have to
        be adjusted to encourage investment by the privat e sector.


                                                                                        AMERICAS                                                                        back to index

        US silicomanganese market stable, eyes 2011 bounce
        Metal-Pages, 12/10/10

        The silico-manganese market in the United States has been relatively steady in the past few weeks,
        holding around current levels on low level buying from steel consumers and inter -merc hant business,
        although longer term prices are seen stronger in line wit h demand, dealers told Metal -Pages on
        Tuesday.

        US spot silico-manganese prices are at 61-62 cents a pound, from, 60-63 cents/lb last month. This year
        the market hit an annual peak of 74 cents/lb in April, and a peak of 75 cents/lb last year.

        Steel production in the States has slipped in recent weeks , dropping below 70% for the first time since
        late June/ early July this year when steel mills started to wind down production ahead of the seasonal
        slowdown.

        ―Current US silico-manganese prices are seen as cheap and prices should be stable and the get
        stronger early next year on government stimulus programmes and renewed steel demand,‖ a dealer
        said.

        Dealers said steel mills have bought silico-manganese at some 60-63 cents/lb for delivery in the next
        quarter, giving some stability to a mark et where sentim ent has been c autious about the strength of a
        sustained recovery in the domestic economy.

        CONS TRUCTION

        The ailing US construction industry may be headed for a small rebound next year, according to a
        leading US trade economist recently. Few industries have been hit harder in the US economic slump

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The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        than the domestic construction industry, according to the Associated General Cont ractors of America
        (AGCA ).

        In the past two years, US construction spending fell $812 billion, or 10%, chief economist at the AGCA,
        Ken Simonson, said.

        Yet, US construction spending nationwide may jump as much as 7% next year, he said. Much of the
        growth will come from highway, power plant and military construction projects.

        He said the construction industry has an impact on the whole domestic economy, with every $1 billion
        spent on non-residential construction increasing the national gross domestic product $3.4 billion.

        US ferro-manganese edges up again on supply worries
        Metal-Pages, 12/10/10

        US high carbon ferro-manganese pric es have edged up again in the past couple of weeks on low stock
        levels and steel c onsumer buying to replenish t heir stocks, while a fall in Chinese production has added
        support to international prices, dealers told Metal-Pages this week.

        High carbon spot prices are some $1,325-1,375 a long ton, from $1,320-1, 360/ton. Refined grades are
        around $1.20-1. 22/lb for medium carbon and some $1.30 -1.32/lb for low grade.

        Dealers said as yet there has been no clear signal from t he US National Stockpile Center (DNS C) as to
        its annual material plan (AMP ) to sell ferro -manganese for fiscal year 2011, which started on October 1,
        bolstering support for ferro-manganes e prices.

        ―There has been stronger demand and big supplies for prompt delivery are not widely available as the re
        are some quarterly settlements to be concluded,‖ one dealer said.

        "However, the government has not yet slated its amount of ferro-manganese for sale in its annual
        budget for next year, which has prompted some short covering.‖

        The DNS C typically offers 100, 000 short tons of high carbon ferro -manganese for sale from its stockpile
        on a bi-monthly basis. The sale of US government ferro-manganese has been temporarily suspended
        pending the approval of the fiscal year 2011 AMP, according to the DNSC website.

        DLA hands over implementation plan to Congre ss
        Metal-Pages, 11/10/10

        The Defense Logistics Agency (DLA) Strat egic Materials said it had released its Implementation Plan to
        Congress that outlines proposals to develop a metals stockpile to help current and future availability of
        strategic and critical materials for national security needs.

        Under the plan, the National Defense Stockpile (NDS) would be turned into the Strategic Material
        Security Program (SMSP ) that would identify material requirements and de velop and implement risk
        mitigation strategies, the DLA said in its report.

        It comes as concerns grown across government departments regarding the availability of strategic and
        critical materials, particularly for national security.

        The plan also calls for partnering with foreign nations through best-value strategic sourcing initiatives
        and also traditional stockpiling.

        The SMSP would also have the expanded capability to respond fully to evolving conditions in the world
        market and to rapidly changing req uirements for both traditional and new materials.

        Further, it would require frequent, collaborative interaction with the nation‘s key material users and
        producers.



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The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        The plan comes in response to a Congressional request to provide a report on implementatio n of the
        reconfiguration of the NDS.

        It contains recommendations made in the April 2009 report ―Reconfiguration of the National Defense
        Stockpile Report to Congress,‖ submitted by the Under Secretary of Defense for Acquisition,
        Technology and Logistics.

        Other recommendations made in latest report include:

        • Manage a repeatable, structured process that identifies strategic and c ritical material requirements for
        essential civilian and defens e needs by applying National Security Emergency and Peacetime Supp ly
        Disruption Scenarios,

        • Manage an on-going assessment process to determine potential short term disruptions bas ed on new
        circumstances, such as emerging new demand, geo -political threats, unex pected foreign export
        controls/limitations, changes in U.S. industrial base, and loss of access (e.g., natural or manmade
        disasters, political instability),

        • Create a forec ast/planning report for short term (emergent), long-term (5-6 year cycle), and future war
        fighting systems acquisition needs, and on-going war fighting systems sustainment needs,

        • Develop a critical pat h communication linkage with OS D and other senior leadership to report and
        recommend actions for adapting to world market conditions,

        • Establish/expand formal relationships that enable success of SMSP, and

        • Develop risk mitigation strategies, such as long -term contracts or agreements, contingency

        The DLA said last month that it would stop all its sales of metals until furt her notice as of S eptember 30
        as it awaits for the approval of the Annual Materials Plan (AMP) for the 2011 fiscal year.

