Allocations of $825 Billion Stimulus Bill

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					                                                                        MANGANESE MATTERS
                                                                                             January 29, 2009 - Issue n° 2


Table of Content                          3



IMnI Upcoming Meetings


ExCo Meeting
Thursday, February 12, 2009
2 to 4PM
By Telecon
                                                             The Manganese Health Research Program (MHRP) is an ambitious
Mn Sustainability Strategy Workshop                          research program on the effects of manganese on human health.
Monday, February 16, 2008                                    Spearheaded in 2002 by the International Manganese Institute and
8:30AM to 5PM
Paris                                                        supported by US Congress and the US Military Operational Medicine
                                                             Research Program, the MHRP has received a total of $5.05 million in
REACH Technical Working Group
Tuesday, February 17, 2008
                                                             US government funding. The MHRP will be ending in January 2010.
9AM to 1PM                                                   This year’s Showcase Conference, June 24-25, aims to highlight the
Paris                                                        results of the MHRP-funded projects, determine data gaps and set
OHES Committee Meeting                                       new directions for Mn-health research.
Tuesday, February 17, 2009
2 to 5PM
Paris

Board Meeting
Thursday, February 19, 2009
10AM to 1PM
Paris

REACH Steering Committee Meeting
Thursday, February 19, 2009
2 to 5PM
Paris

Statistics Committee Meeting
Wednesday, March 25, 2009
9 to 10:30AM
Hong Kong

M&C Committee Meeting
Wednesday, March 25, 2009
2 to 4PM
Hong Kong




IMnI
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75001 Paris
France
Tel : +33 (0) 1 45 63 06 34
Fax : +33 (0) 1 42 89 42 92
E-mail : info@manganese.org
Web site : www.manganese.org



            Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                                 1
  The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
                                                           UPCOMING CONFERENCES


                                                                                                      th
                   Ryan¹s Notes Metallics Meeting                                                 10 Asian Ferro-Alloys
                   January 26-27, 2009                                                            March 25-27, 2009
                   Miami, FL                                                                      Hong Kong

                   Ferro-alloys.com                                                               IMnI 2009 Annual Conference
                   May 24-27, 2009                                                                June 7-9, 2009
                   Beijing                                                                        Dubai

                   MHRP Showcase Conference                                                       INFACON XII
                   June 24-25, 2009                                                               June 6-9, 2010
                   Washington D.C.                                                                Helsinki




          Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                                 2
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
                                                                    TABLE OF CONTENTS


          ASIA (OTHER)



          CHINA

                  Chinese ferroalloys weekly roundup ............................................................. 22/01/09
                  China’s FeMn prices up 16%, tracking steel market rally .............................. 21/01/09
                  China to push forward national stockpiles of rare metals and minerals ......... 16/01/09


          INDIA

                    Indian metal market report: Plans afoot to protect ........................................ 27/01/09
                    India could ban chrome and manganese ore exports ................................... 27/01/09
                    Indian ferro-alloys roundup ........................................................................... 23/01/09
                    India's Mn ore producers oppose export ban ................................................ 23/01/09
                    No demand for manganese ore in Indian markets ........................................ 22/01/09
                    Indian market report: Ferro-alloy markets go quiet ....................................... 20/01/09
                    Indian ferro-alloys roundup — Markets pause for reflection .......................... 16/01/09
                    Asansol Alloys to set up a silico-manganese plant ....................................... 16/01/09


          OCEANIA

                  ConsMin attacks head OM ........................................................................... 19/01/09


          EUROPE

                  European silico-manganese prices fall 20%.................................................. 28/01/09
                  European ferro-manganese market slides to a slump………………………… 28/01/09
                  Eramet makes further output cuts................................................................. 21/01/09


          CIS

                  Ukraine ferroalloys production falls in 2008 .................................................. 19/01/09


          AFRICA & MIDDLE EAST

                    Gabon forecasts 25% cut in ’09 manganese production ............................... 27/01/09
                    Manganese-ore smelter Transalloys to close for two months ....................... 26/01/09
                    South Africa metals firms face jump in production costs ............................... 26/01/09
                    Ivory Coast manganese ore exports up 87% in 2008 ................................... 20/01/09


          Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                                 3
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
          AMERICAS

                    U.S. ferro-alloys market writes off Q1 as demand sinks further…..…………. 28/01/09
                    Duration of Autlán plant idling unclear .......................................................... 27/01/09
                    Vale ups manganese output, trims ferroalloys in fourth qtr. .......................... 26/01/09
                    U.S. steel production heads back down........................................................ 21/01/09
                    US ferromanganese tags may have hit bottom, traders say ......................... 20/01/09
                    US FeMn prices stabilise losses, steel recovers ........................................... 19/01/09
                    Obama stimulus lacking adequate infrastructure spend – AISI ..................... 19/01/09
                    Essar will mine Fe, Cr, Mn ore in Brazil ........................................................ 19/01/09
                    DNSC concludes ferro-alloy sales programme ............................................. 16/01/09


          GENERAL INFORMATION

                    Ryan’s Notes Weekly ................................................................................... 26/01/09
                    Global steel production down 1,2% in '08, Dec output plunges..................... 22/01/09
                    Macquarie slashes steel production forecasts for 200 .................................. 19/01/09
                    Ryan’s Notes Weekly ................................................................................... 19/01/09
                    MARKET ROUNDUP — Outlook still uncertain for most markets ................. 16/01/09



          OHES & SCIENCE




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


          EMM

                    Chinese electro manganese metal price recovered…………………………… 29/01/09
                    European manganese prices consolidate gains ........................................... 21/01/09
                    Austenitic Stainless Steel Electrode for High Temperature Welding ............. 20/01/09
                    Chinese electrolytic manganese market cools down .................................... 16/01/09




          EMD

                  Panasonic likely to post loss, close plants-Nikkei ......................................... 27/01/09




          Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                                 4
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
                                    THE MANGANESE INDUSTRY


                                                   ASIA (OTHER)



                                                      CHINA

   Chinese ferroalloys weekly roundup - Some markets remain firm despite holiday
   Metal-Pages, 22/01/09

   Despite the approaching weeklong holiday of Chinese Lunar New Year, some ferro-alloy markets,
   particularly ferro-molybdenum, ferro-tungsten and manganese alloys, remain firm on either last minute
   demand before holiday or low stock levels caused by production stoppages.

   Price Movements

   Prices are ex works, VAT duty paid or basis FOB Chinese ports unless otherwise stated. Metal-Pages
   welcomes feedback from producers, traders and consumers; please email china@metal-pages.com or
   phone +86-10-84672874

   Commodities                               Prices today                    Prices last week
   HC FeMn (domestic Mn 75%)                 Rmb8,600-9,000/mt               Rmb8,600-9,000/mt
   HC FeMn (FOB China Mn 75%)                $1,750-1,850/mt                 $1,750-1,850/mt
   SiMn (domestic 65/17 grade)               Rmb7,800-8,600/mt               Rmb7,800-8,500/mt
   SiMn (FOB China)                          $1,380-1,420/mt                 $1,380-1,420/mt
   Mn ore (Aus 44-46% Min)                   Rmb65-70/mtu                        Rmb65-70/mtu
   Ferro-silicon (domestic)                  Rmb5,300-5,500/mt               Rmb5,300-5,500/mt
   Ferro-silicon (FOB China)                 $1,040-1,060/mt                 $1,040-1,060/mt
   Mn flake (domestic)                       Rmb14,000-14,200/mt             Rmb14,300-14,500/mt
   Mn flake (FOB China)                      $2,700-2,750/mt                 $2,700-2,800/mt

   Silicon

   Chinese silicon metal prices have risen strongly during the last couple of weeks, driven by low
   availability of spot material as a significant number of producer remain shut.

   ―The general production level is pretty low, and many suppliers are reluctant to sell off their stocks. But
   some consumers are eager to buy in before the forthcoming Chinese holidays. These factors are driving
   prices to move upward sharply,‖ a trade source said.

   Despite the rapid price rise, many silicon smelters are reported to be reluctant to restart their closed
   furnaces, traders said.

   ―A great deal of producers have yet to restart and they are just offering their stocks,‖ a second trader
   said. ―The reasons could be that they are unsure how long the price rise will sustain or the current profit
   margin is not satisfactory.‖

   China exported a total of 665,460 tonnes of silicon metal in the first eleven months of 2008, up 6.6%
   from 623,981 tonnes exported in the same period of 2007, according to Customs statistics.

   China’s CSG Holdings Co., Ltd, a listed company on the Shenzhen Stock Exchange, launched a
   polysilicon production line with 1,500 tonnes per year of capacity in Yichang of central China’s Hubei
   province, the company has announced.

   European silicon prices have dropped as expected in the past couple of weeks in line with demand in
   the aluminum sector, which has been impacted on the slumping domestic car sector. Free market



Manganese Matters n° 2 (Issued January 29, 2009)                                                          5
       prices in standard secondary aluminium-grade (98.5% grade) (5-5-3) are at €1,900-1,950/tonne basis
       FCA (free on truck), off €50. Better grades of low iron content silicon (4-4-1) are at €2,050-2,150/tonne
       basis DDP (delivered duty paid), also down €50.

       The Chinese domestic market for ferro-silicon has kept stable with prices largely unchanged as
       compared to the previous week. The market activity is slowing down in the approach of the holiday and
       most producers are just concentrating on production for old contracts, sources said.

       The export market of the bulk alloy is reported to remain weak, with few overseas customers sending
       enquiries to Chinese suppliers.

       Manganese

       Chinese silico-manganese prices have been holding steady at a three-month high during the last week
       as the shortage of supply persists.

       ―With the current supply it is hard to meet all demand,‖ a bulk alloy trader said. ―Many producers remain
       cautious about increasing their output as there are too many uncertain factors, particularly whether or
       not the good demand will be sustained after the week-long holiday.‖

       A second trader shared this sentiment, saying: ―The rising manganese ore price has narrowed
       producers’ margin of profit and they have yet to get a clear picture of the pricing negotiations (for the
       first quarter shipments) between Chinese producers and Australian miners.‖

       The majority of market sources expect that the market will stay unchanged in the coming week and the
       next because of decreasing activities amid the Chinese weeklong holiday starting January 25.

       China’s ferro-manganese market has barely moved during the past week, with prices reported at Rmb
       8,000-8,500/tonne ($1,173-1,246 before 20% export tax) for 65% min grade high carbon ferro-
       manganese and $ 1,750-1,850/tonne FOB for 75% min grade high carbon material.

       Medium carbon ferro-manganese with 78% min Mn content and 2% max C is around $2,100/tonne
       FOB, a survey of market participants found.

       China, the world largest consumer of manganese ores, imported a total of 7.0752 million tonnes during
       January-November 2008, up 19.83% as compared to 5.9011 million tonnes imported in the same period
       of 2007. Main suppliers in the Jan-Nov period were Australia, South Africa, Gabon and Brazil.

       China’s electrolytic manganese market has returned to the downward path as demand quietens and the
       earlier fast-moving price hikes fail to find much acceptance from consumers.

       ―There is flat demand from both domestic and overseas end-users. The production level of 200 series
       stainless steels is at one of multi-year lows though some mills have increased their output slightly,‖ said
       one trader.

       European manganese flake prices have consolidated higher in the past week, with spot prices ranged
       around $ 2,700-2,800 a tonne basis in-warehouse Rotterdam, with manganese lumps about $ 100
       above that level.

