MANGANESE MATTERS June 22, 2010 - Issue n° 10 Article Index 3 IMnI UPCOMING MEETINGS IMnI Held Its Most Successful Conference To Date Board Meeting Sunday, November 14, 2010 Intercontinental, Berlin th Statistics Committee Meeting It was befitting that IMnI celebrated its 35 Anniversary in Paris with its largest Sunday, November 14, 2010 turnout of delegates ever. There were 185 delegates in attendance for IMnI‘s Intercontinental, Berlin th 36 Annual Conference, which took place from June 11 through 13. There REACH Steerco Meeting were many key features that made the conference such a success. Sunday, November 14, 2010 Intercontinental, Berlin Top-flight speakers… M&C Committee Meeting Sunday, November 14, 2010 Intercontinental, Berlin Kirby Adams, CEO of Corus, Jim Lennon of Macquarie and Robert Ward of the Economist Intelligence Unit were only a few of the excellent speakers to OHES Committee Meeting give presentations. Robert Ward introduced the delegation to ‗CIVETS‘, his Sunday, November 14, 2010 Intercontinental, Berlin list of countries to watch for future growth outside of the ‗BRIC‘ countries. Jim Lennon gave an all-encompassing paper on Mn and Kirby Adams enlightened us on the future landscape of the steel industry. Among the other notable speakers were José Carlos Martins of Vale, Charles-Edouard Bouée of Roland Berger Strategy Consultants and Xin Yaoyuan of SMM Information & Technology Co. Ltd. A wide range of topics were covered including energy, shipping, health and safety and the Chinese domestic ore market. To see all presentations, please visit: http://manganese.org/events/past_imni_events/2010_imni_36th_annual_conf erence_-_paris Changes in Leadership… After three fruitful years, Alastair Stalker stepped down as IMnI Chairman; he remains on the Board. The General Assembly approved Peter Toth, of OM Holdings, as his successor. Showing ambition right from the start, Peter has asked all IMnI committees to launch individual 5-Yr Plans to build on previous achievements and ensure the Institute continues to identify and meet the needs of its members. Paul Doetsch of BHP Billiton fills Alastair‘s seat on the Executive Committee, joining Arnaud Tissidre of Eramet and the new Chairman Peter Toth. New Committee Members… IMnI EPD Division: Thomas Gluck, Baja Mining Corp. 17 rue Duphot 75001 Paris OHES Committee: G.P. Kundargi, MOIL France Statistics Committee: Denny Sabah, Ronly Holdings Ltd. Tel : +33 (0) 1 45 63 06 34 Fax : +33 (0) 1 42 89 42 92 E-mail : email@example.com Web site : www.manganese.org …/… Manganese Matters n° 10 (Issued June 22, 2010) 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. Technical Tour… Vale welcomed visitors to its HC FeMn plant in Dunkirk on Monday, June 14. Two presentations were given: one on the characteristics of the plant and the other on the freeze-lining technology recently installed. These were followed by a tour of the plant. The day ended with a Vale hosted lunch. Both presentations can be found though the link given above. Finally, IMnI extends its thanks to our sponsors and exhibitors… IMnI would also like to thank its members companies that supported the event by sponsoring part of the social program. Thanks to Ronly Holdings for sponsoring our Welcome Cocktail, Minera Autlan for sponsoring Lunch on the first day, FerroAtlantica for sponsoring Lunch on the second day and to Eramet and Vale for sponsoring the Banquet Dinner at the Abbaye de Royaumont. The IMnI would like to thank the two companies that took out exhibition stands at the event. They were Harlan Laboratories and Euroports / CTB Magemon. To learn more about what these exhibitors have to offer your company, please visit our industry partners and suppliers page by following this link: Mn Industry Partners and Suppliers Page Three Companies Apply for Membership Indian Mn alloy producer Team Ferro Alloys Private Limited has applied for Ordinary Membership. Established in 1998, Team Ferro Alloys is a privately held company with its head office in Nagpur. It produces HC SiMn and Low & Med Carbon FeMn. Director Sandeep Goenka has been appointed to represent Team Ferro Alloys in the IMnI. With the arrival of Team Ferro Alloys, our Indian membership now stands at 12. ******************* American junior Mn miner ACM Corporation has applied for Ordinary Membership. Founded in 2004 and headquartered in Quincy, MA, the company operates two mines; one in Burkina Faso, the other in Mali. CEO Louis Slaughter will represent AMC. ******************* South African future miner Kalagadi Manganese Pty Ltd has applied for Ordinary Membership. The company, which plans to have its Umtu mine in the Kalahari in operation by 2012, has appointed Mrs. Daphne Mashile Nilosi as its representative to the IMnI. The company also has plans to build a HC FeMn smelter. Founded in 2007, Kalagadi Mn is owned jointly by Kalahari Resources (40%), Industrial Development Corp. (10%) and Arcelor Mittal (50%). In their application form, it was stressed st that this is the 1 company in which black South African woman have a significant role. Manganese Matters n° 10 (Issued June 22, 2010) 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. Metal Bulletin 3rd South African Ferro-Alloys Conference September 29-30, 2010 – Hilton Sandton, Johannesburg Ryan’s Notes 2010 Ferroalloys Conference Oct. 24-26, 2010 – Hollywood, FL th Metal Bulletin 26 International Ferro Alloys Conference November 14-16, 2010 – Intercontinental Berlin Manganese Matters n° 10 (Issued June 22, 2010) 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. ARTICLE INDEX ASIA (OTHER) IMnI‘s Annual Conference Was Held On 11th June At Paris ............................................. 18/06/10 S Korea KORES says eyeing Africa mines ........................................................................ 17/06/10 Market tendency on imports of ferroalloys into Japan ........................................................ 07/06/10 Korea to explore ocean for future natural resources .......................................................... 26/05/10 Malaysia: IFASB to Set Up Country‘s First Silico Mn Processing Plant ............................. 25/05/10 CHINA BHP Billiton holds manganese ore prices in July, August.................................................. 18/06/10 IMnI conference: Chinese steel boom unstoppable ........................................................... 14/06/10 Chinese ferro-alloy output up 6.5% in May ........................................................................ 11/06/10 Chinese ferroalloys weekly roundup .................................................................................. 03/06/10 BHP holds Mn offers to China steady for July, August ...................................................... 03/06/10 Chinese ferro-alloys exports continue to struggle .............................................................. 31/05/10 Most of China's ferro-alloy capacity cuts to come from Mn, says CFIA ............................. 31/05/10 Minmetals Hunan shuts two SiMn smelters ....................................................................... 24/05/10 INDIA India maintains status quo on ferro-alloy import duty......................................................... 21/06/10 Indian Market Report .......................................................................................................... 15/06/10 Indian mineral production up 14.41% ................................................................................. 04/06/10 Rohit Ferro-Tech starts Mn alloy production at Haldia ....................................................... 01/06/10 Indian manganese market stable ....................................................................................... 31/05/10 Rohit Ferro-Tech starts production at new 100% EOU unit at Haldia ................................ 31/05/10 OCEANIA Spitfire Resources Picks Up Tenements Near Woodie Woodie Manganese Mine............ 22/06/10 Groote Resources Aiming To Become "Major" Manganese Force .................................... 15/06/10 EUROPE European silico-manganese market up almost 5% ............................................................ 17/06/10 European SiMn market set to extend consolidation ........................................................... 10/06/10 European ferro-manganese market consolidates gains ..................................................... 10/06/10 CIS Ukraine ferroalloys producers up output levels sharply from 2009 .................................... 09/06/10 ICDA - CIS gaining ferro-alloys market share .................................................................... 27/05/10 AFRICA & MIDDLE EAST Union says hopes to reach deal with Eskom ..................................................................... 21/06/10 Gabon to tale stake in France's Eramet ............................................................................. 17/06/10 China firm to build new manganese processing plant ........................................................ 15/06/10 Transnet hopes to pursue big commodity .......................................................................... 10/06/10 South Africa boosts manganese, chrome production ........................................................ 11/06/10 Jupiter advances manganese project in South Africa ........................................................ 11/06/10 SiMn up as South Africa works through backlog ................................................................ 07/06/10 Manganese Matters n° 10 (Issued June 22, 2010) 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. Ethan Minerals Commences Trial Mining At Zambia JV Manganese Project .................... 07/06/10 Mining injects US$2.9bn into economy .............................................................................. 02/06/10 Ivory Coast Mn ore shipments off 25% in Jan-Apr ‘10 ....................................................... 01/06/10 S Africa transport strike may end on new deal ................................................................... 27/05/10 AMERICAS US ferro-manganese market eases again.......................................................................... 