        The AMP, provides the framework for DLA sales of stockpile material each year, as it out the maximum
        quantity of each commodity bought or sold by the U.S. Department of Defense. It is submitted early
        each year for Congress approval, which it is still awaiting for the next fiscal year.

        Sola Resource Visi ts Brazil, Progresse s Due Diligence Process For Rio Madeira Comercio
        Acqui si tion
        Proactive Investors, 08/10/10

        Junior explorer Sola Resource said Friday it has recently completed a visit to Brazil to meet with Rio
        Madeira Comercio Importacao E Export acao De Minerios, as part of the ongoing due diligence process
        in its agreement to acquire 50% of the Brazilian company.

        The purpose of the trip was to continue discussions surrounding the logistical operations and integration
        of Rio Madeira, as well as review the plant and processing modifications that were required in the
        agreement.

        Sola said it was encouraged by the progress that Rio Madeira made with the ongoing modifications and
        upgrades to its processing plant. Rio Madeira closed out the month of September 2010 with 3,000
        metric tonnes of Manganese. The grade averaged 52%, which Sola considers to be "high grade".

        Sola not ed, however, that the production l evel will fluctuat e and is somewhat weather dependent until
        more upgrading is completed. Mainly infrastructure upgrades are needed to allow the raw material to be
        transported to the processing facility, Sola said.

        In addition, Rio Madeira has implement ed on site vibration screening, increasing the yield of
        Manganese being trans port ed. In the past, each truck load of mat erial cont ained approximately 30%
        Manganese by volume, but this has now increased to 70%.



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       35
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        Sola and Rio Madeira are in continued discussions over the timing of the acquisition, they said.

        Sola has assets in Canada and Brazil and is primarily focus ed on diamond, gold and base metal
        resource properties.


                                                                        GENERAL INFORMATION                                                                             back to index

        Ryan’ s Note s Weekly
        Ryan’s Notes, 25/10/10

        Manganese ore prices start to fall

        The US bulk ferroalloy market was relatively calm last week, with few sellers trying to establish new
        pricing levels. Ferrosilicon remained the only hot commodity, with European prices slight ly weaker on
        the basis of a second online tender. The strength of the euro also made that market more attractive to
        sellers. Chinese prices were up, with the major smelters taking a hard line and refusing to offer at less
        than $1,700 per mt, f.o.b. There was some concern that the $1,700 floor would not only cover new sales
        but also previously negotiated agreements. The higher Chinese ferrosilicon price appears to have put a
        hard floor on the US market, wit h many sellers now saying t hey will wait rather than sell at less than
        $1.10.

        Manganese ore prices in China started slipping; there are almost 3-million mt of uncommitted stocks
        already at Chinese ports.

        Ruukki‘s Mogale plant declared forc e majeure on silicomanganese shipments. Workers at the plant,
        which is operating at around 60%, have been on strike for over a month.

        Taiwan‘s China Steel has taken a 5% stake in Korea‘s Dongbu Metals; it is thought China Steel will take
        an equivalent of Dongbu‘s refined manganese out put. The value of the deal is 47.7 -billion won or $42.6-
        million. Dongbu Metals‘ parent, Dongbu HiTek, wants to sell its stake in Dongbu Metals.

        The US imported 40,679.9 mt of silicomanganese in August —the highest monthly total of 2010—and
        221,135.8 mt in the first eight months of 2010 vs. 5,419.5 mt and 83,779.7 mt, respectively, in the same
        2009 periods. The major suppliers in August (first eight months of 2010 in parentheses ) were: South
        Africa, 21,452.8 (102,803.1 mt); Georgia, 14,297 mt (43, 478. 2 mt); and Norway, 4,800 mt (34, 184.8 mt).

        US imports of 55-80% ferrosilicon were 23,745. 1 mt in August and 123,539.4 mt in the first eight
        months of 2010 vs. 11,610.4 mt and 48,094.6 mt, respectively, in the same 2009 periods. The major
        suppliers in August (first eight months of 2010 in parentheses) were: Russia, 12,982.5 mt (70,369.1 mt);
        China, 4,731.3 mt (25,299.4 mt); Venezuela, 4,186.3 mt (17,086.3 mt); Canada, 945.2 mt (7,404 mt).

        The US imported 21, 340. 1 mt of high-carbon ferromanganese in August and 115,860.8 mt in the first
        eight months of 2010 vs. 5,736 mt and 42,227.7 mt, respectively, in the same 2009 periods. The major
        suppliers in August (first eight months of 2010 in parentheses) were: South Africa, 10,011.1 mt
        (70,428.4 mt); Ukraine, 7,831 mt (24,943.8 mt); Korea, 1,500 mt (1,500 mt), and Norway, 800 mt
        (1,503.7 mt).

        US imports of medium-c arbon ferromanganese were 5,940.7 mt in August and 67, 170.6 mt in the first
        eight months of 2010 vs. 121.6 mt and 12,411.1 mt, respectively, in the same 2009 periods. Major
        suppliers in August (first eight months of 2010 in parentheses) were: South A frica, 5,550 mt (23,336.9
        mt); India, 250 mt (1,107.1 mt) and Mexico, 140.6 mt (7,731.9 mt).