       China’s FeMn prices up 16%, tracking steel market rally
       Metal Bulletin, 21/01/09

       China's ferro-manganese prices have risen an average 16% since the beginning of this year to around
       8,100-8,200 yuan ($1,184-1,199) per tonne.

       Offers as high as 8,700-8,800 yuan per tonne have been reported in the Chinese market, which has
       been encouraged by signs of recovery in the Chinese steel sector.

       However, steel market participants have doubts about the sustainability of the steel market rally.


  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                                 6
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       "I believe the steel price increase has more to do with people's confidence in Beijing's efforts to rescue
       the country's economy, in particular, the 4 trillion yuan stimulus package. No actual measures have
       been implemented, so it is hard to say what result will be achieved," a steel analyst in Beijing said.

       Ferro-silicon saw a wider and higher price range of 5,500-5,900 yuan per tonne this week.

       At the same time, the export market for both alloys has remained quiet overall since the beginning of
       this year, although a ferro-silicon exporter in Gansu province reported a modest pickup in enquiries and
       recently higher transaction prices at $1,100 per tonne fob as against $1,070 per tonne fob at the end of
       last year.

       China to push forward national stockpiles of rare metals and minerals
       Metal-Pages, 16/01/09

       China is pushing forward its national stockpiles of oil and rare metals and minerals, according to the
       newly announced "National Mining Resources Plan for 2008-2015".

       "Stockpiles of mining resources are very necessary especially when there is strong demand for
       resources and a big economic fluctuation," said a spokesperson at China's Ministry of Land and
       Resources. "In view of the current economic situations and market conditions, it is a very good occasion
       to carry out the stockpiles, which will be help protect our mining resources."

       According to the Plan, China will set up stockpiles of oil and rare metals and minerals including copper,
       chrome, manganese, tungsten and rare earths etc. Meantime, the Chinese government will set up an
       efficient management mechanism, which is designed to enable both authorities and local enterprises to
       take part in the stockpiles.


                                                                                           INDIA

       Indian metal market report: Plans afoot to protect the reviving domestic market
       Metal-Pages, 27/01/08

       The Indian steel ministry has decided to push for a 10% import duty on steel items from the present five
       and is expected to make a decision in a couple of days. If 10% duty is levied, imports would become
       costlier and the consuming industry would prefer procuring the commodity from the domestic markets.

       Domestic demand is already reviving, according to reports, and things are looking a bit better this week.
       Although this is yet to be reflected in prices, companies are happy as rising demand will lead to better
       cash flows, helping them meet their working capital needs.

       Domestic steel producers had cut production to the tune of 25% in November 2008 due to low demand
       from sectors like the automotive and consumer durables. The cut prevented further inventory pile-up,
       and as a result demand and supply has been rebalanced. Indian steel mills can now operate at 80-85%
       capacity provided there is no dumping of cheaper steel from abroad.

       The country’s iron ore exports also surged 38% to 13.6 million tonnes (mt) in December 2008 as
       compared with 9.8 mt in December 2007. According to figures compiled by the Federation of Indian
       Mineral Industries (FIMI), iron ore exports in April-December 2008 fell 5.4 per cent to 64.47 mt from
       68.15 mt in the corresponding period of 2007. China accounts for about 90% of India’s iron ore exports.
       Iron ore stocks in China have come down from a high of 80 mt in October to 60 mt. This has resulted in
       good demand for iron ore from exporting nations, including India. The reduction in export duty has also
       helped.

       MANGANESE ALLOYS

       There has been a slight rise in ferro-manganese and silico-manganese prices as compared to last
       month. The upward trend is due to buying from China and also low inventories, although the domestic

  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                                 7
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       market has remained relatively steady. At times when the market had appeared dead but buying in
       small quantities has sustained the domestic players who confirm that spot sales rather then long time
       deals are the way to go.

       CHROME AND MANGANESE ORE

       The Indian ferro-alloys producers' association has called for a ban on export of chrome and manganese
       ore. This is attributed to the concerns of a large-scale shortfall of the mineral’s supply which has hit the
       domestic stainless steel and ferro-chrome industries. The decision was reached after seeing huge
       companies like Tata Steel Ltd, the country’s largest producer and exporter of chrome ore, stopping the
       supply of ore to domestic users and, instead, utilizing the material for its own expanding ferro-chrome
       and chrome concentrate production. Manganese ore producers are doing the same. Concern over
       supply of minerals is leading the domestic ferro-alloys industry to try and safeguard itself against raw
       materials shortage.

       INDIA DOMESTIC PRICE INDICATORS:

       Product                                                 Prices today                                                   Prices last week
       HC FeMn (Mn 70%)                                        INR49,000-55,000/tonne                                         INR49,000-55,000/tonne
       SiMn (Mn 60%, Si14%)                                    INR35,000-40,000/tonne                                         INR38,000-40,000/tonne
       HC FeCr (Cr 60%)                                        INR35,000-40,000/tonne                                         INR35,000-40,000/tonne
       FeSi 75%                                                INR 47,500-49,500/tonne                                        INR 47,500-49,500/tonne
       Cr Ore (48-49.99%Cr2O3)                                 INR 4,976/tonne (OMC price)                                    INR 4,976/tonne (OMC price)
       Mn Ore (49.5%)                                          INR13,405/ tonne (Moil price)                                  INR13,405/ tonne (MOIL price)

       India could ban chrome and manganese ore exports
       Metal-Pages, 27/01/09

       After calling for a ban on iron ore exports, India's ferro-alloy producers' association is now requesting
       the country's government to put a ban on exports of chrome and manganese ore.

       The move is prompted by the increasing shortage of ore in the domestic market, although some ferro-
       alloy producers are against the proposed ban.

       According to the government data, last year the Indian ferro-alloys industry used only a small part of its
       total production capacity of 320,000 tonnes (including manganese alloys, ferro-silicon and chrome
       alloys). "This fiscal too it will remain at this level, as ferro-alloy imports have reined in our capacity
       utilisation," T.S. Sundaresan, Secretary General of the Indian Ferro Alloy Producers Association told the
       press.

       However imports of ferro-alloys are not worrying the producers as much as the increase in the volume
       of India's ores being exported, which is forcing them to import these raw materials at higher costs.

       India's ferro-alloys industry is estimated to have imported about 528,000 tonnes of manganese ore in
       the last three years, valued at a total of about INR 3.95 billion. During the same period, the manganese
       ore industry exported a total of 702,000 tonnes, valued at about INR 1.61 billion.

       "If the manganese ore producers had not exported this quantity and had instead made it available to the
       domestic ferro alloy industry, it would not have imported the ore that had resulted in a forex outgo of
       INR 3.95 billion in the last three years," Sunderesan told the press.

       Considering the projected increase in steel production and the corresponding rise in demand for
       manganese alloys, the industry is estimated to require 2.6 million tonnes of the ore by 2011-12 to
       produce the required quantity of ferro-alloys. The miners of this ore are mostly government-run, such
       as the Orissa Mining Corporation and Manganese Ore India Ltd.

       Chrome ore is another vital raw material required to make ferro-chrome and there is only one major
       producer of this ore — the Orissa Mining Corporation. Chrome ore is used to make high carbon ferro-
       chrome, which is a non-substitutable raw material in making stainless steel.

  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                                 8
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       Industry sources say that during the last three years, about 12,500 tonnes of chrome ore, valued at INR
       0.16 billion, was imported into India. During the same period, the country's chrome ore miners exported
       more than 30,000 tonnes of the ore. "The chrome ore industry produces about 3 million tonnes
       annually, out of which more than 1 million tonnes is exported in the form of ore and concentrates. If
       exports continue, the reserves of the proved category may deplete in another 10 years," an industry
       source revealed.

       Indian ferro-alloys roundup
       Metal-Pages, 23/01/09

       The Indian alloy market is driven by exports and demand from steel mills. However India’s biggest
       market China is on a holiday and though Indian stainless steel prices have shown a rise, demand is
       quiet.

       The increase in stainless steel prices is attributed to increasing prices of nickel. Actual demand for has
       not recovered yet, but the market thinks that the current price level may already be the bottom in the
       short term.

       As steelmakers are not buying raw materials, but traders said they were optimistic in their outlook as
       demand may pick up after Chinese New Year. People are opting to buy from the spot markets rather
       than inking any forward deals. However when demand revives there will be a severe shortage of
       stocks. Right now steelmakers have very low inventories which they will need to build up once demand
       revives.

       MANGANESE ALLOYS

       The price of silico-manganese has seen a slight improvement over December prices, but this isn’t a
       major correction in any way. Prices are in the range of INR 38,000-40,000/tonne ($770-811/tonne) ex
       works for silico-manganese 60/14 and INR 48,000-52,000/tonne ($973-1054/tonne) ex works for high
       carbon ferro-manganese 70% for the moment. Unlike that of silico-manganese, the price of high carbon
       ferro-manganese has been stable. There is no buying reported, and domestic markets are stable for the
       moment, however the speculation is that the export markets will pick up in the coming month.

       MANGANESE ORE

       Manganese ore prices at the local markets have seen a little slide and are selling Manganese ore 40%
       for around INR8,500- 9,000/tonne ($173.50-184/tonne). The even lower grade ore is being sold for INR
       4,000 per tonne, but in spite of such low prices is failing to find buyers. The prices are said to have
       reached their bottom limit.


       INDIA DOMESTIC PRICE INDICATORS

       Product                                          Prices today                  Prices last week
       HC FeMn (Mn 70%)                                         INR49,000-55,000/tonne        INR48,000-52,000/tonne
       SiMn (Mn 60%, Si14%)                                     INR38,000-40,000/tonne        INR35,000-40,000/tonne
       Manganese Ore (49.5%)                            INR13,405/ tonne (Moil price) INR13,405/ tonne (MOIL price)

       India's Mn ore producers oppose export ban
       Metal Bulletin, 23/01/09

       India's manganese ore producers strongly oppose a proposed export ban by the Indian Ferro Alloy
       Producers' Assn (Ifapa).

       Ifapa wants to preserve manganese ore for the domestic alloys industry and has directed the call to the
       steel ministry, whose support is needed to persuade the finance ministry to make the change.




  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                                 9
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       A prominent exporter of ore to China and Japan told MB that "certain types of manganese ore with low
       manganese content of less than 34% and high iron content is being bought by foreign buyers but has
       not much demand in India".

       "Even high grade ores with higher phosphorus content can be exported and in its place, ferro-alloy
       producers could import their requirements of low-phosphor ore," he said.

       Manganese ore exports should continue in the wider interests of developing the manganese ore
       industry in India, said manganese ore producers.

       This is supported by the Federation of Indian Mineral Industry, which represents India's mineral
       producers. It is also strongly opposed to any ban on chrome ore exports.

       India has a shortage of manganese ore, particularly high-grade ore. The country produces around 2
       million tpy of manganese ore but needs about 3 million tpy to meet projected steel production of 60-65
       million tpy by 2010, and 5 million tpy for projected steel production of 110 million tonnes by 2020,
       according to official figures.

       No demand for manganese ore in Indian markets
       Metal-Pages, 22/01/09

       The Indian manganese ore market remains relatively flat with prices on the lower side and the market
       does not expect to see any great correction in the coming days.