21/06/10 Brazilian steelmakers count electricity cost impact on alloys ............................................. 21/06/10 Vale mulls new ferro-alloy plants in Brazil .......................................................................... 17/06/10 US silico-manganese market falls almost 10% .................................................................. 07/06/10 US ferro-manganese market drops under more offers ...................................................... 03/06/10 DNSC announces amended offerings of stockpile metals ................................................. 01/06/10 GENERAL INFORMATION Ryan‘s Notes Weekly ......................................................................................................... 21/06/10 Ryan‘s Notes Weekly ......................................................................................................... 14/06/10 IMnI conference: Raw materials key for steelmakers – Corus ........................................... 14/06/10 Global manganese alloy capacity utilisation to rise ............................................................ 14/06/10 MARKET ROUND UP: Outside forces may force up ferro-alloys prices ........................... 11/06/10 BHP Billiton appoints Schutte as head of manganese unit ................................................ 08/06/10 Ryan‘s Notes Weekly ......................................................................................................... 07/06/10 MARKET ROUNDUP --- Nerves of steel............................................................................ 04/06/10 BHP Billiton names new base metals president ................................................................. 02/06/10 Global manganese ore output in Q1 up by 29pct YoY ....................................................... 02/06/10 Ryan‘s Notes Weekly ......................................................................................................... 31/05/10 Ryan‘s Notes Weekly ......................................................................................................... 24/05/10 STEEL NEWS CISA predicts rebound in Chinese domestic steel prices .................................................. 22/06/10 Global steel output 1.6% higher in May.............................................................................. 21/06/10 Japan May liquid steel production hits 19-month peak ...................................................... 18/06/10 Does China really mean business this time? ..................................................................... 18/06/10 ArcelorMittal will increase output in '10 .............................................................................. 16/06/10 ThyssenKrupp, Vale to Open World's Most Expensive Steel Mill ...................................... 16/06/10 Mittal close to securing land for 12 mln tpy steel plant ....................................................... 15/06/10 Chinese steel output hits record high of 56m tonnes ......................................................... 11/06/10 ArcelorMittal pressured to build Egypt steel plant .............................................................. 11/06/10 Chinese steel majors under pressure to cut output ............................................................ 09/06/10 ArcelorMittal mulls Q3 furnaces shutdown ......................................................................... 04/06/10 World steel output increases 35,7% y-on-y in April ............................................................ 21/05/10 OHES & SCIENCE ************************ EMM Chinese manganese market firm despite slow demand .................................................... 21/06/10 Mn flake rises $50 on shutdowns in China ......................................................................... 16/06/10 European manganese flake stable despite smugglers ...................................................... 15/06/10 American Manganese Inc. to Receive Contribution Through NRC-IRAP .......................... 15/06/10 Chinese manganese offers firm but demand is weak ........................................................ 14/06/10 Mn flake suffers seventh fall in a month ............................................................................. 04/06/10 Manganese Matters n° 10 (Issued June 22, 2010) 5 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. Chinese manganese market lacklustre on dull demand amid stainless cutbacks ............. 03/06/10 American Manganese moves step closer to public offering ............................................... 01/06/10 Chinese manganese market in downturn on weak demand .............................................. 26/05/10 EMD Delta EMD finally finds buyer for its Australian residue site ............................................... 09/06/10 Carbon Nanotube Foams and Nanoscale Manganese Oxide............................................ 25/05/10 Manganese Matters n° 10 (Issued June 22, 2010) 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. THE MANGANESE INDUSTRY ASIA (OTHER) back to index IMnI’s Annual Conference Was Held On 11th June At Paris Tex Report, 18/06/10 185 Persons Attended, Japan Participated In This Conference With 13 Persons From 7 Companies The 36th Annual Conference was held by IMnI (International Manganese Institute ) during the 11th to 13th of June of 2010 at The Westin Hotel in Paris. 185 attendants came to this Conference, having had a considerable increase of the attendants in comparison with that (118 attendants ) at the last Conference held at Dubai of UAE. The names of companies and persons attended at this Conference from Japan were Nippon Denko (Mitsui President and IMnI Director and others), Chuo Denki Kogyo (Someya President and others), Mizushima Ferroalloy (Kasaoka President and others), Mitsui & Co., Sumitomo Corp., Tokyo Boeki and Japan Ferro-Alloy Association. The main theme for 2010 discussed at this Conference was titled as ―Where are we in the history of industrial development ―. Eight guest speakers delivered their speeches. Mr. Alaister Stalker of Assmang assumed Chairman of IMnI for 3 years but resigned from this position by this Conference. Mr. Peter Toth of OMH becomes Chairman of IMnI as the successor to Mr. A. Stalker. After this Conference was closed, Vale HC FeMn Plant in Dunkirk of France was visited by some of the attendants. S Korea KORES says eyeing Africa mines Reuters, 17/06/10 State-run Korea Resources Corp (KORES) said on Thursday that it was looking closely at investing in several mines in Africa this year, expecting minerals prices pick up next year along with the global economy. KORES President Kim Shin-jong said in a written interview with Reuters on Thursday that the company would use part of the proceeds from its recent $300 million bond sale to finance the investments. "Although the timing is not as good as last year, this year is still good for investment. Next year we may not have opportunities to acquire new mines as minerals prices are projected to recover along with the economy," said Kim, who has more than 30 years experience in resources development. KORES, which has investments in 30 resource exploration, development and production projects in 12 countries, was interested in investing in South Africa, Mozambique, Namibia, Congo, Niger and Zambia, he said. KORES was seeking potential exploration opportunities for coal, uranium, copper and manganese, he added, saying: "We are interested in several mines in Africa, although we cannot yet confirm any acquisitions." CHINESE RIVALS Kim said part of the proceeds from the recent bond issuance would be invested in the Ambatovy nickel project in Madagascar, in which KORES acquired a 22.5 percent stake in 2006. He added that the company had no plan to issue another dollar bond this year. Manganese Matters n° 10 (Issued June 22, 2010) index 7 Last month, KORES sold a $300 million bond due in 2015. The issue drew $2.6 billion in orders, with Asian investors taking the bulk of the debt sold. While KORES planned to keep its debt-to-equity ratio below 100 percent over the long term, Kim said the company would diversify ways to raise money by selling some assets, such as partial stakes in the Ambatovy project, and resource development funds, as well as spending profit from its investments. On the company's strategy with regard to aggressive, cash-rich Chinese competitors, Kim said: "It is obvious we cannot match Chinese financial capacity and investment size. But we can provide world- class technology in setting up information technology, infrastructure and power systems, making us more suitable for offering package deals providing infrastructure in resource-rich countries." He added that KORES would continue to bid in consortiums with local private companies to hedge against risks. South Korea, Asia's fourth-largest economy, said in April that private and public investments, including those by KORES, in six major minerals were estimated to reach $1.3 billion this year, up 22 percent from last year. Heavily dependent on energy and resource imports, South Korea consumes 2.69 million tonnes of non- ferrous metals per year, making it the world's sixth-largest consumer, according to government data. Market tendency on imports of ferroalloys into Japan Steel Guru, 07/06/10 TEX reported that the market tendency by item on imports of ferroalloys into Japan at May 31st 2010 is as follows: General view The monthly production of crude steel in China reached 55 million tonnes in April and maintained a level of 50 to 55 million tonnes per month since January of 2010 but the purchases of raw materials by China are moving to change from the middle of May. The prices of iron ore and coal, as main raw materials for steel production, have risen to a considerable extent and an anxiety for the possibility to pass on these rises of prices for raw materials to prices of steel products is currently arising. A repugnance for the increased stocks of steel products held by steel mills is now being felt in China. The market prices for some of Chinese ferroalloys have started to fall. Also, both prices