        The US imported 1, 562. 3 mt of low-carbon ferromanganese in A ugust and 32, 969.7 mt in the first eight
        months of 2010 vs. 1,224 mt and 8,479.1 mt, respectively, in the same 2009 periods. In August, China
        supplied 1,212.2 mt and 18, 908.1 mt in the first eight months of 2010, while Norway contributed 350 mt
        and 3,312.2 mt, respectively, in the same periods.




  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       36
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        Samancor Manganese s eems to have accumulated significant inventories of manganese ore and alloys
        in the quart er ended Sept. 30, 2010. The company produced 2,122, 000 mt of manganese ore in the
        third quart er of 2010, up 23% from the same year-ago period but sold only 1,209,000 mt. Ore
        production was 1,721,000 mt in the quarter ended June 30, 2010 while sales were 1,903,000 mt, or a
        182,000-mt short fall. Both GEMCO and Hot azel had record high production in the September 2010
        quarter (938,000 mt in South Africa and 1,184,000 mt in Australia). Sales, however, were impacted by
        port maintenance at GEMCO and rail constraints in South A frica.

        The company produced 199,000 mt of manganese alloys —132,000 mt in Sout h Africa and 67,000 mt in
        Australia—in the quarter ended Sept. 30, 2010, while sales were 148,000 mt. The 51,000 -mt increase
        to inventories is in addition to the 42,000 -mt surplus carried over from the quarter ended June 30, 2010.
        Alloy output was 218,00 mt in the preceding quarter and 63,000 mt in the same period in 2009.
        Samancor Manganese said sales in the September 2010 quarter reflected the typical inventory cycle.

        With its IPO fast approaching, India‘s MOIL plans a major capital investment program over the next
        three-to-four years to boost capacity. The Indian state-owned manganese miner and smelter already
        has joint ventures with Steel Authority of India (SA IL) and Rashtriya Ispat Nigam (RINL) for
        ferromanganese and silicomanganese smelters in Chhattisgarh and Andhra Pradesh.

        Vale produced 472,000 mt of mang anese ore in the third quarter and 1,364, 000 mt in the first three
        quarters of 2010 vs. 494,000 mt and 1, 112, 000 mt, respectively, in the same 2009 periods. Azul
        produced 372,000 mt of ore in the third quarter (431,000 mt in the s econd quarter) and 1,159,0 00 mt in
        the first three quarters of 2010. The lower production in the third quarter was triggered by a stoppage at
        Azul for corrective maintenance. However, production of Uruc um increased from 48, 000 mt in the
        second quart er to 55,000 mt in the third quarter after the company added an additional shift.

        Vale‘s output of manganese alloys was 112,000 mt in the third quart er—55,000 mt of silicomanganese,
        52,000 mt of high-carbon ferromanganese and 5,000 mt of medium-carbon ferromanganes e. Output in
        the second quarter of 2010 was 113,000 mt. In the third quarter, Brazil contributed 50,000 mt,
        Dunk erque 35,000 mt and Mo I Rana 26,000 mt. In the first three quarters of 2010, Vale produced
        335,000 mt of manganese alloys vs. 135, 000 mt in the same 2009 period.

        Ryan’ s Note s Weekly
        Ryan’s Notes, 18/10/10

        Uk rainian challenge to US SiMn duty

        The US bulk ferroalloy market was quiet last week, with business at a minimum. Prices for high -carbon
        ferromanganese, however, were higher, and business for less than 400 tons was booked at around
        $1,335 per lt, ex warehouse, though some offers were as high as $1,400. With the value of the dollar
        sinking against most currencies, the European ferrosilicon market is now more attractive to importers,
        and competition is increasing. As a result, European spot tags dropped below €1,400 and one on-line
        tender for 500 mt was settled at €1,375. Both Chinese ex port and domestic prices for ferrosilicon
        slipped in the last week on continued weak demand. In the ex port market, with few foreign b uy ers‘
        inquiries, prices for 75% grade material have dropped to $1, 675 -1,725 per mt, although some are still
        offering at $1,750 per mt due to the stronger yuan.

        Some ferrosilicon smelt ers say that the Chinese government will not tighten restrictions throu gh the end
        of the year. And, there are reports that some producers have illegally restart ed their production without
        government approval. Chines e government‘s ministries have reiterated that their policy is to reduce
        ferroalloy exports, raise power prices and cut carbon emissions over the next five years.

        The lower silicon values in Europe spilled over int o the silicomanganese mark et, and spot prices were
        slightly lower.

        A major Western manganese ore miner reportedly has cut its prices again, but this in India where it will
        be less noticeable. The initial decrease was 50¢ per Mn unit. Also, Western producer medium - and low-
        carbon ferromanganese were being aggressively offered in Brazil. ―Some of t he Western



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       37
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        producers/miners are looking for ways to move their material without upsetting their target selling
        areas,‖ one competitor opined.