       A source reported that prices for manganese ore in the local market were low, at INR 8500-9000 per
       tonne ($173-183 per tonne). Deliveries of local manganese ore 40% were almost non-existent. "Most
       smelters of manganese alloys are only running part of their capacity, so the demand for manganese ore
       will not improve in the coming days," explained the source. However according to him prices of imported
       ore remain high, but the demand still remains sluggish.

       Another miner, whose output is around 2000 tonnes per month, has reduced its output and slashed
       jobs. He confirmed that demand was very low for local ore of 25%-30%. He is offering the local ore at
       INR 4000 per tonne ($81.5 per tonne) ex works. At these prices not many deals are still being
       concluded according to him.

       "There is no demand from Indian smelters and overseas buyers, which may last in the coming months,"
       said another market trader. "However, I do not think the price of manganese ore will go down since the
       current price has already touched its bottom line," he added.

       Any further price decline will spell absolute doom for the industry which is already hanging on by a thin
       thread. However the market sources are of the opinion that the manganese ore prices have reached
       their bottom and there will be no further decline.

       Indian market report: Ferro-alloy markets go quiet
       Metal-Pages, 20/01/09

       Last week began on a positive note for the Indian metal industry, but with decrease in the demand for
       iron ore and steel as car makers cut down production the market failed to keep up its momentum.

       The positive start of the week was attributed to increase in the shipment of iron ore into China, but as
       being anticipated by many in the industry this is not being sustained. Chinese demand for iron ore has
       declined as with carmakers such as General Motors cut output.

       Iron ore inventories held at ports are also falling, although a greater share of the Chinese stockpile now
       originates in India, as China has increased the shipment of iron ore from India to reduce its dependence
       on Australian or Brazilian ore. Despite expectations that the falling inventories in China would prompt
       fresh shipment of iron ore from India, this is yet to happen.




  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               10
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       The Chinese New Year just around the corner will mean a long holiday and reduced shipments of
       material from India, and the markets are expected to stay quiet for a while.

       MANGANESE ALLOYS

       Indian manganese alloy market seems to be stable for the moment, with prices firm at INR40,000/tonne
       ($812.50/tonne) ex works for silico-manganese 60/14 and INR55,000/tonne ($1,117/tonne) ex works for
       high carbon ferro-manganese 70%. Market participants believe the price will keep at this level in the
       coming week. The export market may pick up a little in the coming month.

       Indian ferro-alloys roundup — Markets pause for reflection
       Metal-Pages, 16/01/09

       Ferro-alloy producers in India are once again unsure which way the markets are heading.

       There was a flash of hope when manganese alloy prices picked up a week ago, but that was a
       temporary phase, riding on buying from China. The markets are not faring too well again, especially
       where ore is concerned.

       However analysts feel that there is only so much hammering the ferro-alloys market can take, and that it
       is bound to bounce back at some point of time. That time might not be long in coming.

       A recent Reuters report quoted Ian Henderson of JPM's Global Natural Resources Fund saying that
       demand from China and India will support metals such as ferro-chrome and molybdenum, already hit by
       falling demand from steel mills. Their production is often dominated by a limited number of producers.
       "In some cases, because of the dominance of South Africa in terms of supply, we think that these
       commodities can snap back," said Henderson.

       MANGANESE ORE

       Indian manganese ore miners are thinking of curbing their production. There are no buyers in the
       market and smelters are idle. Miners have built up huge inventories and are feeling the liquidity crunch.

       CHROME ORE

       Chrome ore is stable where prices and demand is considered. Chinese buying has given the Indian
       market some hope. However it is being speculated that once China reaches its fill of ferro-chrome and
       has enough inventory build up, it will also stop importing from India. Unless and until demand for steel
       does pick up properly in the international markets, Indian producers are skeptical about resuming
       production.

       MANGANESE ALLOYS

       Ferro-manganese and silico-manganese have not been traded actively this week. Indian domestic
       markets are extremely slow.

       Some buying by Indian producers from markets like Bhutan has been seen, due to lower local prices
       there. Generally people are buying to meet immediate requirements and in very small quantities. There
       is no brisk trade reported in domestic markets.

       INDIAN DOMESTIC PRICE INDICATORS

       Product                                                   Prices today                                                   Prices last week
       HC FeMn (Mn 70%)                                          INR 48,000-52,000/tonne                                        INR 48,000- 50,000/tonne
       SiMn (Mn 60%, Si14%)                                      INR 35,000-40,000/tonne                                        INR 35,000 - 39,000/tonne
       HC FeCr (Cr 60%)                                          INR 33,000-40,000/tonne                                        INR 33,000 - 37,000/tonne
       Ferro-silicon (75%)                                       INR 48,000/tonne                                               INR 46,000-48,000/tonne
       Molybdenum Oxide (57% min)                                INR 850 - 1,000/kg                                             INR 850 - 1,000/kg
       Ferro-vanadium (60%)                                      INR 700 - 850/kg                                               INR 700 - 850/kg


  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               11
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       Mn Ore (49.5%)                                            INR13,405/ tonne (Moil price)                                  INR13,405/ tonne (MOIL price)

       NB: Foreign exchange rate at 16 Jan 2009: 1 USD = 48.6145 INR

       Asansol Alloys to set up a silico-manganese plant
       Metal-Pages, 16/01/09

       A private Indian company, Asansol Alloys Pvt. Ltd., has proposed to set up a 12,650 tpy silico-
       manganese plant in Village Nakrajoria, in West Bengal.

       Total project area is 4 acres and the cost of the project is INR 111,046,000 ($2.28 million).

           Facility                                                           Phase-I                          Phase-II                       Total Capacity
           Submerged Arc Furnace to                                          4,750 tpy                         7,900 tpy                      12,650 tpy
           produce SiMn                                                      (3 MVA)

       Manganese ore (19,008 tpy), manganese slag (12,667 tpy), coal (7,821 tpy), coke (1,683 tpy) and
       quartz (3,168 tpy) will be used as raw materials.

       Other consumables required for the project include electrode paste (316.8 tpy), casing sheet (38 tpy),
       MS round (63.3 tpy), lancing pipe (63,360 m), oxygen (63,360 cb m). Silicon-manganese will be smelted
       using a submerged arc furnace, with slag and metal will be tapped at regular intervals. The liquid metal
       will be cast in moulds in thin cakes which will then be broken to require sizes after solidification,
       weighed and packed.

       The project has been granted a no objections certificate (NOC) by the State Forest Department, giving
       way for the approval of the project. Total ground water requirement will be 60 m3/day and permission
       has been obtained from West Bengal Ground Water Resources. Green belt will be established in 1.30
       acres out of total 4 acres of the plant area.



                                                                                       OCEANIA

       ConsMin attacks head OM
       Business Spectator, 19/01/09


       Manganese producer Consolidated Minerals and its Ukrainian billionaire owner Gennadiy Bogolyubov
       are considering requisitioning their own shareholder meeting for the Singapore-based OM Holdings in
       an attempt to reverse the recent shareholder vote.

       ConsMin, which built up a 12 per cent stake in OM late last year at a cost of more than $60 million, is
       angry over recent votes that have authorised the distribution of 37 million options to OM executives and
       the addition of new bylaws that strengthen its defence against a bid.

       It says last week’s meeting of OM shareholders generated proxy votes from less than 20 per cent of
       shareholders, which it says reflects its contention that not enough notice was given to investors before
       the meeting.

       ConsMin says it is now considering its ―overall position‖ to ensure the value of its financial investment is
       not further eroded, including the possibility of requisitioning its own meeting.

       It is concerned that the dilutory effect of the 37 million options and the introduction of special takeover
       protection provisions, including the suspension of the clause relating to compulsory acquisition if a
       bidder reaches 90 per cent.




  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               12
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       ConsMin says the new options have no performance hurdles and will dilute shareholder interests by
       around 12 per cent. It estimates the value of the options at around $27 million, with about half of that
       going to OM managing director Peter Toth.

       ConsMin has yet to formally announce advisors, although it is thought to have UBS, which advised
       Bogolyubov on his hotly contested bid for ConsMin, in the background.

       For the moment, this is essentially a legal battle, with ConsMin using the Mallesons Stephen Jaques
       team of David Friedlander and the Perth-based David Perks, and OM using Franklyn Legal. OM is also
       receiving financial advice from Euroz Securities.


                                                                                        EUROPE

       European silico-manganese prices fall 20%
       Metal-Pages, 28/01/09

       The European silico-manganese market has fallen again in the past couple of weeks, with spot prices
       reflecting business levels down to only a low drip of small tonnages, which are being used to
       supplement seemingly plentiful consumer stocks, dealers said on Wednesday.

       Silico-manganese spot prices are around €750-850 a tonne basis delivered, from more than €1,000 a
       tonne.

       ―There will be more downside as Eramet and Ferroatlantica rid stock ahead of their shutdowns, and it
       also sends message that they do not see the market getting better in the short term, or else they would
       have held stock to sell in the coming weeks,‖ a dealer said.

       ―Steel makers may want to take some cheaper material now, but if they don’t they can always buy it
       later, and who’s to say prices won’t be cheaper then?‖

       France’s Eramet and Spain’s Ferroatlantica, which have recently announced major cuts in ferro-silicon
       and manganese alloys, have been offering material at spot prices cheaper than Indian and Chinese
       export offers, dealers said.

       Eramet wants to unload stock ahead of its production cuts, according to industry talk, and has
       announced a 65% cut in production, while Ferroatlantica has said it will cut production 70%.

       The silico-manganese market in China, which is in the middle of a week-long New Year holiday, has
       been steady at some $ 1,380-420 a tonne basis FOB in the past couple of weeks.


       European ferro-manganese market slides to a slump
       Metal-Pages, 28/01/09

       European ferro-alloys prices have fallen again in the past couple of weeks against weak demand in the
       steel sector, which is buying only small amounts in the spot market to supplement their stock
       consumption, dealers told Metal-Pages on Wednesday.

       High carbon ferro-manganese prices are down to €900-1,000 a tonne basis delivered works, from
       €1,100-1,200 a tonne basis delivered works.

       Refined ferro-manganese alloys prices, however, have slumped a quarter, with medium carbon at
       €1,400-1,500 a tonne basis delivered works, from €1,900-2,000 a tonne, while low carbon material is
       around €2,000-2,100, off three hundred.

       ―Europe has been under strong pressure in settlement terms, which have been quoted as low as €870 a
       tonne to ArcelorMittal this month,‖ one dealer said.


  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               13
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       ―However, below €900 a tonne is fairly isolated and most deals have been done at above that level,
       although we would not rule out further weakness in the short term.‖

       In longer term contract negotiations for first quarter settlements, dealers have agreed prices at around
       €1,250 a tonne basis delivered, although there have been much cheaper offers in the spot market
       recently.

       France’s Eramet and Spain’s Ferroatlantica, which have recently announced major cuts in ferro-silicon
       and manganese alloys, have been offering material at spot prices cheaper than Indian export offers,
       dealers said. Eramet wants to unload stock ahead of its production cuts, according to industry talk, and
       has announced a 65% cut in production, while Ferroatlantica has said it will cut production 70%.

       High carbon and silico-manganese is generally busier than refined manganese alloys, which is being
       quoted in a wider range due to more limited business. Major steel firms have been offered material as
       cheap as €1,250 a tonne, and although the bulk of business has been more expensive, the market is
       being further pressured on cheaper Asian offers.