of silicon metal and manganese metal produced in China have entirely weakened. The price of Chinese silicomanganese has been underpinned by the sharply risen price of raw material but an anxiety for the aggressive sales of Indian silicomanganese by means of utilizing the weakened exchange rate of Indian Rupee against US Dollar is coming up to the market. The market price of ferrosilicon once fell but has now rallied. It is marked how does price of Russian ferrosilicon move hereafter. Ferro silicon Ningxia Hui Aut is one of silicon lands in China but raised fee of electric power from last week and, accordingly, an increase of cost for electric power in west north district of China is becoming an anxious matter. Since preferential fees of electric power applied in China were abolished, this is the second time in 2010, having raised electricity fee in Ningxia Hui Aut. Region. On the other hand, after the holidays continued for an early part of May had passed, domestic price of ferrosilicon in China once had a small fall but the trading companies concerned said that, reflecting a raise of electricity fee, market price of Chinese ferrosilicon has turned to firm up. Chinese suppliers are now offering ferrosilicon at USD 1,430 per tonne CIF Japan and it is difficult to secure actual cargoes of Chinese product at USD 1,400 CIF. On the other hand, Russian ferrosilicon was once offered at a high price of USD 1,550 per tonne CIF Japan but, in order to cope with the current price of Chinese ferrosilicon offered for Japan, Russian side has revised their offer to a level of USD 1,430 per tonne CIF Japan. Therefore, new price of Russian ferrosilicon has a possibility to be competitive again with that of Chinese product. Manganese Matters n° 10 (Issued June 22, 2010) 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. Silicomanganese The price of Indian silicomanganese was once offered on a high level but is now supposed to have weakened its attitude and this change of the aspect is due to the weakened exchange rate of Indian Rupee against US Dollar. The exchange rate of Indian Rupee has weakened by 6% and the trade to export Indian silicomanganese at the price on USD base has multiplied the power to be more competitive on the overseas market. Incidentally, Indian suppliers have felt the difficulties to sell more silicomanganese in Europe as expected and, therefore, revised the high prices as offered for Japan on the end of April. The new price of Indian silicomanganese is in the range of USD 1,530 to USD 1,550 per tonne CIF Japan, having fallen by nearly USD 100 per tonne from the high prices as mentioned above. A prospect of USD 1,500 CIF for Indian silicomanganese will be within hail and a basic tone on price of silicomanganese has changed to fall. Manganese metal Domestic price of electrolytic manganese metal in China has currently fallen to CNY 14,600 to CNY 14,800 per tonne, having broken a level of CNY 15,000. The price of electrolytic manganese metal in China had been maintained by CNY 15,500 per ton until an early part of May but had fallen considerably for the next 2 weeks. This sharp fall of domestic price for Chinese electrolytic manganese metal has been influenced by a reduction in production of 200 series stainless steel in China caused by a fall of nickel price. In addition, the excessive stocks of electrolytic manganese metal held by steel mills have deteriorated market price of this metal. Also, the price of Chinese electrolytic manganese metal for export has fallen to a low level of USD 2,800 to USD 2,850 per tonne FOB. Reflecting a weak tone of domestic price for electrolytic manganese metal in China, the price of this metal offered for export to Japan has fallen by more than USD 100 per tonne and come down to a level of USD 2,850 to USD 2,900 per tonne CIF. (Sourced from TEX Report Limited) Korea to explore ocean for future natural resources The Korea Time, 26/05/10 South Korea imports most of its energy needs from outside, leaving itself extremely vulnerable to sudden changes in the price of oil and other raw materials. Coupled with the rapid depletion of natural resources, surging demand from China, India and other fast- growing emerging economies raises the price of crude and other commodities sharply, weighing heavily on the Korean economy. To secure a stable supply of energy resources and achieve a sustainable growth, the nation should turn its eye to the sea and make larger investments to explore a range of minerals on the sea bottom, Korea Ocean Research and Development Institute (KORDI) President Kang Jung-keuk stressed. ``To cut our reliance on oil and other conventional fossil fuels produced on land, we should proactively explore manganese nodules and other marine natural resources. We secured 75,000 square kilometers of open sea in the Pacific Ocean under which some 510 million tons of manganese nodules are estimated to be buried. Additionally, we secured the right to explore 20,000 square kilometers of the open water near the Kingdom of Tonga in the South Pacific where around 300,000 tons of gold are likely buried,'' Kang said. To more effectively mine manganese nodules and other minerals at the sea bottom, the institute has developed an unmanned robot, named ``MineRo.'' ``We successfully tested it in the East Sea last year. It operated 100 meters below the sea level. In the near future, we will make it operational 5,000 meters below the surface,'' he said. The institute is undertaking several economic feasibility studies on the construction of electric power plants using tidal currents in the West Sea, while working on the state-of-the-art technologies to produce bio-ethanol from marine algae. Manganese Matters n° 10 (Issued June 22, 2010) 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. ``Generating electricity from tidal currents and extracting fuel from marine plants are environmentally friendly and renewable energies, which will help Korea reduce its imports of conventional fossil fuels, boost economic activities and create jobs. We will also make effort to foster a marine biotechnology sector by studying microorganisms that inhabit the most extreme living environments under the sea. By examining them, we could obtain materials for new medicines and create a range of benefits for humans,'' Kang said. Malaysia: IFASB to Set Up Country’s First Silico Manganese Processing Plant in Perak Syndigate Info, 25/05/10 Ipoh Ferro Alloys Sdn Bhd (IFASB), a subsidiary of IRSB Corporation (M) Sdn Bhd, will be setting up the country's first Silico Manganese, Ferro Manganese and Ferro Silicon processing plant on an 80- hectare site at the Seri Iskandar Industrial zone near here. IRSB's Chief Executive Officer, G.K. Hari, said IFASB would be investing RM200 million on the project which is expected to be developed under a five-phase period. "For a start, we will develop an area of four hectares with an investment of RM30 million within six months of the completion of the documentation process. "We have chosen Seri Iskandar due to its proximity to Lumut Port which will make it easier for the transportation of coal from Indonesia," he told reporters here Monday. Hari said once the first phase of the plant is completed, it would be able to cater to 25 per cent of the local users' needs of the alloys. The users currently get their supply from China, India and African countries. He said the plant would also see a transfer of technology from Japan and India. "We would bring experts from Japan and India to monitor the products of IFASB to ensure that they are of high quality," he said. The plant would open up some 350 job opportunities for locals while providing businesses for building contractors and transportation companies, Hari said. Silico Manganese, Ferro Manganese and Ferro Silicon are alloys used to stabilise products produced by steel producers. Among the local users of the alloys include Perwaja Steel, Malayawata Steel, Mega Steel, AM Steel, Southern Steel, Ann Joo Steel and Mitsui Corporation. CHINA back to index BHP Billiton holds manganese ore prices in July, August Metal-Pages, 18/06/10 BHP Billiton has rolled over its June manganese ore prices through July and August against plentiful stocks and weaker manganese alloys prices, according to industry sources this week. Offers with minimum 43% metal content are about $8.35 per mtu (metric tonne unit) basis CIF China for July and August shipment, while lump with minimum 43% metal content is around $8.70/mtu, sources said. Metal lumps with a minimum 48% metal content have been unchanged at $9.40/mtu. ―Alloys producers have cut their buying interest in recent weeks in line with a drop in their product prices, and there is little activity in manganese ore activity in Chinese ports,‖ one dealer said. Manganese Matters n° 10 (Issued June 22, 2010) 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. Dealers said BHP had won a sharp increase in manganese ore prices in June, mostly due to a stronger iron ore market. However, with manganese ore stocks at above a million tonnes in Chinese ports such as Tianjin, an increase in prices through the third quarter looked unjustified, dealers said. With some 2 million tonnes of manganese ore reckoned to be stockpiled in China, representing about 5 months of domestic demand on average, as well as short term weakness seen in manganese alloys through the seasonal slowdown and weaker steel demand, the market is expecting more losses. Chinese imports of manganese ores hit a historical peak of almost 4 million tonnes in the first four months of this year, more than double the 1.73 million tonnes imported in the same period of last year, according to the latest Chinese Customs data. IMnI conference: Chinese steel boom unstoppable Metal-Pages, 14/06/10 China's steel boom is set to continue for another two to three decades, Wang Feng, executive director of China National Minerals Co told the International Manganese Institute 36th annual conference in Paris at the weekend. With a push for urbanisation China will need 300 million to 400 million tonnes of steel more than it can produce now, and its annual crude steel output will have to