        The US might even be an even more producer-dominated market for silicomanganese. The Ukrainian
        producers have reportedly asked for an annual administrative review for silic omanganese from the
        Ukraine for the Sept. 1, 2009 through Aug. 31, 2010 period. The current dumping duty is 163%. The
        163% US duty is on silicomanganes e from Nikopol Ferroalloy Plant (NZF) and Zaporizhia Ferroalloy
        Plant (ZFP). Normally, the Ukrainians wouldn‘t have a chance, but that is not the case. Most
        importantly, Privat, which controls the Ukrainian manganese alloy business and is the largest
        silicomanganese producer in the world, also owns the largest US silicomanganese producer, Felman
        Productions. This is especially true for the period of investigation since the only other US producer,
        Eramet Marietta, had major production problems that affected silicomanganese output. According to
        Washington insiders, the Ukrainians do have a chance of getting the duties lowered in an administrative
        review but that will depend on the facts gathered during those investigations.

        Commerce's administrative reviews determine the level of dumping in the preceding one -year period,
        which becomes the cash deposit (antidumping) rate that goes into effect for the subsequent year.
        Commerce looks at the extent (percentage) of dumping or s ubsidies in an administrative review; it does
        not look at injury to a domestic industry. Commerce also looks at whether antidumping duties have
        been absorbed by an exporter or producer subject to the review if the subject merchandise is sold in the
        United States through an importer that is affiliated with such ex porter or producer. Therefore, if
        importers of silicomanganese from Ukraine were pay ing a 163% antidumping duty (cash deposit) during
        the past year and it turns out, upon administrative review, that the imported merchandise was "only"
        dumped by 10%, then the importers would be reimbursed 153% (163 minus 10) for that period, and
        would only have to pay a cash deposit of 10% for the upcoming period.

        The annual administrative review is almost on top of Commerce‘s five -year sunset review. The next
        five-year review on silicomanganese from Brazil, China, and Ukraine will be instituted by Commerc e
        and the ITC on Aug. 1, 2011. Whether the Commission will decide to conduct expedited or full reviews
        will depend largely on the responses of the various parties to its notice of institution. As opposed to the
        annual administrative review, the suns et revi ew determines whether revocation of the antidumping
        duty order would be likely to lead to continuation or recurrence of dumping and, if so, the margins of
        dumping that are likely to occur upon revocation.

        "Ukrainian producers operate in a free mark et and do not benefit from any preferential treatment by the
        State. Currently, there are more than three foreign countries that supply silicomanganese to the
        Ukrainian market," the Assn. of Ukrainian Ferroalloy Producers (UkrFA) said.

        The Gabonese government will increase its share in Comilog, which is currently 67. 25% held by Eramet
        and 25.4% by the Gabonese government. In several stages over the 2010 -2015 period, the Gabonese
        government will increase its interest by an additional 10%.

        China exported 37,654 mt of over 55% ferrosilicon in August and 507,690 mt in the first eight months of
        2010. The major buyers in August (first eight mont hs of 2010 in parentheses) were: Japan, 16,822 mt
        (210,388 mt); Korea, 8,679 mt (109,493 mt); the US, 1,088 mt (24,798 mt ); Tai wan, 825 mt (23,907 mt);
        Turkey, 0 (21,910 mt); and the Netherlands, 150 mt (10,319 mt). The top five ex port ers of ferrosilicon in
        August were Xining Minmetals I/E, 3,349 mt, Shanxi Fangrui Met als Trading Co., 2,884 mt, Ningxia
        Commercial Foreign Trade Co., 2,781 mt, Sinosteel, 2,670 mt, Erdos Xijin, 2,603 mt and Inner Mongolia
        Sanwei Res ourc es, 2,189 mt.

        China ex ported 8,027 mt of silicomanganese in August and 65,673 mt in the first eight months of 2010,
        down from 68,536 mt in the same 2009 period.

        Kalahari Mining reportedly is having some problems with contracting for its planned sinter plant.

        OMH considering a Malaysian Mn smelter

        OM Holdings is considering building a manganese smelter, probably producing high -carbon
        ferromanganese, in Malaysia. The facility would also include a sintering plant and port/distribution


  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       38
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        network. The smelter, according to the Australian miner, is needed because China is becoming a net
        importer of manganese alloys and the region‘s demand for manganese alloys keeps increa sing. In
        addition, China‘s domestic ore reserves are declining and the government is trying to discourage
        exports of manganese alloys. Raw material and power costs in China are also getting prohibitively high.
        It is thought that OMH might be looking for partners in the project. The Malaysian plant would have
        competitively pric ed and stable power supplies, and its location would be strategically placed in regard
        to importing manganese ore and exporting the finished product. And, Malaysia has no import duties or
        export taxes. Finally, OMH has a great deal of manganese ore from both its Bootu Creek mine in
        Australia and Tshipi mine in South A frica.

        However, the potential merger of Consolidated Minerals‘ and OMH‘s Australian manganese holdings
        has apparently ended without resolution. The company pointed to difficulties identifying a mutual
        suitable transaction structure. There were als o rumors that Vale and Privat are negotiating to combine
        Vale‘s manganese assets, including its European and Brazilian smelters and Brazilian mine, with
        Privat‘s worldwide mining and smelting assets.

        OMH had a record manganese ore production of 227, 968 mt in the third quarter of 2010—154,991 mt of
        35.44% Mn lump, 43,126 mt of 37. 96% Mn fines and 29,851 mt of 35.86% Mn SPP fines. For the first
        three quarters of 2010, production was 598,436 mt—374,692 mt of 36.5% Mn lump, 108,693 mt of
        38.98% Mn fines and 115,051 mt of 36% Mn SPP fines. The mine is forecast to produce 250, 000 mt of
        ore in the fourth quarter and 850,000 mt in 2010, up 31% from the previous year.