       ―European steel makers have been buying enough ferro-alloys to meet their daily needs in the short
       term, and they already have plenty of stocks it seems. Much of what is being bought is traders’ stocks,
       with little inter-merchant business as the market is too cautious in present conditions," another dealer
       said.

       Dealers said stainless steel business has fallen the most, although it may have reached a bottom, while
       speciality steels have slumped in line with the car industry, which may have further to fall.


       Eramet makes further output cuts
       Metal Bulletin, 21/01/09

       France's Eramet SA announced deeper production cuts in its manganese and nickel divisions for the
       first quarter this year as demand from steelmakers remained weak.

       Eramet Manganese will reduce its output of ore by 600,000 tons in the first quarter to approximately 40
       percent of capacity and cut alloy production by 150,000 tons to roughly 35 percent of capacity. The
       company reduced manganese ore production by 23 percent in the fourth quarter last year compared
       with the same period of 2007, and ore output for all of 2008 slipped 3 percent to 3.25 million tons.

       Manganese alloy production also fell 23 percent in the fourth quarter last year and full-year output
       shrank 7 percent to 708,000 tons.

       "Beyond the first-quarter 2009, Eramet Manganese will continue to adjust ore and alloy output
       according to demand trends. Nevertheless, Eramet Manganese remains able to address a market
       upturn swiftly when it occurs," the company said in a statement.

       Eramet Nickel, for its part, will unveil efforts to reduce costs in February, but given the current sales
       outlook, the division has already lowered production to an annualized rate of 50,000 tons. Eramet
       limited metallurgical nickel production to 51,000 tons last year, a 14-percent drop on 2007.

       The company again said operating income in 2008 would likely come in flat or slightly above the
       previous year, when operating income reached 1.2 billion euros. Eramet said it had more than 1 billion
       euros ($1.3 billion) in cash at the end of last year.

       U.S. subsidiary Eramet Marietta Inc. announced plans earlier this month to shut its special products
       division indefinitely in early March, including ferrochrome operations, take its silicomanganese furnace
       offline for 60 days in mid-March, idle one of two ferromanganese furnaces for 90 days in May and lay off
       110 employees.




  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               14
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                                                                                             CIS

       Ukraine ferroalloys production falls in 2008
       Metal-Pages, 19/01/09

       Ferro-alloys production in Ukraine fell more than 19% year-on-year to some 1.42 million tonnes last
       year, from around 1.75 million tonnes produced in the year before, UkrFa, an association of Ukrainian
       ferro-alloy producers, said in a recently released report.

       In 2008 Ukraine produced 895,000 tonnes of silico-manganese, down almost 27% year-on-year.

       Ferro-manganese production increased about 1.5% to some 362,500 tonnes, while production of ferro-
       silicon fell 30% to less than 153,000 tonnes and production of manganese metal fell 23% to 8,700
       tonnes, UkrFa said.

       Domestic producers cut production heavily in the fourth quarter of last year against weak domestic and
       export demand. Ukraine’s biggest ferro-alloy producer, Nikopol, cut production almost 19% to nearly
       829,000 tonnes last year, from 1.04 million tonnes in 2007.

       Nikopol produced 570,400 tonnes of silico-manganese, down almost 24% year-on-year, and slightly
       above 258,000 tonnes of ferro-manganese, off more than 5%.


                                                                        AFRICA & MIDDLE EAST

       Gabon forecasts 25% cut in ’09 manganese production
       Metal-Pages, 27/01/09

       West Africa’s Gabon is forecasting a 25% cut in manganese ore production due to weaker international
       demand, according to local press reports.

       L'Union quoted Mines and Oil Minister, Casimir Oye Mba, as saying that manganese production, which
       totalled 3.25 million tonnes last year, will probably not exceed 2.5 million tonnes in 2009 after French
       mining company Comilog, Gabon's only manganese miner, blamed falling demand, particularly in Asia.

       Comilog, a subsidiary of France's Eramet, has been forced to cut investment 30% and will stop
       production for up to six weeks this year and lay off some 1,500 workers for three weeks, the report said.

       Manganese-ore smelter Transalloys to close for two months - Afro Minerals
       Mining Weekly, 26/01/09

       Production at the Transalloys manganese-ore smelting operation in South Africa would cease for two
       months because of reduced current market demand, Afro Minerals Trading AG marketing manager
       Patrick Huber said on Monday.

       Huber said in an emailed communique from Switzerland that the reduced current market demand
       provided an ideal opportunity for Transalloys to close, so that essential maintenance and furnace
       rebuilds could be carried out, which were not possible while the plant was operational.

       Transalloys acting services manager and production superintendent Eben Barnardo told Mining Weekly
       Online earlier this months that 80% of Transalloys silcomanganese and medium-carbon
       ferromanganese product was exported, involving the transport by road and rail of some 8 000 t of
       finished product a month to the ports of Richards Bay and Durban.

       Huber said that the market situation would be continually assessed to ensure that stocks were available
       to satisfy customer requirements and to meet company commitments.




  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               15
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       Transalloys, which produced mainly refined silicomanganese and medium-carbon ferromanganese
       alloys at Witbank, was bought from South Africa's Highveld Steel & Vanadium by the Renova group of
       Russia, headed by Viktor Vekselberg.

       Two months was currently the best estimate of the duration of plant closure, and the essential
       maintenance referred to would include work on raw-material feeder systems, conveyors and cranes.

       Huber said that those Transalloys employees who were not required for the maintenance programme,
       would be permitted to take leave for the two-month period, utilising accumulated leave. Any shortfall of
       leave days would be debited against future leave entitlements.

       Renova had planned to build an additional smelting factory at Coega, but owing to the current poor
       market conditions and power-supply uncertainty, the Russian company had the project on hold for the
       time being. Also in the Renova group was United Manganese of Kalahari (UMK), which supplied
       manganese ore to Transalloys for smelting.

       A UMK mine official, Lance Aukette, who said the UMK mine was also part of the Renova group,
       referred Mining Weekly Online to project director Richard Curtis and company executive, Wilrich
       Schroeder, but neither was available for comment at the time of going to press.

       South Africa metals firms face jump in production costs
       Metal-Pages, 26/01/09

       South African metals producers of ferro-chrome, manganese and stainless steel may have to pay much
       more in production costs this year after national power provider Eskom warned of a jump in utility bills.

       Although Eskom is yet to submit its tariff increase application to the National Energy Regulator of South
       Africa (Nersa), the utility has warned that its 343 billion rand ($33.5 billion) capital expansion
       programme will be accompanied by a ―significant‖ increase in tariffs.

       There was controversy last year when Eskom proposed a 53% increase in electricity tariffs.

       However, Eskom chief executive Jacob Maroga said it had yet to finalise an application for tariff
       increases to Nersa. He said Eskom was anticipating a 3% drop in demand for 2008/9 mostly due to
       smelters cutting production in ferro-chrome, and carbon and stainless steel.

       Eskom expected demand in 2009/10 will be flat and expected that level to start increasing above only
       1% the year after.

       Ivory Coast manganese ore exports up 87% in 2008
       Metal-Pages, 20/01/09

       Last year Ivory Coast exported 176,561 tonnes of manganese ore, a jump of 87% on the 94,618 tonnes
       shipped the year before, official port data showed this week.

       Shipments are up due to India's Taurian, which started mining manganese late in 2007. However,
       December 2008 exports totalled 15,541 tonnes, down 9% on the 17,018 tonnes shipped in December
       2007.

       No further details were available.

       Last October Taurian Resources considered suspending its manganese mining operations in Ivory
       Coast after the shooting of an employee.

       The attack came two months after the militant Youth Movement for the Renaissance of Bondoukou
       organised violent demonstrations against Taurian to push for more direct revenue from the mine, 320
       kilometres north-east of Abidjan.




  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               16
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                                                                                     AMERICAS

       U.S. ferro-alloys market writes off Q1 as demand sinks further
       Metal-Pages, 28/01/09

       The ferro-alloys market is bracing for a tough first quarter as steel mills report deteriorating market
       conditions and continue to work off high cost inventory.

       Both AK Steel Corp and U.S. Steel Corp. forecast Tuesday that first quarter earnings would be
       impacted by further softness in key end-user markets.

       Confirmation of fresh headwinds facing the carbon and stainless steel sectors is unlikely to bring much
       cheer to the beleaguered U.S. ferro-alloys markets, which has seen prices nosedive amid a major
       slump in sales volumes.

       ―The earnings reports and the forecasts for the first quarter are very concerning and in many ways just
       confirm what most suppliers are experiencing right now,‖ said one ferro-chrome trader.

       ―There have been a lot of furnaces taken down and stock holders continue to run down supplies, which
       is eroding prices.‖

       Domestic raw steel production for the week ending January 24 was 1,025,000 net tons, down 2% from
       the 1,045,000 tons reported a week earlier, as mills operated at a utilization rate of 43.1%, according to
       latest figures from the American Iron and Steel Institute.

       ―It’s really tough out there and there’s very little business across the board. And there’s nothing I’ve
       seen to suggest that this thing is going to turn around in the near-term,‖ said a ferro-alloys trader.

       ―There’s still a lot of high cost inventory being worked down by both the mills and service centers.‖

       Traders believe that prices could face renewed downward pressure in the coming weeks if consumers
       do not start to replenish stocks. But they note that most ferro-alloy prices are now nearing a bottom and
       any downward movement could be minimal.

       Despite the bearish outlook for the first quarter, most traders and analysts are optimistic that the second
       quarter could see service centers and mills come back into the market due to depleted stocks and
       improved order books.

       Independent steel analyst Charles Bradford told Metal-Pages that he is sticking by his previous
       forecasts of a slight up tick in steel demand in the spring.

       ―Actual usage of steel is not that bad, but that’s not to say it’s that good either. The problem has been
       that orders have dropped because a lot of customers are working down high cost inventory. But at
       some point inventory levels will reach a point where customers have to start buying again,‖ he said.

       ―I’ve been saying for the past fourth months that things should pick up in the spring, which is normally
       the time of year we see a turnaround. But that’s not to say that things are going back to where they
       were.‖

       An executive at one ferro-alloys producer agreed and said that steel mills will be forced back into the
       market at some point, which could lift prices as supplies dwindle due producer cutbacks and merchants
       refusing to bring in replacement material.

       ―There has been a lot of cutbacks by the producers and many mills are getting close to running
       extremely low inventory levels of both raw materials and finished products,‖ he said.

       ―So any increase in demand will reverberate across the supply base and probably have a fairly
       immediate affect because stocks are low and the material will be required quickly. A lot of people seem
       to think this could happen in the second quarter, but the big question of course is when exactly.‖

  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               17
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       Duration of Autlán plant idling unclear
       Metal Bulletin, 27/0109

       Mexican manganese producer Minera Autlán SAB de CV is unclear on how long its Gomez Palacio
       ferroalloys plant in the northern state of Durango will remain idled, but the plant's workers will remain on
       payroll, a company spokeswoman told AMM.

       Adverse market conditions led the company to shut down the plant, which has two electrical furnaces
       and accounts for about 14 percent of Autlán’s ferroalloys production, in November, the spokeswoman
       confirmed.

       The company's ferroalloys production has also been cut back at its Teziutlan plant, located in the
       central state of Puebla. That facility has a staff of 300.