rise to about 1 billion tonnes. "So for the next 20 to 30 years steel will still be a boom industry in China," Wang said. The key to consumption growth lies in the construction and housing sector, and mortgages may be the way to drive the sector and the whole economy in the future, he suggested. At present, the Chinese government is trying to control the growth in the construction sector, and the third quarter would see a slowdown in steel production, Wang noted, however the overall trend is still up both in the medium and long term. In May alone, China produced 56 million tonnes of steel, a production rate which sets it on course to exceed the 2009 annual output of 567.8 million tonnes. "The third quarter in China may be slower as the government is taking measures to control growth, but in any case this year as a whole China will definitely produce more than in 2009 and we will produce more than 600 million tonnes of steel," he said. "It is estimated that steel consumption in China will be 50 million tonnes higher than in 2009 and that export will reach 40 million tonnes, and that crude steel production will be between 630 million and 650 million tonnes this year." Chin has 1.6 billion people of whom some 0.4-0.5 billion live in the city, with many more living in rural areas. "The government aims to reduce rural population from 1 billion to 0.4 billion in the next 30 years. In terms of steel production that means that in the long term it needs to be near 0.9 billion to 1 billion tonnes," Wang told delegates. Chinese steel production began its growth after the 1940s, following the revolution, under the centrally planned economy run by the communist government. From about 0.6 million at the end of the 1940s to early 1950s, China's steel production reached around 30 million in the late 1970s - 23.9 million tonnes in 1975 and 31.78 million tonnes in 1978. But the real growth spurt followed the move to market economy under the government of Deng Xiaoping, as china became a socialist government with elements of capitalism. "The main part of the development is coming from the market economy," Wang said. From 36.2 million tonnes in 1980 Chinese steel output grew to exceed 100 million tonnes in the 1990s, with the country production 124.26 million tonnes of steel in 1999. The 2000s brought another explosion in capacity. Following China's entry in to the WTO the country started making more steel than ever Manganese Matters n° 10 (Issued June 22, 2010) 11 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. before, with production soaring from 126 million in 2000 to 352.39 million in 2005 to 567. 8 million in 2009. The entry into the WTO was the turning point. "If the whole world market opened to China then China could occupy the whole of the world market," Wang commented. The Chinese steel industry needs future development but will meet a lot of challenges, especially in terms of raw material supply. Technologically it is also still at a stage of producing mainly low grades of steel, which have driven its growth. "The technology of the steel industry is easy to copy," Wang pointed out," and most steelmakers make low grade products such as wire rod, steel sheet and rebar." China's main competitive advantage has been its cheap labour, with workers accustomed to enduring long hours and earning enough to cover only the most basic needs, he added. Another cheap advantage has been China's lack of environmental regulation. The government is now tightening this lax environmental regime and trying to get the industry investing in green technology. However China does not as yet have green technology, Wang said, suggesting that the environmental drive will result in greater concentration in the industry, with consolidation under larger producers, as smaller mills have much poorer technology insufficient to make them a green industry. However the competitive advantage of cheap labour is set to remain. Despite current emerging labour disputes, Wang suggested that the need for improved labour condition and higher wages would not be a problem for at least another ten, twenty years. "If the workers get the industry to pay more, the labour efficiency will also get much higher," he said, adding that labour efficiency at Chinese plants is already much higher than in the developed world. Chinese ferro-alloy output up 6.5% in May Metal Bulletin, 11/06/10 China's ferro-alloy output rose in May for the third month in a row to 2.26 million tonnes, but is expected to fall due to lower prices and demand, said market sources. "Output remained high in May, but I think it may keep stable or decrease somewhat in the next two or three months," said a manganese alloys producer in Guangxi province, citing firm manganese ore prices but falling alloys prices, and buying from steel mills fell. China's ferro-alloys output rose 6.5% from April to 2.26 million tonnes in May, up 22% year-on-year, according to the national statistics bureau. The weak market situation has been exacerbated by higher costs after the government lifted power tariffs in June. Most ferro-molybdenum smelters have suspended production, with as many as 60-70% closed in the key production base of Huludao in Liaoning province, after prices fell 12% in a month (MB Jun 10). "If the market continues to be weak, then I am afraid ferro-chrome producers may also consider closing smelters," said a ferro-chrome producer in Sichuan. "For the moment, most ferro-chrome producers are still at full capacity." In the first five months of this year, China produced 9.92 million tonnes of ferro-alloys, up 31% year-on- year, according to the bureau. Chinese ferroalloys weekly roundup - Increase in power rates drives FeSi offers up, others unaffected Metal-Pages, 03/06/10 The increase in electricity tariffs on energy sensitive sectors appear to have only impacted on ferro- silicon, with electricity estimated to account for over 80% of its production cost. Other markets have had Manganese Matters n° 10 (Issued June 22, 2010) 12 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. another week of falling or unmoved prices with weak demand from the precarious steel sector cited as the main culprit. China‘s ferro-alloys exporters say they continue to face serious difficulties as a result of their dependence on overseas markets, according to industry speakers at a recent ferro-alloys conference. The global output of crude steel has decreased this year and high production costs keep prices of China‘s exports uncompetitive in the international market. Increased chrome and manganese ore prices have to some extent supported export prices, China‘s exports are also being hampered by uncompetitive prices. Beijing‘s restrictive policies, such as high export duties are also a factor. In regard to the market outlook for 2010, the recovery of the world economy is expected in a way to help revive China‘s ferro-alloy exports, but high unemployment and the European debt crisis is still adding uncertainty to the world economy. FERRO-SILICON Chinese ferro-silicon producers have been increasing their offer prices this week as electricity tariffs in main producing regions such as Ningxia and Gansu are reported to have been raised as of June 1. However, steel mills are hesitant to buy in due to uncertain market outlook for the steel sector itself. ―There have been limited transacted deals so far this week as although production costs are going higher, demand from downstream sectors is far from satisfactory,‖ said a producer source. Demand for high purity ferro-silicon is expected to grow, while China‘s production capacity for the material will be expanded steadily in the next few years, according to Jing Meili of China‘s Ningxia Yinglite Binhe Metallurgical Co. ―As overseas and domestic steel mills are shifting more of their capacity to production of steel using high purity ferro-silicon, the demand is expected to increase further. To meet the growing demand, China‘s annual capacity of high purity ferro-silicon will expand to over 200,000 in the next two or three years,‖ Jing told delegates at the China ferro-alloys International Conference in Shanghai. ―However, the increase in capacity will certainly bring about keener competition,‖ she added. MANGANESE METAL AND ALLOYS Chinese electrolytic manganese market has been quiet this week with prices largely unchanged to the previous level. Demand is continuing to weaken amid widespread bearish sentiments among market players. With stainless mills increasing production cutbacks and thus stopped buying manganese, about 40% of capacity has been shut, according to industry estimates. There is also thin demand from overseas consumers as falling domestic prices encourage buyers to take a wait and see attitude. However, a Hunan based producer reported that the government will launch an inspection on producers‘ environmental facilities in June and all unqualified players will face shutdown. European spot manganese flake prices have dropped again in the past week on increased supplies, notably imported material, amid quiet market demand. ―The European market has been quiet for several weeks now and there have been more, cheaper shipments from Asia that has been dragging on European prices more recently,‖ a dealer said. Manganese Matters n° 10 (Issued June 22, 2010) 13 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. However, some European manganese dealers say Chinese flake is being shipped via Vietnam – to avoid the Chinese 20% export duty – and then stored in warehouses, such as Rotterdam, after European Customs clearance. Some Chinese exporters say virtually no material is being shipped from China as the 20% export duty is too expensive, while shipments from Vietnam are being offered at $2,700/tonne duty delivered paid, and even cheaper, to European dealers. The Chinese manganese alloys market has seen another lackluster week amid quiet trading activity. Spot manganese ore prices remain under downward pressure due to inactive buying from ferroalloys makers and large stockpiles at ports. BHP Billiton‘s new offer prices should be disappointing Chinese ore consumers again as its offer prices for