        The Bootu Creek mine‘s unit cash cost was A$4.29 per dmtu in the third quarter and A$3.91 in
        September. The fourth-quarter cash cost is estimated at A$4. In the third quarter of 2010, OMQ, the
        company‘s Chinese high-carbon ferromanganese smelter, produced 17,719 mt with two furnaces
        running at full capacity. The Qinzhou smelter, however, has been told by Chinese provincial authorities
        that they can‘t guarantee 100% power supply in the fourth quart er. If power is restricted, OMQ will bring
        forward the reline of the #1 furnace as well as other planned maintenance.

        Finally, OMQ‘s sinter plant produced 48,625 mt in the third quarter of 2010 and is running at its
        budgeted 200, 000-mtpy capacity. The plant‘s output in the second quarte r of 2010 was 34, 352 mt and
        5,649 mt in the first quarter. The second phase will increase the plant‘s capacity to 600,000 mtpy in
        2011; the first phase was commissioned in March 2010.

        Ryan’ s Note s Weekly
        Ryan’s Notes, 11/10/10

        US SiMn prices slightly higher

        The bulk ferroalloy market was deadly dull last week, with the only activity confined to the
        silicomanganese market. In the US, silicomanganes e tags moved slightly up with consumer sales and a
        noticeable increase in inter-merchant transactions. Sellers believe silicomanganese prices will have to
        reset on the basis of higher ferrosilicon prices. In the US the market is dominated by the two domestic
        producers— Felman Productions and Eramet Marietta.

        Chinese prices for high- and medium-carbon ferromanganese were also higher though they were priced
        out of the export market.

        US ferrosilicon prices remain range bound though prices in Europe and China were lower. With
        consumer interest at a minimum, some resellers don‘t want to hold stocks through the end o f the year
        and are looking to make deals. The next squeeze, if there is one, is expected to materialize in
        December when first-quarter buying begins. ―Consumers will find t hat no one brought any ferrosilicon
        into the US for a quarter, and there won‘t be any nearby material, ‖ one supplier warned.

        Mogale is still on strike and is thought to be running one silicomanganese furnace at reduced capacity
        though it plans to restart a second furnace before the end of the year.



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       39
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                                                                                     STEEL NEWS                                                                         back to index
        US steel demand for remainder of 2010 remains a concern – California Steel
        Metal-Pages, 25/10/10

        Conc erns continue to linger over waning demand levels for steel in the United States during t he final
        quarter of this year as key end-markets fail to gain strength, according to California Steel Industries Inc.

        The Fontana-based steel producer has added its name to a growing list of companies that are fearful
        over the economic outlook as unemployment figures remain high, a flurry of i nventory restocking falt ers
        and the US government‘s stimulus programmes decline in the second half of this year.

        "During third quarter, shipment levels remained consistent with second quarter volume, which, in
        today's reality, is definitely positive," said Vicente Wright, president and chief executive officer of
        California Steel.

        "However, this economy is far from repaired, and we remain concerned for the outlook of the balance of
        the year, mainly in regard to demand.‖

        Steel Dynamics Inc. described the US steel market as ―sloppy‖ last week amid depressed price levels
        as the economic recovery flattens, while Kaiser Aluminum said on Monday that a recovery in the U.S.
        automotive, general engineering and industrial sectors is continuing to stutter and improvements are not
        expected until the economy shows signs of stability.

        Figures from the American Iron and Steel Institute have underlined the rec ent downturn in steel
        production over the past month.

        Production of raw steel for the week ending October 16 was 1,629,000 net tons, which is 1.3% lower
        than the week before when output was 1,651, 000 tons.

        The lower figures come as steel mills continued to curtail capability utilisation rates to 67.4% from
        68.3% the week prior.

        The outlook by California Steel comes as the company reported net income of $2 million in the third
        quarter compared with $7.3 million in the same period last year.

        The drop followed a $7.5 million invent ory write down to market value as the company said its invent ory
        values are carried at the lower of cost or market.

        But sales were $313.9 million, up from $146.9 million a year ago, while shipments were 365,608 net
        tons compared with 244,417 net tons a year earlier and flat with the second quarter.

        European steel sector faces shaky Q4 after weak Q3
        Metal-Pages, 25/10/10

        World market leader ArcelorMittal and other European steel makers should show in coming weeks if a
        weak third quarter has marked the start of a prolonged slowdown or only a soft patch

        The $500 billion world steel industry, a bellwether for the broader economy, had a sharp rebound in the
        second quart er due to a faster-t han-expected car sector recovery and booming demand in China.

        Since then bot h consumption areas have cooled, steel prices are sluggish and iron ore c osts have
        increased, squeezing profit margins for steel makers.

        "Steel demand... appears to be reas onably strong in the fourth quarter," news agency Reuters cited
        steel analyst Thorsten Zimmermann at HSBC in London.

        "However, stagnant steel prices are spoiling the party."


  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       40
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        Zimmerman has cut steel price forecasts 9% for the fourth quarter 9% and 5% for the first quarter of
        next year. The steel fut ures contract on the London Metal Exchange has jumped 18% so far this year,
        yet 21% off a peak hit in April this year.

        World number three steel maker POS CO of South Korea set a negative tone for the sector this month
        when it cut its 2010 forecasts after quarterly earnings missed expectations. The biggest US steel
        producer, Nucor, posted lower-than-expected profit last week and warned of a slowdown.