       "The global crisis has severely impacted the mining industry, and already in Mexico mining projects are
       being cancelled, plants are closing and work stoppages are planned," according to Mexican mining
       association Camera Minera de Mexico (Camimex).

       Baja Mining Corp., Vancouver, British Columbia, for example, stopped construction of a $540-million
       copper, zinc and cobalt mine in the northwestern state of Baja California Sur, while Minera Nuevo
       Monte SA de CV closed a zinc mine in the state of Hidalgo that had produced 75,000 tonnes a month.
       Cia. Minera del Norte SA de CV (Minosa), a subsidiary of Mexico's largest steelmaker, Altos Hornos de
       Mexico SAB de CV (Ahmsa), also stopped iron ore production at its La Perla division in the northern
       state of Chihuahua for at least six months, Camimex added.

       Vale ups manganese output, trims ferroalloys in fourth qtr.
       Metal Bulletin, 26/01/09

       Brazilian miner Vale produced 491,000 tonnes of manganese ore in the fourth quarter, up a whopping
       316 percent from the same period a year earlier, but cut ferroalloy output by 38.6 percent to 84,000
       tonnes.

       Manganese ore production dropped 29.2 percent compared with the third quarter, however, and
       ferroalloy output fell 35.5 percent.

       Vale closed its manganese ore mines and ferroalloy plants in Brazil in December last year and does not
       plan to open them again until next month. The miner also halted production at its ferroalloy plant in
       Dunkirk, France, in August and will keep it idle until at least April, and has extended maintenance on the
       furnace at the Mo I Rana ferroalloys plant in Norway until June.

       Manganese ore production for the full year jumped 78.7 percent to 2.38 million tonnes, but ferroalloy
       output was down 12.4 percent to 475,000 tonnes (213,400 tonnes of ferrosilicon manganese, 209,400
       tonnes of high-carbon manganese and 51,900 tonnes of medium-carbon manganese).

       Fourth-quarter nickel production totaled 73,200 tonnes, up 1.1 percent from a year earlier as a 56.6-
       percent increase in nickel output at Sudbury, Ontario, offset declines at Sorowako in Indonesia and
       Voisey's Bay and Thompson in Canada.

       Finished nickel production for all of 2008 reached an all-time high of 275,400 tonnes, up 11.1 percent
       from 2007, with Voisey's Bay leading the way with a 31.6-percent increase and Sudbury following with a
       20.6-percent rise.

       Vale said last month it would halt nickel production at the Copper Cliff South Mine in Sudbury in January
       for an undetermined amount of time and stop nickel and copper production at Voisey's Bay in
       Newfoundland in July. Vale also said it would put off development of the $814-million Copper Cliff Deep
       project for a year (AMM, Dec. 5). The company previously announced plans to cut nickel production by
       65 percent in China and by 20 percent in Indonesia.

  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               18
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       Metallurgical coal production was down 7.2 percent to 703,000 tonnes in the fourth quarter compared
       with a year earlier, but jumped 59.2 percent to more than 2.8 million tonnes for the full year.

       Vale's iron ore production fell 21 percent to nearly 63.3 million tonnes in the fourth quarter, while output
       for the full year slipped 0.5 percent to 301.7 million tonnes, the company's first drop in annual output
       since 1999.

       According to press reports, Vale plans to invest $14 billion this year compared with $10 billion in 2008,
       and expects a rebound in demand this year despite an ongoing global economic slump.

       U.S. steel production heads back down
       Metal-Pages, 21/01/09

       Production of raw steel in the United States has fallen back down after two weeks of rising output
       against a background of waning demand.

       Domestic raw steel production for the week ending January 17 this year totaled 1,045,000 tonnes, down
       1.6% from 1,062,000 tonnes the week prior, according to latest figures from the American Iron and
       Steel Institute.
       Mills in the U.S. operated at a capability utilisation rate of 43.8% compared with 44.5% the previous
       week.

       For the year-to-date, production through January 17 was 2,479,000 tonnes at a capacity utilisation rate
       of 42.6%. That is a 52.6% drop from 5,229,000 tonnes in the same period last year, when the capability
       utilization rate was 90.3%.

       US ferromanganese tags may have hit bottom, traders say
       Metal Bulletin, 20/01/09

       Prices for ferromanganese and silicomanganese in the United States are now less than half what they
       were only a few months ago, but some traders and producers think they may have touched bottom and
       are moving up slightly.

       "Demand is obviously not good and prices are down considerably," a New York trader said. "We're
       seeing some bottoming out, but maybe only because (ferroalloy) producers won't go any lower."

       Sources quoted current spot market prices of 47 to 52 cents a pound for silicomanganese, $1,250 to
       $1,350 a tonne for high-carbon ferromanganese and $1.25 to $1.50 a pound for medium-carbon
       ferromanganese.

       At the start of the fourth quarter, AMM reported prices of $1.08 to $1.13 pound for silicomanganese,
       $3,100 to $3,200 a tonne for high-carbon ferromanganese and $2.33 to $2.40 a pound for medium-
       carbon ferromanganese.

       "No one is making money at these prices and everyone is holding out," a source at a domestic producer
       said. "I'd rather stockpile material than sell at this price."

       However, he predicted prices would go up a tad in the first quarter and then improve further in the
       second quarter, although they aren't likely to reach last year's levels. "We're already seeing a bit of a
       creep," he said. "I expect a little bit of a bounce in February and I'd be surprised if silicomanganese
       wasn't 60 cents a pound by then. It's still a crap number, but it's survivable."

       However, a lack of visibility has turned the market into a guessing game, the producer source said. No
       new business is coming in, larger buyers are holding off on making commitments and suppliers are
       unwilling to sign long-term deals at current prices. "I wouldn't commit to 50 cents a pound. There's no
       way. No one wants to tie themselves in at these prices," he said.




  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               19
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       "I would love to lock in long-term contracts at current prices but the suppliers won't do it," said a
       purchasing agent at a U.S. steelmaker. "They obviously expect prices to go up."

       Volumes have declined along with prices as steel mills limp along at less than half of production
       capacity. Producers, traders and buyers said quantities have plunged 60 to 70 percent since the
       beginning of 2008.

       "The first quarter is already a write-off but things have to get better because they can't get much worse,"
       the trader said, "but until I see real proof that demand is back, it's hard to be optimistic."

       The purchasing agent said his company was buying roughly half the amount of ferroalloys it bought at
       the same time last year and at greatly reduced prices. "We predict we'll need 50 percent less than
       normal, but that could change," he said. "In the short term, I don't see an increase in steel demand. In
       the long term, well, everything goes up in the long term. Is this the bottom? We've seen
       silicomanganese go down to 27 cents a pound, so I don't know."

       A source at one North American producer said his plant is running at 50-percent of capacity, but he
       expects it to crank back up to 100 percent in the next few weeks with an eye on the Chinese market,
       while another producer recently announced plans to idle its silicomanganese furnace for 60 days in mid-
       March and turn off one of two ferromanganese furnaces for 90 days in May.

       "If they cut production by 50 percent, they're just now getting in line with demand," the purchasing agent
       said. "No one was swift enough or aggressive enough," he said of the wave of production cuts by
       steelmakers and raw material producers. "The decisions are now much more difficult and there's no
       visibility."

       "The question is whether these cutbacks are deep enough," the trader said.

       "Our inventories were pretty low through September last year, but then our order book dropped off a cliff
       in the fourth quarter," another domestic producer said. "No one has any foresight beyond a week or so."

       The first producer said the market commonly goes through such cycles and things would eventually pick
       up, as they do every 10 years or so. "We're like a ship adrift on the ocean, just waiting for a good, stiff
       breeze," he said.

       US FeMn prices stabilise losses, steel recovers
       Metal-Pages, 19/01/09

       Spot ferro-manganese alloy prices in the United States have been steady in the past couple of weeks,
       stabilising losses that saw the market fall more than a third since November as domestic steel mills cut
       production against slumping demand, dealers told Metal-Pages on Monday.

       Medium carbon material is around to $ 1.30-1.45/lb basis delivered, while high carbon ferro-manganese
       has steadied at $ 1,500-1,550 a long ton basis delivered.

       There had been increasing signs that US bulk alloys prices may have reached a floor after heavy losses
       in recent months, with lead times for flat steels, such as hot-rolled and old-rolled coils, now pushing out
       to March. Steel coil prices have increased some $ 10-15 a short ton to an average of some $ 560 a
       short ton in the States this month, dealers said.

       ―Steel makers have increased their steel prices in response to their customers returning,‖ one dealer
       said.

       ―It’s not been a big recovery in demand, although it’s a trend they see persisting in the coming weeks as
       inventories have been run down since the last quarter.‖

       According to the American Iron and Steel Institute, US steel mills worked at some 44.5% of capacity in
       the week ending the 10th of January, from only 36% in the week before. US liquid steel production
       increased almost 200,000 short tons to 1.06 million tons, from 866,000 tons.


  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               20
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       Yet that steel production increase is partly due to increased production after year-end seasonal holiday
       maintenance, said dealers, who are cautious about the strength of any recovery.

       ―It is a positive sign (steel price increases), although we should not get carried away,‖ another dealer
       said.

       ―Steel production in the States is still well down from more than 90% production rates 12 months ago
       and the ferro-alloys spot markets are quiet, while the longer term deals have been even quieter.‖

       Dealers pointed to recent news that the world’s biggest steel maker, ArcelorMittal, will shut one of its
       North American furnaces in Ontario, Canada, on Monday until April.

       The US economy has officially been in recession since December 2007, according to the National
       Bureau of Economic Research, the US committee of economists responsible for dating the country’s
       business cycles.

       Obama stimulus lacking adequate infrastructure spend – AISI
       Metal-Pages, 19/01/09

       Leaders of the steel industry have slammed the $ 825 billion economic stimulus package unveiled by
       the incumbent Obama administration for lacking adequate funding for infrastructure programs.

       The American Iron and Steel Institute (AISI) said it was disappointment that the transportation
       infrastructure portion of the bill only accounts for 11% of the overall funding and is a concern for not only
       the steel industry, but manufacturers in general.


       ―Over the past few weeks, economists across the board have noted that the best way to create jobs and
       return our economy to vitality is to spend federal money on roads, bridges and other infrastructure
       projects, which would help to put people both in manufacturing and construction directly back to work,‖
       said Thomas J. Gibson, president and ceo of AISI.
       ―Not recognizing the importance of this is a grave oversight. We would like to see the portion of the
       stimulus bill designated for public works projects to be significantly expanded.‖

       Under the two-year plan approved last week, the administration is set to apportion $ 90 billion towards
       modernizing roads, bridges, transit and waterways.

       The U.S. steel industry has been hit hard by the fallout of the economic slowdown with production
       across the sector being curtailed.

       Production of raw steel in the United States totaled 1,062,000 net tons for the week ending January 10,
       while mills operated at a utilization rate of 44.5%.

       Participants in the ferro-alloys market, which supplies into the carbon and stainless steel industry, told
       MP last week that any government-backed works program would take time to filter through to the supply
       base.

       They also noted that any positive impact from the infrastructure rebuild could be more than offset by an
       on-going slump in other key end-user sectors such as automotive and commercial construction.

       Meanwhile, the Buy America Coalition, which includes the AISI, said it supported new legislation that
       would require all federally funded construction projects to use 100% American-made steel products.