shipments in July and August will be unchanged to the previous level. BHP holds Mn offers to China steady for July, August Metal Bulletin, 03/06/10 BHP Billiton has held its manganese ore prices for July and August at the same level as June, as the falling downstream manganese alloys market and high ore stocks weigh on market sentiment. Offers of siliceous chip with minimum 43% metal content are at $8.35 per mtu cif China for July and August shipment, while siliceous lump with minimum 43% metal content is at $8.70 per mtu, according to market participants in China. Metallurgical lump with minimum 48% metal content is also unchanged at $9.40 per mtu. ―In June, BHP had a substantial increase in manganese ore prices offer that was closely related to iron ore. But now there is no motivation for manganese ore prices to continue rising because of the current poor performance of downstream alloys market, ‖ said a major trader in Beijing. BHP lifted its manganese ore prices last month for June shipment by as much as 11%, despite signs the market was weakening. ―Ore sales in recent weeks have been very weak in the port, as most alloys producers are unwilling to purchase on falling prices of their products,‖ said a trader in Lianyungang, Jiangsu province. A trader in the Tianjin port, where reported manganese ore inventory is above 1 million tonnes, sold manganese ore at a loss in order to improve their cashflow to buy other products, he told MB. Manganese ore stocks in China are more than 2 million tonnes, traders said, adding that Qinzhou port in Guangxi province has around 700,000 tonnes of manganese ore. ―Manganese ore inventory has been rising over the past year, and now it is difficult to say how much is the normal level. The current 2 million tonnes of stock is about at least four to six months of demand for domestic producers, ‖ said a trader in Zhanjiang city, Guangxi province. Ferro-manganese and silico-manganese prices are likely to continue to fall back in the near term on weak demand from steel sector, even after the government cancelled the preferential power tariff for high energy consumption enterprises and closed more small manganese smelters, market participants said. ―Power fees increased 3-5 cents from this week, which means that manganese alloys production costs rose by 135-225 yuan ($20-33) per tonne, while our prices fell further on lower steel mills purchase prices, ‖ said a producer in Guangxi. A producer in Sichuan echoed his comments, saying that they still had difficulty in concluding deals even after they cut offers by 100 yuan to 8300 yuan per tonne. Manganese Matters n° 10 (Issued June 22, 2010) 14 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. High-carbon ferro-manganese prices dropped 200 yuan from last week to 8,000-8,300 yuan per tonne, while silico-manganese was at 7,900-8,300 yuan, down 100-200 yuan from a week ago. ―According to current manganese ore costs, alloys producers are doing business at a loss, and hence I guess many small smelters will choose to shut down or cut production to reduce losses, ‖ the Sichuan producer added. Chinese ferro-alloys exports continue to struggle Metal-Pages, 31/05/10 China‘s ferro-alloys exporters say they continue to face serious difficulties from their dependence on overseas markets, according to Xu Xu, chairman of the China Chamber of Chemicals and Minerals Importers and Exporters (CCCMC) trade body. ―The global output of crude steel has decreased this year and high production costs keep prices of China‘s exports uncompetitive in the international market,‖ Xu told delegates at the China Ferro-alloys International Conference in Shanghai. Increased chrome and manganese ore prices have to some extent supported export prices, China‘s exports are also being hampered by uncompetitive prices. Beijing‘s restrictive policies, such as high export duties are also a factor, Xu said. ―In regard to the market outlook for 2010, the recovery of the world economy is expected in a way to help revive China‘s ferro-alloy exports, but high unemployment and the European debt crisis is still adding uncertainty to the world economy,‖ Xu said. China is the world largest ferro-alloys producer and consumer as well as one of the major exporters. Most of China's ferro-alloy capacity cuts to come from Mn, says CFIA Metal Bulletin, 31/05/10 China's plans to close 4% of its ferro-alloy capacity before July is hitting manganese alloys the hardest, said a senior official at China Ferroalloys Industry Assn (CFIA). "More than half of the capacity to be phased out are of manganese alloys," said Zhang Zengchan, assistant to the president at CFIA. The ministry of industry and information technology last week confirmed that China was shutting down all ferro-alloy furnaces operating at below 6,300kVa. "In order to ensure the completion of 11th Five Year Plan's emission reduction targets and respond to global climate change, we will phase out 1.44 million tpy of backward ferro-alloys capacity before the third quarter," said Yang Yongxin, an official at the ministry. All would be closed this time, Yang added. "Hunan, Guizhou and Sichuan provinces will take the biggest cuts," Yang said, noting that China's present ferro-alloy capacity is 34 million tpy. These provinces are the major producers of manganese alloys in China, said CFIA's Zhang. Still, Zhang said, there was a need to tackle China's ferro-alloy overcapacity, which has led to an oversupplied market in recent years as well as price declines. In 2009, China phased out 1.62 million tpy of outdated ferro-alloys capacity. Manganese Matters n° 10 (Issued June 22, 2010) 15 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. Minmetals Hunan shuts two SiMn smelters Metal Bulletin, 24/05/10 Minmetals (Hunan) Ferroalloys, a major silico-manganese producer in China, has shut down two smelters this month for an upgrade, said a company source. The smelters, of 12,500kVA and a 30,000kVA, will be upgraded to be more environmentally friendly and less pollutive, said the source. "This transformation will be completed by the end of June," said the source, adding that there another smelter will be closed after these two have completed their upgrades. The shutdown will have limited impact on the market as silico-manganese prices are falling due to weak demand now, said traders. Minmetals (Hunan) Ferroalloys has 210,000 tpy of silico-manganese capacity and is among the five largest in China. It has completed an environmental upgrade on its four other smelters. INDIA back to index India maintains status quo on ferro-alloy import duty Metal-Pages, 21/06/10 The Indian government is yet to react to demands from the country's ferro-alloys industry for a hike in import duty on ferro-alloys. The mines director, RN Dash, has said that there is no such proposal at present being discussed at union government level.. The Indian Ferro Alloys Producers Association (IFAPA) has been demanding that the import duty on ferro-alloys be raised to 7.5% from the present 5% to encourage domestic producers, protecting them from foreign competition in India's domestic market. India's ferro-alloys industry, which has built about 3.6 million tpy of capacity, is now producing only 2.4 million tpy, utilising less than 70% of its annual capacity. Dash, in his address at the national seminar on ferro-alloys industries said that his ministry has initiated the process of delisting silico-manganese from the restricted category for the benefit of the ferro-alloys industries in the country. He said the government has imposed an export duty on chrome ore to encourage value addition in the country. The Union mines director told the seminar that the standalone ferro-alloys manufacturers in the country would either merge with larger steel plants or may go for forward integration. Indian Market Report - Steel mills eye more capacity, but raw materials markets weaken Metal-Pages, 15/06/10 Indian market report ArcelorMittal, Posco and other five companies may spend a combined INR1.42 trillion ($30.4 billion) to build plants in southern India, according to Indian media reports. ArcelorMittal plans to invest INR300 billion ($6.4 billion) in the state of Karnataka, Lakshmi Mittal, Chairman, ArcelorMittal was quoted as saying. Posco plans to invest INR 320 billion ($6.85 billion) for a 6 million tpy plant, the report stated. Karnataka in southern India is seeking investments to exploit its iron-ore resources. Compared with Orissa and Jharkhand in the east, Karnataka may face fewer problems convincing its people to give up land because of the high literacy level, but land valuation could be a hurdle, the report suggested. JSW Steel may invest INR151.3 bilion ($3.24 billion) and Bhushan Steel Ltd. INR 279 billion ($5.97 billion) in the state. Essar Steel plans to invest INR220 billion ($4.71 billion) to build a 6million tpy plant at Bagalkot, Chairman Shashi Ruia said. Manganese Matters n° 10 (Issued June 22, 2010) 16 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. Globally, the steel companies are seeking access to mines to build plants as raw material costs soared with the economic recovery. Karnataka has reserves of 11% of India‘s hematite iron ore, according to the mines ministry. The ore is mainly spread across the districts of Bellary, where ArcelorMittal plans to site its new facilities. MANGANESE ORE Indian manganese ore market is a little weak at present and traders are beginning to worry. The international price is down and if the market is not supported by domestic demand, than it has no hope of maintaining its momentum. Currently the prices have gone down slightly but there is still hope, however if markets turn bad then profit margins will go down and there will be cause for worry, says a Mumbai based trader. The international manganese ore price is mainly stable, with leading miner BHP still maintaining its previous offers, so the price could not go down sharply in the near term, he predicts however. Currently Indian manganese ore is being sold at INR 20,000-22,500/tonne ($428-482/tonne ex works) by private producers, while state miner MOIL is offering manganese ore at INR 19,126/ tonne ($409/tonne). Indian mineral production up 14.41% Metal-Pages, 04/06/10 The mineral production from the mining and quarrying sector in March 2010 was higher by 14.41% compared to that of the preceding month. However, the mineral sector has shown a positive growth of 9.75% during the current financial year i.e. April- March 2009-10 as compared to that of the previous year. The mineral production alone in March 2010 was higher by 10.96% as compared to that of the corresponding month of the previous year. The total value of mineral production (excluding atomic and minor minerals) in the country during March 2010 was INR113.16 billion ($2.43 billion). The contribution of coal was the highest at INR47.61 billion ($1.02 billion)representing 42%. Next in the order of importance were: iron ore INR22.61 billion ($485 million), petroleum (crude) INR16.48 billion, natural gas (utilized) INR14.74 billion, lignite INR2.73 billion and limestone INR2.66 billion. These six minerals together contributed about 94% of the total value of mineral production in March 2010. Production level of important minerals in March 2010 were: coal 60.9 million tonnes, iron ore 20.5 million tonnes, lignite 3.3 million tonnes, natural gas (utilized) 4715 million cu.m., petroleum (crude) 3 million tonnes, bauxite 1.339 million tonnes, chromite 289,000 tonnes, copper conc. 12,000 tonnes, gold 220 kg, lead conc. 13,000 tonnes, manganese ore 232,000 tonnes, zinc conc. 111,000 tonnes, apatite and phosphorite 121,000 tonnes, dolomite 382,000 tonnes, limestone 21 million tonnes, magnesite 28,000 tonnes and diamond 3,363 carats. In March 2010, the output of diamonds increased by 58.86%, apatite and phosphorite 28.69%, coal 20.88%, magnesite 19.07% , zinc conc. 17.87% , natural gas (utilised) 14.03% , petroleum (crude) 11.16% , limestone 9.14%, gold 8.37%, lignite 6.9%, bauxite 6.53%, iron ore 6.35% , lead conc. 3.12%, chromite 2.19%, copper conc. 0.42%. However, the production of manganese ore decreased by 0.83% and dolomite 1.53%. Manganese Matters n° 10 (Issued June 22, 2010) 17 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. Rohit Ferro-Tech starts Mn alloy production at Haldia Metal Bulletin, 01/06/10 India‘s Rohit Ferro-Tech has started production at the first furnace of its new manganese alloys plant in Haldia, West Bengal, the company said in a regulatory filing. The company will open a further five furnaces one by one and at intervals of two to three months, it said. When operating at full capacity, the plant will produce 100,000 tpy of ferro-manganese and silico- manganese. Rohit Ferro-Tech has a current production capacity of 180,000 tpy of ferro-alloys, including high-carbon ferro-chrome, from its plants in Bishnupur, West Bengal, and the Kalinganagar Industrial Complex in Orissa. In addition to new production from Haldia, the company is planning to add another 50,000 tpy of capacity in Orissa, slated for completion next year. ―With the current capacity of 180,000 tpy of ferro-alloys production, and the projected capacity of 280,000 tpy by 2010, and 330,000 tpy by 2011, [Rohit Ferro-Tech] is focusing [on] its competitive advantage and try[ing] to emerge as one of the largest ferro-alloy producers in India,‖ the company said on its website. The Haldia project will be a 100% export-oriented unit. Indian manganese market stable Metal-Pages, 31/05/10 Indian manganese prices are stable with little market activity, traders say. Silico-manganese 60/14 material is fetching INR 55,000/ tonne with high-carbon ferro-manganese 70% material at INR 62,000/tonne. A ferro-manganese trader who imports material from the middle-east regions reportedly received an offer for $1,500/tonne from Dubai-based vendors, CNF basis. One domestic Indian supplier quoted $1,520/ tonne for the grade ore FOB basis. The trader is waiting for lower offers in the region of $1,480/tonne. The silico-manganese market may rebound in next few weeks due to rising production costs, in the view of one Indian manganese alloy trader. Higher electricity tariffs and the higher cost of imported silicon metal push Indian market prices up in the trader said. However, other suppliers and traders say there are currently few deals being made and with markets very slow, a price rebound is unlikely in the short term. Indian manganese market stable Metal-Pages, 31/05/10 Indian manganese prices are stable with little market activity, traders say. Silico-manganese 60/14 material is fetching INR 55,000/ tonne with high-carbon ferro-manganese 70% material at INR 62,000/tonne. A ferro-manganese trader who imports material from the middle-east regions reportedly received an offer for $1,500/tonne from Dubai-based vendors, CNF basis. One domestic Indian supplier quoted $1,520/ tonne for the grade ore FOB basis. The trader is waiting for lower offers in the region of $1,480/tonne. Manganese Matters n° 10 (Issued June 22, 2010) 18 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 silico-manganese market may rebound in next few weeks due to rising production costs, in the view of one Indian manganese alloy trader. Higher electricity tariffs and the higher cost of imported silicon metal push Indian market prices up in the trader said. However, other suppliers and traders say there are currently few deals being made and with markets very slow, a price rebound is unlikely in the short term. Rohit Ferro-Tech starts production at new 100% EOU unit at Haldia Equity Bulls, 31/05/10 Rohit Ferro-Tech Ltd has announced that the Commercial Production of Company's new 100% EOU at Haldia has started the production from the first furnace on May 31, 2010. Production from other five furnaces is expected to start one by one at an interval of 2-3 months. The Company will make manganese alloys from this unit, which is mainly targeted for exports. OCEANIA back to index Spitfire Resources Picks Up Tenements Near Woodie Woodie Manganese Mine Proactive Investors, 22/06/10 Spitfire Resources (ASX: SPI) has won a ballot to secure new tenements surrendered by Consolidated Minerals that are are located down-strike to the south of its world-class 1Mtpa Woodie Woodie Manganese mine in the East Pilbara region. The two new tenements, E46/902 (107km2) and E46/893 (87km2) are adjacent to existing tenure at South Woodie Woodie. Spitfire‘s total East Pilbara ground holding at South Woodie Woodie now stand at 1,749 sq km. The new and recently announced tenement applications are all 100% owned. Spitfire‘s original tenement holding of 430.1 sq km at South Woodie Woodie is 80% owned. ―This is another strategic addition to our East Pilbara tenement portfolio following our success in April in securing a highly prospective 111 sq km tenement located immediately north of the Nicholas Downs Manganese Mine,‖ executive chairman James Hamilton said. ―South Woodie Woodie is our core area of focus and activity and we are very pleased that we have been so successful in expanding our tenure in a highly competitive environment.‖ Regional mapping is planned to commence upon granting to generate an initial round of targets on the new tenements. Groote Resources Aiming To Become "Major" Manganese Force Proactive Investor, 15/06/10 Groote Resources is a newly minted manganese explorer / developer listed on the Australian Stock Exchange under the code GOT. The company was previously known as Western Uranium and was floated to explore uranium leases in Western Australia that were spun off by Prairie Downs (ASX: PDZ). That endeavor garnered relatively little traction and the stock traded around 10 cents. In November of last year the company purchased Reflective Minerals which held applications for 5 mineral exploration leases and one authorization covering 1,723 square kilometers which includes the inferred down dip and strike extensions of the richest manganese mine in the world located on Groote Eylandt and operated by a joint venture between BHP Billiton (ASX:BHP, LON:BLT) and Anglo American (LON:AAL) and known as Gemco. Manganese Matters n° 10 (Issued June 22, 2010) 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. In 2009 this mine recorded earnings before interest taxes and depreciation of ~A$1.1 Billion from the mining of 2.3 million tonnes of high grade manganese and is known as one of the most profitable mines in Australia and the lowest cost producer of manganese in the world. This has led to a very substantial re-rating of GOT with its diluted market cap at one stage over A$100 million but now with the very tantalizing possibility of becoming a very major player in the manganese market. Based on its current work program GOT estimates the potential for a resource of 50 million tonnes of manganese with annualized production of 2 to 3 million tonnes of high grade ore putting it into the same league as Gemco if it can fully execute its game plan. The Geology of Groote Eylandt and the Inferred Extensions of Manganese Mineralization The Gemco leases covered all of Groote Eylandt but only up to the shoreline and contain a resource currently measured at 160 million tonnes at a grade of 45.5% manganese located along the western and southern flank of the island. Some geological studies indicate that the total resource may be several times bigger. Geological studies carried out by the Directors of Reflective Minerals showed a very strong possibility that the manganese deposit on the Gemco leases lay like a very large sedimentary ―blanket‖ that varied in depth but averaged 3 meters and it gently dipped into the very shallow waters that they pegged along shoreline of the island. The waters here are only about 7 meters in depth and the ground cover over the deposit is only about 3 meters deep as can be seen in photographs of the walls of the Gemco open pit. All of the cover is very soft sandy material which makes it very low cost to extract. Further physical studies on Winchelsea Island which is directly north of the main deposit clearly show an area measured as 17 square kilometers which appears to be another sedimentary blanket. Photos on the GOT website clearly show a repetition of the blanket like layers found in the Gemco pit repeating along the shoreline outcrops at a