        Export-dependent Asian mills face a stuttering recovery in the United States and an uncertain prospect
        in Europe.

        In E urope, demand is firm in northern countries such as Germany and in the car industry in general, as
        well as inc reasingly engineering, although is subdued in the south part of the continent and in
        construction.

        Posco pre sse s ahead with Indonesian steel mill project
        Metal-Pages, 21/10/10

        South Korean steelmaker Posco said is accelerating efforts to ensure successful construction of a new
        6 million t py steel mill in Indonesia. The company, Asia's leading steelmaker, is hosting technology
        exchange sessions and mutual benchmarking initiatives with its Indonesian state-owned joint venture
        partner Krakatau Steel.

        Five managers from Krakatau Steel are visiting Posco's works, starting with Gwanyang and Pohang
        steel complexes, this week to examine the specifications of the iron -making facilities in detail and
        discuss the construction order format for the blast furnace and sintering equipment to be installed in
        Indonesia. Each manager represents a specialty area including sintering, cokes and raw material.

        The construction on Krakatau's brownfield site in Indonesia will consist of two phases, with total annual
        production capacity targeted at 6 million tons. Construction of the first 3 million tpy phase will begin in
        October and finish by December 2013.

        Under the joint vent ure agreement, Posco will initially own a 70% share in the project with Krakatau
        Steel taking a 30% stake. The Indonesian steelmaker has an option to increase its interest to 45% after
        the joint venture establishes stable business. Using a brownfield site minimises the overall cost of the
        project as it will make use of Krakat au's existing infrastructure inc luding ports, land, wat er and electricity
        .

        ―By building on the construction and operational experience of t he joint venture, steel production is
        expected to commence ahead of schedule,‖ Poscoo said today. ―The project will enable Posco to
        produce low-cost steel due to easy availability of raw materials, as Indonesia is known for its rich
        reserves of iron ore and coal.‖ The South Korean steelmaker said building the steel mill in Indonesia will
        enable it to gain a strong foothold in Southeast Asia, which imports more than 30 million tonnes of steel
        products annually.

        Global steel production ri se s to 112Mt in Sept
        Mining Week ly, 21/10/10

        The World Steel Association said on Thursday that global steel production in Sept ember 2010, was
        3,5% higher than that of September 2008, when the global economic crisis started impacting on steel
        output.

        The positive recovery trend was mainly driven by Asian, Middle Eastern and certain European
        countries.

        Global steel production was 112-million tons in September 2010, which is 0,9% higher than September
        last year.




  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       41
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        However, in Africa, the trend was bucked. Sout h Africa, which is A frica's largest steel produc er, showed
        a 5,7% rise in production compared with September 2009, but it was still 6% below 2008 levels.

        Aggregat e production for the continent equalled almost 1,4-million tons of steel for the month, which
        was 11,6% higher than September 2009 production, but still 2,4% lower than September 2008
        production of 1,43-million tons.

        Resource-hungry China produc ed 47,9-million t ons in S eptember, a decrease of 5, 9% compared with
        September 2009.

        Also in Asia, Japan produced 9,2-million tons of crude steel in September 2010, up 11,7% compared to
        the same month last year.

        South Korea's crude steel production for September 2010 was 4,7-million tons, which was 3,2% higher
        than that of a year earlier.

        In Europe, Germany's crude steel production for September 2010 was 3,3-million tons, an increase of
        4,1% on Sept ember 2009. It aly produced 2,3-million tons, 19,8% more than the same month in 2009.

        Turkey produced 2,5-million tons of crude steel in September 2010, 17,9% higher than September
        2009.

        Meanwhile, the US also started t o see some gains in production. The country produced 6,6 -million t ons
        of crude steel in September 2010, a n increase of 15% compared to Sept ember 2009.

        CISA Predicts Chinese Steel Output To Slow In Q4
        Steel Business Briefing, 21/ 10/10

        The China Iron & Steel Association (CISA ) predicts in its monthly market report that Chinese steel
        production will keep running at low levels in the fourth quarter as the central government‘s energy -
        saving campaign is expected to continue. The campaign has caused provincial governments to control
        the supply of electricity to industrial users including steel mills, which res ulted in production cuts, as
        Steel Business Briefing has reported.

        CISA says these measures along with efforts to close outdated steel capacity across the country have
        help China ease its oversupply situation and even caused steel prices to rise slightly last month. CISA
        estimates that China‘s September daily crude steel output fell to 1. 62m tonnes/day down by 3% from
        August and the fifth month of declines this year.

        However, CISA warns that in certain regions of the country energy -conservation meas ures had been
        loosened aft er government officials saw successful res ults. Production re-starts at mills are expected to
        follow and this could threaten the balance of supply and demand.

        An industry sourc e tells SBB mills would likely immediately resume production onc e energy-
        conservation measure ease as steel-making with domestic iron ore remains profitable.

        Steel prices are expected to stay relatively stable over Q4 as steel demand is expected to slow due to
        the winter weather and high steel inventories.

        By the end of September, China‘s steel inventories (rebar, wire rod, hot and cold rolled coil and plate) in
        26 major cities dropped by nearly 1% or 120,000 t from August, but increased 32% on a year-on-year
        basis.

        EUROFER see s recovery in European steel market
        Metal-Pages, 14/10/10

        The European steel market has started to recover with a rise in exports and /stock replenishment in the
        second quart er of the year, said EUROFE R, the industry‘s representative body.