       Essar will mine Fe, Cr, Mn ore in Brazil
       Metal-Pages, 19/01/09

       Indian steelmaker Essar group has acquired mining concessions from the Departmento Nacional de
       Producao Mineral, Government of Brazil in Amapa, North Brazil.

  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               21
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       This will help the company to cater to its proposed steel plant in Trinidad & Tobago in the South
       Caribbean, since the proposed site is close to the Brazilian deposits. The 2.5 million tpy steel plant in
       Trinidad & Tobago is part of the group's plan of achieving a capacity of 20 to 25 million tonne by 2012
       from the present level of 8 million tonne.

       Essar will go ahead with a full-scale mining licence based on results of the exploration. The exploration
       survey is expected to take around six to eight months, and, as part of the concession, Essar will be able
       to conduct exploratory mining for iron ore, manganese ore, chrome ore or any other available mineral.
       The area that Essar has earmarked for exploration measures 7,851.69 hectares and is one of the larger
       deposits in the district.

       DNSC concludes ferro-alloy sales programme
       Metal-Pages, 16/01/09

       The U.S. Defense Logistics Agency - Defense National Stockpile Center (DNSC) has announced the
       conclusion of its Strategic Supply Alliance (SSA) sales programme for ferro-alloys, DLA-
       FERROALLOYS-001.

       Below is a summary of the SSA sales program for ferroalloys since its beginning in February 2008
       through January 2009:

       Type                                             Amount Sold (ST: short tons)
       Ferromanganese                                   5,001 ST

       For more information concerning the SSA, please visit the DNSC website at https://www.dnsc.dla.mil.

                                                                       GENERAL INFORMATION

       Ryan’s Notes Weekly
       Ryan’s Notes, 26/01/09

       False optimism on bulk ferroalloys?

       The conventional wisdom in the bulk ferroalloys market, especially espoused by sellers, is that the
       market has finally leveled off and the next move, whenever that happens, will be up. However, not
       everyone is sold on that concept. "I keep hearing that replacement costs, especially from China, are
       higher and there is no material in the pipeline," one buyer said. "However, when I tender I keep getting
       lower, albeit not much lower, prices."

       The problem is that not everyone is concerned about replacement costs. There is a significant amount
       of unsold material available that must be sold first. And, the people holding the stocks are taking any
       opportunity to sell them. In addition, producers and their agents don’t have to worry about replacement
       costs.

       In the US, merchants only make up a minority of total suppliers and most of the mills get their bulk
       ferroalloys directly from producers or agents. "Producers price their material differently," one consumer
       said, "depending on their inventory situation, market share and customer relationship. Replacement
       costs don’t really apply." In the US, a mill reportedly purchased 75% ferrosilicon at around 60¢, ex
       warehouse, well below replacement cost.

       An Italian mill, ABS, reportedly has given suppliers an ultimatum— either renegotiate the terms of the
       existing contracts or don’t get paid for outstanding invoices. The mill said that it has encountered difficult
       business conditions, and it was unable to pay outstanding invoices dating back to November. "We
       delivered the material in September and waited the normal
       60 days to get paid, but we never got paid," one supplier said. "Now we get this letter. This is extortion."

       Low FeSi prices in the EC


  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               22
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       EC ferrosilicon sellers were complaining about Elkem, saying that the Norwegian producer was
       dumping material at prices well below the market, even for Chinese material. "With the collapse of the
       Icelandic economy and currency, it costs virtually nothing for Elkem’s Icelandic Alloys’ ferrosilicon
       smelter to produce material," one competitor complained. "I am being under priced by €80 per mt.‖

       Eramet Marietta may be revising its cutback plans. Instead of taking its #1 silicomanganese furnace
       offline in mid- March for at least 60 days, the company may continue operating the unit at a reduced
       load. Instead, the company will push forward the date for idling its small #12 high-carbon
       ferromanganese furnace to early March.

       Eramet Manganese was forced to take an even deeper cut in its manganese ore and alloy output. The
       company will reduce its first-quarter ore production in Gabon (Comilog) to approximately 40% of
       capacity, or a 600,000-mtpy reduction (Ryan’s Notes, Jan. 19, p4). On Dec. 9, Eramet said it would cut
       its ore production by 23% in the fourth quarter of 2008, compared with the same period in 2007. For
       2008, Eramet Manganese’s production totaled 3.25-million mt of ore, a slight decrease (3%) from 2007.

       Eramet Manganese will also reduce its manganese alloy production to approximately 35%, a 150,000-
       mt reduction for the first quarter of 2009. Eramet Manganese will continue to adjust ore and alloy output
       according to demand trends.

       It is thought that Eramet never reopened its Sauda high-carbon ferromanganese plant in Norway. The
       facility was shut on Sept. 2, 2008 for what was expected to be 90 days to increase the smelter’s
       capacity. When it finally reopens, Sauda’s high-carbon ferromanganese output will be increased by
       50,000 mtpy, most of which will be converted to medium- and low-carbon ferromanganese.

       Felman Productions was warming up its large silicomanganese furnace last week, and has no current
       plans to take offline either of its two smaller units at least until April.

       The US imported 285,782.1 mt of high-carbon ferromanganese in the first 11 months of 2008 and
       31,191 mt in November—the second highest monthly total in 2008; in the same 2007 periods, US
       imports were 195,853.1 mt and 20,577.3 mt, respectively. Major suppliers in the first 11 months of 2008
       (November 2008 in parentheses) were: South Africa, 154,833 mt (7,887.2 mt); China, 37,398.8 mt
       (1,345 mt); Ukraine, 24,707.3 mt (9,937.4 mt); Korea, 21,636.1 mt (3,298 mt); and India, 20,042.8 mt
       (1,345 mt). Imports from Spain in November were 4,000 mt. US imports of low-carbon ferromanganese
       were 49,875.3 mt in the first 11 months of 2008 and 3,873.9 mt in November vs. 44,801.2 mt and
       1,873.7 mt, respectively, in the same 2007 periods. Major suppliers in November were China (2,300 mt)
       and Mexico (1,073.9 mt). The US imported 92,784 mt of medium-carbon ferromanganese in the first 11
       months of 2008 and 2,617.1 mt in November—the lowest monthly total in 2008; in the same 2007
       periods, imports were 45,523.2 mt and 3,788.7 mt, respectively. The major suppliers in the first 11
       months of 2008 (same 2007 period in parentheses) were China, 39,103.5 mt (10,632.4 mt); South
       Africa, 26,179 mt (20,955.6 mt); Mexico, 11,561.3 mt (8,144.7 mt); Korea, 7,600 mt (3,800 mt); and
       Georgia, 4,481.1 mt. US imports of 55-80% ferrosilicon were 208,280.7 mt in the first 11 months of
       2008 and 10,318.2 mt in November vs. 232,804.8 mt and 13,245.9 mt, respectively, in the same 2007
       periods. Major suppliers in the first 11 months of 2008 (November in parentheses) were China,
       120,678.9 mt (7,873.4 mt); Russia, 53,166.6 mt (1,281.9 mt); Venezuela, 18,950 mt (0); and Canada,
       10,721.9 mt (670.2 mt).

       US imports of silicomanganese were 349,654.9 mt in the first 11 months of 2008 and 31,261.7 mt in
       November vs. 362,804.6 mt and 37,206.9 mt, respectively, in the same 2007 periods. Major suppliers in
       the first 11 months of 2008 (November in parentheses) were: South Africa, 142,707.2 mt (11,233 mt);
       Norway, 72,059.8 mt (11,900 mt) Georgia, 59,802.5 mt (5,599.2 mt); and Australia, 34,782.9 mt (362
       mt).

       Vale closes Brazilian Mn alloy plants

       Vale closed its manganese alloy mines and ferroalloy plants in Brazil in December 2008 and is not
       expected to resume production at these operations until February 2009. The company produced
       475,000 mt of manganese alloys in 2008—213,400 mt of silicomanganese, 209,400 mt of high-carbon
       ferromanganese and 51,900 mt of medium-carbon ferromanganese. Production in 2007 was 542,000


  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               23
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       mt. Vale extended the furnace maintenance shutdown at Mo I Rana until June 2009, while ferroalloy
       production in Dunkerque won’t resume until April 2009 after being closed in August 2008. Manganese
       alloy production in the fourth quarter fell to 84,000 mt—59,000 mt in Brazil, and 21,000 mt at Mo I Rana;
       third quarter output was 130,000 mt. Vale produced 2,383,000 mt of manganese ore in 2008 vs.
       1,333,000 mt in 2007. However, fourth-quarter 2008 output fell to 491,000 mt from 694,000 mt in the
       third quarter of 2008.

       China has allocated the first round of 2009 export quotas for silicon carbide to 91 companies. Atotal of
       107,989 mt of quotas were awarded vs. 107,996 mt to 94 firms in the first round of 2008. The top five
       awardees are: Minmetals, 9,846 mt (10,859 mt in the first round of allocations for 2008), China
       abrasives Import & Export Corp., 7,568 mt (7,414 mt); Ningxia Oceanwide Minmetals Corp., 5,371 mt
       (5,408 mt); Liaoning Jiayi Metals and Minerals Co., 3,793 mt (4,385 mt); and Saint Gobain
       (Lianyungang) Ceramics, 3,485 mt (3,440
       mt). The bid price was around 250-260 yuan per mt.

       Samancor Manganese produced 181,000 mt of manganese alloys (112,000 mt in South Africa and
       69,000 mt in Australia) in the fourth quarter of 2008 vs. 203,000 mt in the third quarter of 2008 and
       209,000 mt in the fourth quarter of 2007. In the second half of 2008, alloy production was 384,000 mt
       vs. 393,000 mt in the same year-ago period. The company’s output of manganese ore was 1,412,000
       mt (755,000 mt from South Africa and 657,000 mt from Australia) in the fourth quarter of 2008
       compared to 1,830,000 mt in the third quarter of 2008 and 1,613,000 mt in the fourth quarter of 2007. In
       the second half of 2008, Samancor Manganese saleable ore output was 3,242,000 mt vs. 3,058,000 mt
       in the same 2007 period. The higher ore output in the second half of 2008 vs. the same 2007 period
       was due to improved mine performance at Hotazel in South Africa and increased availability of rail and
       port capacity.

       Samancor Manganese’s expansion at the Gemco mine in Australia is 77% complete which will add 1-
       million mtpy of additional manganese concentrate output in the first half of 2009.

       Global steel production down 1,2% in '08, Dec output plunges
       Mining Weekly, 22/01/09

       China, a country that doubled its steel output within five years, has become the first country ever to
       produce more than 500-million tons of steel in one year, the World Steel Association (WSA) reported on
       Thursday.

       China’s crude steel output jumped 2,6% in 2008 to 502-million tons, and the country now produced 38%
       of the world’s total steel output, the association, formerly the International Iron and Steel Institute said in
       its latest steel report.

       The world’s total steel production fell by 1,2% last year, however, the WSA reported that 2008 was the
       second consecutive year that more than 1,3-billion tons of steel were produced.

       Apart from Asia and the Middle East, output slowed in all major steel producing countries and regions,
       including the European Union (EU), North America, South America and the Commonwealth of
       Independent States (CIS).

       The global steel output decline started to gain pace from September to year-end, as the recession
       started to affect nearly all major producing countries.