number of locations where manganese is found. GOT holds exploration rights for six tenements covering 1,723 km2 of shallow marine terrain and two islands near Groote Eylandt in the Northern Territory of Australia. These tenements are located immediately adjacent to and contain the interpreted extensions of the world-class manganese deposits at Groote Eylandt currently being mined by GEMCO. GOT has now also pegged new authorization applications and offshore mineral exploration licenses covering 15,439 square kilometers running south and west back to the Northern Territory coastline. These applications extend close to onshore manganese finds at Rosie Creek and Battern Creek. Following GOT‘s applications for the offshore tenements on the west coast of Groote Eylandt, GEMCO immediately applied for all of the remaining offshore areas. Management Skills When GOT bought Reflective Minerals they picked up Alex Hewlett as a Director. Alex was the Senior Geologist who put together the research and Groote Eylandt leases backed by financier Simon Noon who also joined the Board. Simon Brown another Senior Geologist is added to the management team who will oversee the planned exploration program, drilling and resource modeling. Simon has twenty years of international experience of which a substantial part has been spent working in the Northern Territory. Peter Waterman has also been added and is an Associate Professor and Environmental Advisor who works extensively in the Northern Territory. Additional technical support will be provided by Barrie Bolton who is a Geological Advisor and has worked on manganese properties worldwide for thirty years. Manganese Matters n° 10 (Issued June 22, 2010) 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. Project Development and Planned Exploration Program All of the various applications for exploration areas are currently pending grants and regulatory clearances. The company has been granted approval to begin discussions with the local aboriginal land council for both Connexion and Winchelsea Islands. Assuming that all of these issues are resolved then the company will be able to commence the land based phase of its exploration program. The on shore part of the program will consist of geological mapping, sampling by way pitting and trenching and collection of surface rocks, ground gravity surveys, airborne electromagnetic surveys followed by drilling which should be very economic due to the very shallow nature of the target area. The off shore part of the program will include a lot more aerial mapping and targeting with drilling to shallow depths completed from barges. At the completion of these two programs and assuming positive exploration results a feasibility study will be undertaken. This will be followed by funding and mine development. There is sufficient local infrastructure to support both a new mine and short transport routes by ship into growing Asian markets. One of the keys to GOT is its surface mineable manganese deposit target containing a minimum of 50 Mt of recoverable MnO2, with potential high grade ranging between 35-50% Mn, low concentrations of Si, Al, Fe, S, P, heavy metals and contained H2O, and easily separable Mn and gangue. Cash GOT had $2.6 million in its kitty at March quarter end, which is sufficient to carry out a significant exploration program. In addition, GOT has issued 10.9 million options with an expiry / strike of $0.20 on 30 June 2010. Conversion of these, which seems likely with current share price well above strike price, would bring in an extra $2.1 million in cash. Manganese Market Manganese is traded in metric tonne units or MTU‘s weighing 10 kilos / 20.5 lbs which are priced by grade and currently fall into a range between $6-9 per MTU. The price for medium to high grade manganese oxide ores is expected to remain favourable to mining companies, largely owing to steadily increasing per capita consumption of steel in the developing world. The market for stainless steels is expected to increase faster than steel in general. Further, the grade profile of ores available is shifting downwards, requiring more blending and thus higher premiums for higher grade ores. The typical prices of manganese ores offered for China recently are lump ore with Mn 44% at US$7.85/t, chips with Mn 43% at US$7.7/t and high grade metallurgical lump ore at US$8.45/t. The contractual condition to import manganese ore has been traditionally based on FOB price, although major manganese companies have recently proposed to change it to CIF price. Manganese is the fourth most used metal by weight after iron, aluminium and copper. There is no satisfactory substitute in its application as a hardening alloy element and de-oxidant in steel and the manganese market is highly leveraged to increases in demand for steel. Approximately 94% of manganese is used as a ferroalloy in steelmaking, 6% is used to produce dry cell batteries and aluminium cans. The demand for manganese is driven by the production of steel which is driven by world population growth where supply of high grade manganese ore is falling behind demand. Last year the global market for manganese traded at 54 million tonnes with 90% of this consumed by the steel industry and the remaining 10% went mostly into dry cell batteries and aluminum cans. BHP Billiton is a major supplier into this market and it sees a very bright future for both steel and manganese. If GOT is able to execute its business plan and eventually meet production targets of 2-3 million tonnes per year it will become a significant world player in the manganese market with annual revenues that reach into the low multi billions. Manganese Matters n° 10 (Issued June 22, 2010) 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. With the pullback in prices of explorers, GOT has not been immune from the malaise, its share price falling from a high of $1.04 to the current $0.63 and market capitalisation of circa <$60 million based on current issued capital, diluted for June 30 options. Market volatility and provides an opportunity for liquid investors to accumulate stock. Based on the industry average EV/Resource of $43/t the potential valuation for GOT, (assuming the company‘s target of 50Mt is proven up), is approximately $2.1 billion: (Patersons). This compares favourably with GOT‘s current market capitalisation. As this process plays out the GOT stock price will certainly reflect this progress. EUROPE back to index European silico-manganese market up almost 5% Metal-Pages, 17/06/10 The European silico-manganese market has increased €50 a tonne, or almost 5%, in the past week on supply worries amid tight availability, dealers told Metal-Pages on Thursday. The market has been spooked on delayed shipments from South Africa, where a recent labour strike at the country‘s domestic rail network provider, Transport, has affected bulk alloy shipments that are expected to be delayed until July. Silico-manganese 65/17 grade spot prices are at €1,200-1,250/tonne basis delivered. ―There is a backlog of material waiting to be processed and shipped from South African ports and so material due in Europe may be up to six weeks behind schedule,‖ one dealer said. ―Some consumers and traders are looking to cover delayed deliveries from the spot market and suppliers have upped their offer prices.‖ Dealers said there have been unusually strong bids for up to as much as 1,000 tonnes replacement material to be delivered promptly, despite heavy industry set to shut down for most of July in the seasonal slowdown, when steel producers typically conduct repairs and maintenance as plant workers take vacation. However, European ferro-alloys producers have been disciplined in their production volumes since drastic cuts last year, with few stocks to spare for spot sales through 2010 so far. Moreover, currency moves have also been a factor. The euro has dropped more than a fifth against the dollar since last November which, while making exports to countries outside the euro area more competitive, makes it is more expensive to import goods. The rate of imports, already subdued, is likely to be even weaker later this year given euro weakness and as Chinese and Kazakhstan alloy exports to the EU are subject to anti-dumping duties of more than 7% on average. Moreover, there have been only low levels of exports shipped from Norway, Ukraine and South Africa, dealers said. Yet the current price trend may be short-lived. European steel makers had been increasing their rate of production this year to currently some 80% of utilized capacities, from about 70% at the start of this year. Yet Europe-based ArcelorMittal, the world's Manganese Matters n° 10 (Issued June 22, 2010) 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. biggest steel maker, said recently it was considering halting up to three European blast furnaces in the third quarter this year to meet expected weaker demand. Underlying consumption in Europe may weaken in the second half of this year against a raft of national austerity programmes across the area, undermining a fragile economic recovery from recession, dealers said. European SiMn market set to extend consolidation Metal-Pages, 10/06/10 The European silico-manganese market has been steady in the past few weeks after gaining more than 5% around the start of last month, with tight availability and a weaker euro set to persist in shoring up support for the alloy in the short term, dealers told Metal-Pages on Wednesday. Silico-manganese 65/17 grade spot prices are at €1,150-1,200/tonne basis delivered. Buying interest among consumers in the steel sector has been relatively busy, although at a low rate, and there are enough orders through this month for prices to see out the current quarter without any losses, dealers said. ―There had been market expectation of increased prices before the end of June, although stability looks set to grip the market in the coming weeks as low key interest and limited stocks balance the market,‖ one dealer said. ―Market sentiment is cautious about demand after the seasonal slowdown, although supplies should be tight enough in Europe, with limited imports, to stem a sharp drop in prices later next quarter.