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       42
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        In a report the organization said ―the steel market outlook showed a better-than-expected second
        quarter in 2010, not only with respect to economic growth but especially in the steel using sectors.‖

        EUROFER‘s director general Gordon Moffat added ―the recovery clearly shift ed into a higher gear in the
        second quarter. Despite a further contraction in construction activity, output in steel using industries
        grew almost 7% year-on-year.‖

        But the executive added a note of caution, warning ―at this point in time the key question is whether the
        rebound in manufacturing will continue.‖

        While growt h is expanding strongly in Germany, Europe‘s largest economy, and most of the northern
        European states, the southern European economies are still relatively depressed, it said.

        The report argued that steel market fundamentals gained further strength in the second quarter and
        consumption grew more than 35% compared to the depressed level in the same quarter a year earlier.

        ―An encouraging sign is that not only the stock cycle contributed to this positive development, but als o
        improving activity in the steel using industries in the EU, which has been supportive to steel demand. ‖

        EUROFER sees the recovery sustained in 2011 and a continuation of the rising trend in steel
        consumption. But it says that ―there remains a substantial gap to bridge with pre-crisis levels of
        industrial activity and EU steel demand.‖

        China daily steel output 8.5 pct higher late Sept-CISA
        Reut ers, 14/10/ 10

        China produced 1.678 million tonnes of crude steel in the last 10 days of September, 8.5 perc ent higher
        than the middle 10 days of the mont h, data from the China Iron & Steel Association showed on
        Thurs day.

        Its member produc ers, usually 77 medium- and large-sized steel mills, produced a total of 1.417 million
        tonnes during the same period, up 8.6 percent from the middle 10 days of September

        Weakening demand continues to hammer U.S. steel production rate s
        Metal-Pages, 13/10/10

        Waning demand for steel across major end -markets continues to heap downside pressure on U.S. raw
        steel production rates.

        Production for the week ending October 9 is down 1.4% on the week prior to 1,651,000 net tons from
        1,675,000 tons, according to lat est figures by the American Iron and Steel Institute.

        The drop comes as steel mills operated at a capability utilisation rate o f 68.3%, down from 69.3% the
        week before.

        The latest figures further underline the ongoing slowdown in the U.S. steel industry as consumers shy
        away from building stocks due to softer order books.

        Steel output has been dropping steadily over the past month during a time when production traditionally
        picks up following the summer shutdown period.

        Key end-markets such as automotive and construction could remain flat for the remainder of 2010 amid
        a softening in economic growth and the increased risk of a double dip recession, according to some
        analysts.

        But production was up 10.7% from the same week last year when output was 1,491,000 tons and
        capability utilisation rat es were 62. 3%.




  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       43
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        For the year-to-date, production was 68,805,000 tons at a capability utilisation rate of 70.6%. This is a
        47.3% increase from the 46,706,000 tons during the same period last year when the capability
        utilisation rate was 49.4%.

        Nippon Steel aims for 50-60m tpy output through overseas expansion
        Metal Bulletin, 12/10/10

        Japan‘s largest steelmaker Nippon Steel plans to boost its annual output to 50-60 million tpy over the
        next few years from its present 40 million tpy capacity, representative director and executive vp Shinichi
        Taniguchi told MB.

        Most of this growt h will be in overseas markets outside Japan, Taniguchi said, singling out other Asia
        countries and Latin America in particular. At the moment, the company‘s production is focused in Japan.

        ―In order to achieve this enhancement in capacity we will strengthen our existi ng global alliances,‖
        Taniguchi told MB.

        ―We will further step up our efforts to localise the production of auto steel sheet, downstream processing
        and developing our supply chain network,‖ he said. ―This will be Asia Pacific focussed.‖

        Over the past few years, the share of Nippon Steel‘s production that it exports has grown from 35% to
        around 45%, Taniguchi said. This is in line with growth in nearby emerging markets, like Vietnam and
        Thailand.

        In January Nippon Steel formed a joint vent ure with Tata Steel to produce and sell 600,000 tpy of high -
        tensile auto-grade steel in India by 2013.

        And in May the Japanese company signed a deal with Ternium to build a 400, 000 tpy hot -dip
        galvanizing plant in Mexico.

        ―In Mexico and India we have decided to go forward,‖ Taniguchi told MB. ―We are also advancing our
        collaboration with Bluescope Steel on providing coated sheets for construction.‖

        Nippon Steel also plans to build a 60,000 tpy pipe and sheet pile plant in Vietnam in conjunction with
        trading companies Sumitomo Corp and Metal One. This facility will supply infrastructure projects in
        emerging Asian markets.

        ―We have entered the construction phase for the steel piles plant,‖ Taniguchi said.

        ArcelorMittal to switch to smaller steelmaking hubs in Indi a
        Metal-Pages, 12/10/10

        ArcelorMittal's two giant steel projects in India planned since 2005 have been significantly delayed and
        were "highly unlikely to be realised," said the company.

        Instead, Chairman and CE O Lakshmi Mittal‘s new strategy is to have a number of smaller steelmaking
        hubs across the country.

        In an interview with the Financial Times in Tokyo, Mittal said that his new strategy was to create a
        number of smaller steelmaking hubs across the country, each capable of making a few million tonne s of
        steel a year.

        "My plan is now to have two to four sites rather than concent rate everything on large plants," he said.