       December’s output plunged by 24,3%, when compared with the same month in 2007.

       The WSA reported that Asia had produced 770-million tons in 2008, which accounted for 58% of the
       total steel production, and was 1,9% more than in 2007.

       South Korea and India recorded increases of 3,8% and 3,7%, respectively. Japan produced 118-million
       tons in 2008, which was 1,2% less than 2007.




  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               24
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       The EU countries produced 5,3% less steel in 2008 than in 2007, with output only reaching 199-million
       tons. The association reported that major steel producing countries, including Germany, Italy and
       France, had recorded reductions.

       North America’s output also fell by 5,5% in the year, with the US producing 91-million tons, some 6,8%
       less than the year before.

       Overall, the CIS showed a decrease of 8,1% in 2008. Russia produced 69-million tons of crude steel,
       which was a 5,4% reduction over 2007, while Ukraine recorded a decrease of 13,1% with year-end
       figures of 37-million tons.

       Macquarie slashes steel production forecasts for 2009
       Metal-Pages, 19/01/09

       Australia’s Macquarie Bank has slashed its steel production forecast almost 10% for this year, in its
       latest report.

       This year’s steel production and iron ore trade are forecast to drop 8% and 5% respectively, compared
       with last year, it said. The bank has cut its respective forecasts 18% and 14% since this time last year.

       In 2009, carbon steel production is expected to fall to 1.232 billion tonnes, from 1.339 billion tonnes in
       2008. Total iron ore seaborne trade is expected to drop to 829 million tonnes, from 870 million tonnes.

       "We are expecting further weakness in commodity prices in the next 6-9 months,‖ it said.

       Major production cuts among steel makers are stabilising and rebalancing markets, but an overhang will
       still prevent strong growth, the report said. However, world recession prospects in 2009 have changed
       the outlook dramatically and prices are unlikely to rebound to last year's highs, it said.

       Ryan’s Notes Weekly
       Ryan’s Notes, 19/01/09

       There wasn’t much demand for bulk ferroalloys in the US last week, but there was a lot of talk about
       them. Ferrosilicon suppliers were warning of higher prices because of a growing shortage of nearby
       material. "No one is replacing because Chinese prices are too high to make it profitable," one merchant
       warned. On the other hand, a large US mill told its ferrosilicon suppliers that it will defer taking any
       material until the end of February due to a lack of business.

       Both high-carbon ferromanganese and silicomanganese tags were being talked up on warnings that
       foreign suppliers weren’t interested in shipping at current levels. Dealers reported higher prices in
       intermerchant trading, but business to consumers has yet to materialize. "It’s hard to justify higher
       prices when the economy is still sinking," one buyer said. "Merchants can intertrade all they want, but
       consumers aren’t interested.‖

       There was very little activity in the Chinese bulk ferroalloy market last week, though a few large
       ferrosilicon smelters held another "crisis" meeting to adopt a new strategy to firm prices. "The Chinese
       feel they are the world’s largest suppliers and can control the market," one analyst pointed out.
       "However, they fail to recognize that the industry is too fragmented for any effective coordination." The
       Chinese government is considering adding manganese to its strategic stockpile.

       DLA did not sell any high-carbon ferromanganese at this month’s BOA sale.

       Ferroatlantica reduced its manganese alloy (high-carbon and medium-carbon ferromanganese and
       silicomanganese) and ferrosilicon production by 70% at its Spanish plants. The plants won’t return to
       normal production until demand improves. The company’s Spanish plants include Monzon, Boo,
       Dumbria and Cee. Ferroatlantica has the capacity to produce 259,000 mtpy of manganese alloys,
       including 38,000 mtpy at its Ferroven plant in Venezuela, 218,000 mtpy of silicomanganese and
       175,000 mtpy of ferrosilicon, including 84,000 mtpy at Ferroven.



  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               25
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       Eramet appears to be slowing down manganese ore production in Gabon. Local sources say the
       French company will only produce less than 2.5-million mt of ore in 2009 vs. 3.25-million mt last year.
       Comilog, Eramet’s manganese mining subsidiary, was being forced to slow investment by 30%, halt
       output for up to six weeks during the year and lay off some 1,500 workers for three weeks.
       "We are facing an exceptionally deep crisis (which) may well extend beyond 2009," Comilog head
       Marcel Abeke was quoted as saying.

       ThyssenKrupp responded last week to objections by a few US stainless producers, led by AK Steel, on
       its request for a free trade zone (FTZ) for its new steel plants in Alabama. ThyssenKrupp pointed out
       that the US steel industry is dependent on ferroalloy imports since there is not enough domestic
       production to satisfy requirements. In fact, ThyssenKrupp anticipates importing 19 dutiable ferroalloys
       and only one ferroalloy, moly, has more than enough domestic production to meet consumption. And, in
       most cases, US production of the necessary ferroalloys is either minimal or nonexistent. For example,
       ThyssenKrupp pointed out that there is virtually no chrome production in the US and that imports
       accounted for 62% of US consumption, with the remaining 38% coming from recycled chromium.
       Therefore, the regular use of, and need for foreign origin of many ferroalloys is commonly accepted in
       the US industry.

       As for moly, even though ThyssenKrupp sources most of its requirements from Chile for its overseas
       plants, the company said that it anticipates the US being a primary source for its US mill. ThyssenKrupp
       also said it is in negotiations with US ferroalloy suppliers and that a significant amount of its raw
       materials for the US mills will be sourced domestically.

       "ThyssenKrupp is committed to sourcing domestically, whenever possible, considering quality,
       availability, reliability and pricing," the company said. "An estimated 73.9% of US value is anticipated for
       stainless steel (44% from US materials) and 55% from carbon steel (34% from US materials.)"

       The company also said that it doesn’t contemplate buying any FTZ imports subject to antidumping or
       countervailing duty orders. "ThyssenKrupp does not anticipate admitting finished steel products into the
       zone in foreign status, but doing so would be consistent with zone procedures," the company added.

       Further, ThyssenKrupp pointed out that other US mills can also ask for a FTZ. "The foreign trade zones
       program is neither intended nor administered in a way to grant exclusive privileges on a first come, first
       serve basis," the company noted. "If the Foreign Trade Zones Board determines…that manufacturing
       stainless and carbon steel under zones procedures is in the domestic public interest, the right to request
       a similar grant of authority is open to other domestic producers."

       Finally, ThyssenKrupp said its US operations will promote domestic steel production; provide a
       significant positive economic impact to the US, the region and the state ($3.7-billion invested, 29,000
       construction jobs, 2,500-2,700 permanent jobs and a $130-million annual payroll).

       "ThyssenKrupp can and wants to be a US producer. The proposed ThyssenKrupp FTZ involves
       displacement on imports with domestic production involving significant value added. Encouraging US
       jobs and investment is a primary goal of the FTZ program. This weighs heavily in favor of FTZ approval
       from ThyssenKrupp," the company concluded.

       Tronox, the only US maker of electrolytic manganese dioxide (EMD), filed for Chap. 11 bankruptcy. The
       filing does not include Tronox’s operations outside of the US, which are based in Australia, Germany
       and the Netherlands. The company has up to $125-million in new debtor-in-possession (DIP) financing
       from its existing lending group led by Credit Suisse. The decision to file was made to address legacy
       liabilities which it incurred when it was spun off in 2006 by Kerr-McGee, which has since been acquired
       by Anadarko. The liabilities include environmental remediation and litigation costs that Tronox was
       required to assume at the time of the spinoff. These liabilities are an obstacle to Tronox's financial
       stability and success. Tronox’s EMD plant is in Henderson, NV.

       OM Holdings (OMH) has apparently won the latest round in its effort to stop Consolidated
       Minerals/Privat from taking it over. At a special shareholders meeting last week, OMH received approval
       that would require a company buying more than 20% of OMH from acquiring more shares without
       making an equal offer to all shareholders. Also, any entity holding more than 5% of OMH would have to


  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               26
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       disclose it. While OMH is listed on the Australian Securities Exchange, it is incorporated in Bermuda
       and so does not have the takeover protection mechanisms extended to public companies incorporated
       in Australia. The anti-takeover measures passed by an 85% margin. OMH said 15% of the votes cast at
       the meeting were against the resolution, 99.8% were from Statford Sun, a company controlled by
       Consolidated Minerals. However, most analysts don’t feel that Consolidated Minerals’ creeping takeover
       attempt has been stymied.

       Delta EMD's second-half 2008 sales volume and selling prices met expectations and provided further
       trading profit improvement over the first half. Sales of Delta’s manganese metal, through its investment
       in Manganese Metal Corp. were strong although volumes sold to steel makers softened late in the year.
       The group's earlier impairment of its share of MMC's net assets was fully reversed during the second
       half, and MMC's results will be reported as a business held for sale as the formal sales process initiated
       during 2008 is expected to conclude during 2009.

       Delta holds a 49% of MMC, with BHP Billiton the majority shareholder. Opportunities for realizing
       attractive values for Delta EMD's Australian assets also remain promising. Reduced steel production
       and battery sales are expected to reduce the group's manganese materials sales volumes this year.

       MARKET ROUNDUP — Outlook still uncertain for most markets
       Metal-Pages, 16/01/09

       There is still uncertainty in most markets as the global economic downturn is affecting consumption of
       metals across virtually all sectors.

       Among the bearish news this week was diversified minor metals trader Wogen posting a loss for 2008,
       having taken a £13.3 million write-down on its inventories of metal built up last year. Traders in the
       minor metal market noted that despite falling prices, they have little choice but to carry stock to fulfill
       orders when they come their way, so taking the hit on their value in recent months has been inevitable.

       The outlook for aerospace metal markets has darkened again, as Airbus forecast lower deliveries and
       orders this year. On a positive note it is planning to resume its A400M programme with an overhauled
       operational structure and has committed to building its first mostly composite plane the A350XWB, by
       announcing the start of construction on its assembly plant.

       In a separate development the UK government appears to have given the green light to the construction
       of the much opposed third runway at Heathrow Airport on conditions that capacity will be limited to
       125,000 flights until at least 2020 and will increase only if airlines get on course to reduce pollution to
       below 2005 levels. This further boosts the move towards replacing old fleets with new generation
       aircraft, and the need for cleaner engines.

       As most other sectors, the aviation industry is currently looking for rescue to China, whose economy is
       still expected to grow by 7%.

       The country's steel industry is currently supporting the global ferro-alloys markets, importing material in
       some cases from India, the CIS and South Africa, and in some cases from the western markets where
       stocks have built up and prices are cheaper than the Chinese domestic market. In Europe and North
       America the picture is still grim. However, there may be a light at the end of the tunnel, after raw steel
       output figures in the United States showed an increase of 22.6% last week.

       Against all this background notably some noble alloy markets are gaining strength: tight supply has
       been driving up ferro-tungsten rapidly in the past week, and ferro-titanium has also staged a recovery,
       with the market heading above $ 3/kg from the $ 2s seen n December. Ferro-niobium was also this
       week reported trading at around $ 40/kg in contrast to the still droopy vanadium market.

       MANGANESE

       European manganese flake prices have edged up again on increased Chinese exporter offers in the
       past week, although domestic demand in the bloc has been persistently subdued amid an economic
       slump that has affected all metals markets, dealers told Metal-Pages on Tuesday.