        ArcelorMittal had planned a 12 million tonne steel plant in Jharkhand in 2005, followed by an identical
        plant in Orissa in 2006. But they are yet to be built owing t o problems with land ac quisition and other
        clearances.




  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       44
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        Mittal, however, added that he was still determined to participate in the steel industry in India where
        demand for the metal is increasing quickly as a result of new investments in industrial expansion and
        infrastructure development, states the Economic Times.

        Last year, the company announced plans to set up a smaller steel mill in Karnataka. Proposed
        investments in the India projects totals over INR 1,000 billion ($22.4 billion).


                                                                                OHES & SCIENCE                                                                          back to index


                                                                                              EMM                                                                       back to index

        Chinese electrolytic manganese prices stable
        Metal-Pages, 22/10/10

        The Chinese electrolytic manganese market has been basically stable in the past few days amid slow
        demand from both domestic and overseas consumers.

        Prices for 99.7% min grade manganese flakes are at RMB17,600 -17, 800/tonne basis ex works, with a
        few producers offering at as low as RMB17,500/tonne.

        Export prices are largely unchanged at $3,400-3,450/tonne basis FOB via legal routes.

        BHP‘s cut in its manganese ore offer prices to China for shipments in November and the softening
        domestic stainless steel sector have a negative effect on the future of the market, however, prices are
        still underpinned by low production rates and tight supplies of sulphuric acid.

        ―November is approaching so electricity tariffs will certainly increase in the dry season, and the increase
        in production costs will stop manganese prices from falling back," said a produc er source.

        However, some market sources believe that the market will be in stalemat e in the near term in view of
        the current status of market fundament als, particularly the slow demand.

        European manganese market resume s advance
        Metal-Pages, 11/10/10

        The European spot manganese flake market has resumed its advance from early September in the past
        week on increased offers from key exporter China, where production has been cut due to meet energy
        consumption and emissions targets, dealers told Metal-P ages on Monday.

        Manganese flake prices are at $3,200 -3,300 a tonne basis in-warehouse Rotterdam and at their
        strongest level for European manganese flake prices since October, 2008, a y ear when the market
        peaked earlier at $5,950 a tonne, according to Metal -Pages.com data.

        China, which supplies some 95% of annual world manganese flake supply, has curbed power
        consumption and emissions in heavy industry, such as manganese production, as well as other
        manganese alloys.

        ―Europe is following price moves in China, although there is not so much stock in Rotterdam now and
        demand has been sound,‖ one dealer said.

        ―However, Chinese exporters are either cranking up their offer prices to the limit, or taking a cheaper bid
        to get some quick profit. A lot of the price moving seems to be speculative.

        ―A Chinese exporter will offer a strong price, which is then refused, only to be cut some $200 the next
        day, making it difficult to forecast prices in the short term.‖



  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       45
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.
        The bulk of total world manganese production is used in alloy form in steel for use mostly in
        construction, where European demand is shaky as weak southern E uropean consumption is
        undermining stronger northern European consumption.

        Manganese lumps prices are around $3,500/tonne on the same basis, while briquettes are some
        $2,850-3,100/tonne.

        Chinese manganese flake prices make more gains in tight market
        Metal-Pages, 11/10/10

        The Chinese electrolytic manganese market has continued to make noticeable gains after the Nat ional
        Day holiday, with prices for manganese flakes rising by RMB200 -300/tonne in the past few days.

        99.7% min manganese flakes are being offered by many producers at RMB17,500-17,700/tonne basis
        ex works, with some bullish sources expecting prices to bre ach RMB18,000/tonne ($2,703) by the end
        of this week.

        ―It‘s being very difficult to secure supplies of manganes e carbonate and there is a tight supply for
        sulfuric acid. Increases in production costs have pushed the metal‘s price upward and the trend is
        expected to persist for some more weeks as low capacity utilization is showing no signs of
        improvement,‖ said a producer in Hunan province.

        Export offers have also surged to $3,350 -3,400/tonne basis FOB China via legal routes, while material
        shipped from Vietnam with the 20% export tax evaded is at only $3,200/tonne basis CFR Rotterdam.

        ―Enquiries from western customers have increased after the holiday. European buyers have become
        active again and are asking for both spot material in Rotterdam and prompt s hipments from China.
        However, Chinese export offers via legal routes remain hard to find much acceptance and c heaper
        material via Vietnam and other sources is still favorable,‖ said an export trader.


                                                                                              EMD                                                                       back to index

        Delta EMD Falls After Ending Talks to Sell Last Remaining Unit
        Bloomberg, 25/10/10

        Delta EMD Ltd., which supplies electrolytic manganese dioxide used to make dry cell batteries, fell in
        Johannesburg trading after the company ended talks to sell its last remaining operation.

        The stock slipped 35 cents, or 3.2 percent, to 10.50 rand as of 9:55 a.m. local time, extending a 3.7
        percent decline on Oct. 22.

        The "level of offers received" for its South African business and unc ertainty in the global mark et fo r
        electrolytic manganese dioxide meant that "better shareholder value will be realized by the termination
        of the process," it said in a statement to the South African stock exchange today.

        .




  Manganese Matters n° 17 (Issued October 26, 2010)                                                                                                                                       46
The IMnI does not acc ept any responsibility for information, views or opini ons c ontained i n the articles reprinted i n Manganes e Matters, whic h are solel y thos e of the publications credited.

				
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