  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               27
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       European spot prices are around $ 2,700-2,800 a tonne basis in-warehouse Rotterdam, up $ 50, with
       manganese lumps about $ 100 above that level. A couple of sales have been reported at $ 2,850 a
       tonne, although that was for prompt, smaller parcels, dealers said.

       Manganese prices in China, a major exporter to Europe, have increased in domestic spot business due
       to tighter supplies since producers took remedial action to combat a fall in consumption in the steel
       sector.

       MANGANESE ALLOYS

       The bulk alloy markets in the West are expected to be erratic in 2009 as consumers increasingly
       replace long-term deals with spot purchases, dealers said.

       Recent market volatility saw ferro-manganese, ferro-silicon and silico-manganese prices slide from
       multi-year highs in line with demand from key consumers in the carbon and stainless steels sectors, as
       well as China. The alloys are primarily used in construction steel.

       The European silico-manganese market has dropped again in the past few weeks, with spot prices
       ranging slightly above €1,000 a tonne this week as the steel sector has shown little interest in buying
       amid the economic recession and tighter credit controls..

       At the start of the week silico-manganese spot prices were around €1,000-1,100/tonne basis delivered.

       ―The drop in prices has been expected as ferro-alloys producers have responded with cuts in
       production, but stocks are plentiful as steel makers have also cut their production,‖ a dealer said.

       In the US, silico-manganese prices have dropped to 45-47 cents/lb, from 48-52 cents/lb.

       High carbon ferro-manganese prices in Europe meanwhile are down to €1,100-1,200 a tonne basis
       delivered works, from €1,550-1,750 a tonne basis delivered works.

       Refined ferro-manganese alloys prices have also fallen, with medium carbon at €2,000-2,100 a tonne
       basis delivered works, from €2,300-2,400 a tonne, while low carbon material is around €2,400-2,500, off
       a couple of hundred.

       ―Steel makers are buying 50-100 tonne lots periodically from the spot market, and some producers have
       offered material at only €1,050 for high carbon material,‖ one dealer said.

       Some dealers have sold single 50-tonne lots at €1,100 a tonne delivered, although that was fairly
       isolated, they said.

       In longer term contract negotiations for first quarter settlements, dealers have agreed some prices at
       around €1,250 a tonne basis delivered.

       Refined ferro-manganese business has been even quieter, with some producers selling only a lot or two
       since the Christmas holidays. Medium carbon spot business has been reported at some €1,900-
       2,100/tonne, while quarterly settlements have been negotiated at around €2,000/tonne, dealers said.

       In the US, medium carbon material was down five cents this week to $ 1.45-1.60/lb, while high carbon
       ferro-manganese has dropped to $ 1,375-1,425/tonne basis ex-warehouse, from $ 1,600-1,700/tonne.



                                                                               OHES & SCIENCE




  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               28
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                                                                                            EMM

       Chinese electro manganese metal price recovered
       Steel Guru, 29/01/09

       It is reported that the market price of Chinese electrolytic manganese metal is still continuing a tendency
       to rebound and, consequently, many of Chinese plants, which once suspended to produce this metal as
       the production was not profitable, are now resuming their production of electrolytic manganese metal.

       According to a market source, 10 to 20 plants are supposed to have returned to this production. This
       movement is thought to prepare for purchases of electrolytic manganese metal by steel mills in China to
       supplement their stocks of this metal.

       Owing to a rise of prices for raw materials and spot purchases of Chinese electrolytic manganese metal
       by consumers in domestic market and overseas countries, the price of this metal for export has
       continued to rise and its general price level as of the end of last week has reached USD 2,750 to USD
       2,800 per tonne FOB China, having risen by USD 700 per tonne as compared with the bottom one
       prevailed in an early part of November.

       However, since the production of electrolytic manganese metal in China has been resumed as
       mentioned above, the quantity of this metal to be supplied by Chinese producers is on a trend to
       increase and, therefore, a tightness of the supply as arisen from the second half of November is in the
       direction to loosen. Nevertheless, Chinese producers have been still continuing a challenge to cover the
       increased costs and some of them are offering electrolytic manganese metal at higher prices of USD
       2,800 to USD 3,000 per tonne FOB China.

       (Sourced from TEX Report Limited)

       European manganese prices consolidate gains
       Metal-Pages, 21/01/09

       European manganese flake prices have consolidated higher in the past week, cementing a small gain
       after increased Chinese exporter offers the week before, although domestic demand in Europe looks
       set to be weak in the short term, dealers told Metal-Pages on Wednesday.

       European spot prices are around $ 2,700-2,800 a tonne basis in-warehouse Rotterdam, with
       manganese lumps about $ 100 above that level. Smaller parcels for prompt delivery have been settled
       at about $ 2,850 a tonne.

       About 90% of manganese is used as a hardener in carbon steel products, with the rest used as an alloy
       in stainless steel and aluminium production.

       ―The market looks steady until after the Chinese New Year holiday next week,‖ one dealer said. ―There
       is material available if you want it and although buying interest has picked up a little the spot market is
       generally at a low level of activity.‖

       China is essentially shutting down for next week for their New Year holidays, which typically prompts
       some Chinese selling to book profits, although the manganese market in the country has stabilised after
       an increase in domestic prices around the start of this month.

       New offers of supply in China have met with little buying interest in China, where dealers reckon the
       market will be little moved until February.

       Many manganese producers, particularly the bigger firms with some working capital, have been
       reluctant to sell as they build stocks ahead of an anticipated market rally, dealers said. They reckon
       supply of manganese carbonate ores will tighten as harsh weather conditions have been disrupting
       mining in southern Chinese areas, while mines will shut for the New Year.



  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               29
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       Austenitic Stainless Steel Electrode for High Temperature Welding
       Chemical Online, 20/01/09

       Select-Arc, Inc. has introduced a stainless steel, metal cored electrode designed for welding when
       elevated temperatures are involved.

       SelectAlloy 310G-C has a modified 310 chemistry with a nominal composition of 26% chromium, 21%
       nickel and 5% manganese. The addition of the manganese in this gas-shielded, metal cored, stainless
       steel electrode reduces the tendency for hot cracking of this highly austenitic alloy. SelectAlloy 310G-C
       is well suited to provide a smooth, spray arc transfer with low spatter and little or no slag. This electrode
       is ideal for making small butt, lap and fillet welds on thin material. It operates at faster travel speeds,
       handles poor fit-up and offers higher deposition rates and more controlled penetration than the
       equivalent solid wire.

       SelectAlloy 310G-C is utilized to weld 310 stainless steel, as well as 410 and 430 stainless steels when
       preheating or postweld heat treatments are not possible. This electrode, available in .045" and 1/16"
       diameters, is used when elevated temperatures are involved such as with equipment for heat treating,
       chemical and food processing.

       Chinese electrolytic manganese market cools down
       Metal-Pages, 16/01/09

       The booming electrolytic manganese market has cooled down in China as the fast-moving price hikes
       fail to find much acceptance from consumers, market participants said. ―Transaction prices were
       actually much lower when offer prices were exceeding Rmb 15,000/tonne and volumes were far from
       big,‖ said a trade source.

       A survey of producers and traders on Friday pegged price ranges for manganese flake at Rmb 14,300-
       14,500/tonne ($2,097-2,126 before 20% export tax) basis ex works and $ 2,700-2,800/tonne FOB,
       similar to the previous levels.

       ―The market sentiment is turning around as increased offers have failed to find many takers,‖ a second
       trader said. ―Moreover, there is flat demand from both domestic and overseas end-users. The
       production level of 200 series stainless steels is at one of multi-year lows though some mills have
       increased their output slightly.‖

       In Europe, manganese demand has been persistently subdued amid an economic slump that has
       affected all metals markets. European steel firms have been slashing production through to early 2009
       in recent months as they struggle to cope with a fall in demand amid an economic recession and
       tightening credit finance from banks and other financial lenders.

       However, some traders said the market is expected to keep stable and might not see a price slump until
       the approaching Lunar New Year holiday. ―Many producers, particularly those big ones who don’t have
       big cash shortages, remain reluctant to sell as they are building up stocks and waiting for a new rally,‖
       said the second trader. A third trader cited tightening supply of the main raw material, manganese
       carbonate ores. ―The supply of manganese ores is going to tighten as harsh weather conditions are
       disrupting the mining in some southern China regions. Meantime, the forthcoming holiday will lead to an
       absence of many miners,‖ he said.


                                                                                            EMD

       Panasonic likely to post loss, close plants-Nikkei
       Reuters, 27/01/09

       Panasonic Corp is likely to report a net loss of about 100 billion yen ($1.12 billion) in the year to March
       31 on restructuring charges, weak demand for consumer electronics and the effects of the strong yen
       on overseas earnings, the Nikkei financial daily reported.


  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               30
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.
       It would be the first net loss in six years for the company, formerly known as Matsushita Electric
       Industrial Co Ltd.

       Panasonic also plans to close three plants, including two of its three plants that make electronics parts
       in Malaysia, the Nikkei said without citing sources. The third plant to be closed is in the Philippines, the
       Nikkei said.

       Panasonic had forecast a 10 percent rise in net profit to 310 billion yen at the start of the fiscal year on
       April 1 after a record profit of 280 billion yen a year earlier.

       It lowered its projection to a profit of 30 billion yen in November as the global economic downturn
       accelerated.

       Panasonic's operating profit is also likely to suffer a worse fall than the 35 percent drop to 340 billion
       yen the company forecast in November, the Nikkei said.

       This would reflect falling demand for semiconductors and electronics parts and worsening margins on
       the flat-panel TVs that have driven earnings in recent years, it said.

       One of the factories to be closed in Malaysia makes film capacitors used in mobile phones. The
       operation, in Malacca, will be shuttered in March, the Nikkei said.

       A plant in the state of Selangor, which makes switches for audiovisual equipment, will be closed in
       September, it said.

       The third plant to be closed is a Philippine facility that produces 12 million manganese dry-cell batteries
       a year for the local market.

       ($=89 yen)




  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                               31
The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.

        on overs eas earnings, the Nikkei financial daily reported.


  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                                        30
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 would be the first net loss in six years for the company, formerly known as Matsushita Electric
        Industrial Co Ltd.

        Panasonic also plans to close three plants, including two of its three plants that make electronics parts
        in Malaysia, the Nikkei said without citing sources. The third plant to be closed is in the Philippines, the
        Nikkei said.

        Panasonic had forecast a 10 percent rise in net profit to 310 billion yen at the start of the fiscal year on
        April 1 after a record profit of 280 billion yen a year earlier.

        It lowered its projection to a profit of 30 billion yen in November as the global economic downturn
        accelerat ed.

        Panasonic's operating profit is also likely to suffer a worse fall t han t he 35 percent drop to 340 billion
        yen the company forecast in November, the Nikkei said.

        This would reflect falling demand for semiconductors and electronics parts and worsening margins on
        the flat-panel TVs that have driven earnings in recent years, it said.

        One of the factories to be closed in Malaysia makes film capacitors used in mobile phones. The
        operation, in Malacca, will be shuttered in March, the Nikkei said.

        A plant in the state of S elangor, which makes switches for audiovisual equipment, will be closed in
        September, it said.

        The third plant to be closed is a P hilippine facility that produces 12 million manganese dry -cell batteries
        a year for the local market.

        ($=89 yen)




  Manganese Matters n° 2 (Issued January 29, 2009)                                                                                                                                        31
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