‖ European steel makers had been increasing their rate of production this year to currently some 80% of utilized capacities, from about 70% at the start of this year. European ferro-alloys producers, however, have been disciplined in their production volumes since drastic cuts last year, with few stocks to spare for spot sales through 2010 so far. However, Europe-based ArcelorMittal, the world's biggest steel maker, said recently it was considering halting up to three European blast furnaces in the third quarter this year to meet expected weaker demand. Dealers said currency market have also been a factor, although that impact has been mostly supportive as there business levels have been fairly muted latterly this quarter. The single European currency has dropped more than a fifth against the dollar since last November, which, while making exports to countries outside the euro area more competitive, makes it is more expensive to import goods. The rate of imports, already subdued, is likely to be more subdued later this year given euro weakness and as Chinese and Kazakhstan alloy imports are subject to anti-dumping duties of more than 7% on average. Moreover, there have been only low levels of material shipped from Norway, Ukraine and South Africa, dealers said. European ferro-manganese market consolidates gains Metal-Pages, 10/06/10 The European ferro-manganese market has been steady in the past few weeks, consolidating gains made earlier in the current quarter, while prices look supported on low levels of stocks in the short term despite muted demand, dealers told Metal-Pages on Wednesday. High carbon ferro-manganese 75% material is at €1,125-1,175/tonne basis delivered works. Medium carbon alloy is around €1,900/tonne and low carbon alloy is about €100 premium to that. Manganese Matters n° 10 (Issued June 22, 2010) 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. ―Business has been low key, although steady in recent weeks and it‘s the type of demand the market is seeing in the next couple of weeks,‖ one dealer told Metal-Pages. ―Availability is fairly tight and there are only low levels of stocks around, so support is firm and if demand picks up at all then the obvious move is for prices to get stronger.‖ Dealers said there were no reported quarterly deals for the third quarter, although a few bids and offers have been pitched around current spot price levels. Further support has come from a weaker euro against a basket of currencies, although that impact has been limited given similar levels of import and export business, dealers said. There have been buying enquiries on an inter-merchant business level, as well as from steel makers, although there has been increasing interest from potential bidders in the United States as the euro weakens against the dollar, dealers said. The single European currency has lost about 8% in value this year. There has been no sign of a drop-off in consumer orders among steel mills despite an intended 3-week shutdown at most steel makers in Europe starting next month and into August, dealers said. That may be part of the reason behind consumer reluctance to settle quarterly delivery contracts through September after a stronger first half this year. European steel production has been ramped up to currently some 80% of annualized capacity, from only two-thirds in January. However, ArcelorMittal last said it is considering shutting three blast furnaces in the third quarter this year against expected weaker demand, although no firm decision has been made. CIS back to index Ukraine ferroalloys producers up output levels sharply from 2009 Platts, 09/06/10 Ukraine's leading ferroalloys producers, Nikopol Ferroalloy Plant and Zaporizhia Ferroalloy Plant, saw output levels in the first five months of this year rise significantly from January-May 2009 levels, UkrRudProm, an association uniting major metal producers, said Tuesday. NFP, Ukraine's largest ferroalloy producer, increased ferroalloys output by 6.2% on the month to 88,900 mt in May from 83,700 mt in April; output was up sharply from 43,900 mt produced in May 2009. In May, NFP produced 70,400 mt of silicomanganese, up from 65,100 mt in April, but production of ferromanganese fell to 18,500 mt from 18,600 mt produced in the previous month. For January through May the company produced 401,500 mt of ferroalloys, up from 157,000 mt produced in the same period of the past year. NFP produced 311,200 mt of silicomanganese in the first five months of 2010, up from 144,300 mt in the year-earlier period, while production of ferromanganese increased to 90,300 mt from 12,700 mt. ZFP, Ukraine's No. 2 ferroalloys producer, increased ferroalloys output 3% on the month to 33,800 mt in May from 32,800 mt in April. ZFP produced 22,900 mt of silicomanganese, up from 19,700 mt produced in April, while output of ferrosilicon decreased to 4,800 mt from 5,100 mt and production of ferromanganese fell to 6,100 mt from 6,400 mt. For January through May the company produced 153,700 mt of ferroalloys, up from 55,200 mt produced in the same period a year ago. ZFP produced 94,700 mt of silicomanganese in January-May, up from 23,000 mt in the year-earlier period, while production of ferromanganese increased to 29,100 mt from 16,500 mt, output of ferrosilicon rose to 23,900 mt from 11,000 mt and output of metallic manganese rose to 6,000 mt from 4,700 mt. Manganese Matters n° 10 (Issued June 22, 2010) 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. ICDA - CIS gaining ferro-alloys market share Metal-Pages, 27/05/10 Russia, Ukraine and Kazakhstan are gaining market share over China is bulk alloys, Olga Grigorieva, senior analyst at Metal Expert, Ukraine told the International Chromium Development Association (ICDA) meeting in Almaty today. In ferro-silicon, manganese alloys and ferro-chrome respectively, the three large CIS producers have the competitive advantage of both offering high grade and broader range of products and unlike China not being constrained by export duties. China, which has decided to keep duties export duties of 20% on ferro-manganese, silico-manganese and ferro-chrome and a 25% duty on ferro-silicon has seen its share of the market shrink, and in ferro-chome it is overwhelmingly a net importer. China is self- sufficient in ferro-manganese and ferro-silicon, and is a net importer of manganese ore but not alloys. The global stainless steel market in 2009 fell to a lesser degree than that of ferro-alloys which saw the turnover of manganese alloys market fall by half from 5.25 million tonnes in 2008 to 2.78 million tonnes in 2009 and a 37% drop in turnover of ferro-silicon to 1.7 million tonnes, Grigorieva said. The ferro- chrome market saw the smallest, 15%, drop in turnover to 5.2 million tonnes. China's decision to retain the export duties on bulk ferro-alloys to protect domestic resources led to its market share in manganese alloys falling from 21% in 2008 to just 6% in 2009, while CIS producers gained 36% of market share, up from 23% in 2008. In the ferro-silicon market last year, China lost its 2008 leading share of the market of 47%, which fell to 26% in 2009. Russian ferro-silicon producers have meanwhile widened their share of the market from 12% to 17% in the same period. In ferro-chrome, where China is focused on domestic consumption, the market share of CIS producers was stable over the past two years at 23%, while South Africa increased its market share from 54% to 57%. Metal Expert expects global stainless steel production, which fell 22% last year, to return to exceed pre- crisis level in 2010. Meanwhile demand for bulk alloys in the main consuming regions will not recover until 2012, it forecasts. In the CIS, which is an export-oriented producer of ferro-alloys, in 2009 production of ferro-alloys fell in 2009 after a rise in 2008 and prices followed global trends. The region's production of manganese alloys last year fell by 25% and domestic consumption by 21%, with exports down by a smaller margin of 17%. In 2010, Metal Expert forecasts a positive trend, with a 26% increase in production. It expects exports to rise by as much as 37% and a slower 12% growth in domestic consumption. Ukraine will increase its share of CIS production and step up its output this year. In 2010 it is expected to produce 1,121,000 tonnes of manganese alloys. Of this output 70% will be exported to non-CIS countries. According to Metal Expert, CIS ferro-silicon production fell 14% last year to 680,000 tonnes, with domestic consumption down as much as 45% and exports don 11% on 2008. This year Olga Grigorieva said the forecast is that production will rise 11% to 670,000 tonnes, with a 50% increase in domestic consumption against last year. Ferro-silicon exports could be stable in 2010. Ferro-chrome production in the CIS was about 6.5% dome year on year in 2009. Russia is the largest consumer in the CIS, but ferro-chrome is primarily an export product for the CIS. According to Metal- Expert production should grow 5% this year, and Kazakhstan, the largest producer is targeting the Southeast Asian market. In 2009 70% of CIS exports of ferro-chrome wet to Southeast Asia. The largest producer of manganese alloys in the CIS is Privat Group which controls Nikopol, Zaporozhye and Stakhanove smelters in Ukraine and owns US producer Felman, Georgia's Zestafoni Manganese Matters n° 10 (Issued June 22, 2010) 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. plant and the currently idle Feral and Stalmag plants in Romania. The group is an integrated producer whose assets, apart from manganese mines in Ukraine, include Ghana manganese and Consolidated Minerals in Australia - it is planning to incorporate the latter. It accounts for 8% of global production of manganese ore making it the third largest producer in the world and in 2009 it was the world's second largest after BHP. ChEMK group is Russia's largest producer of ferro-silicon, including its flagship Chelyabinks plant, Kuznetsk Ferroalloys plant and Yurga Ferroalloys, a new plant which manufactures nine types of silicon alloys. The company's advantage as a producer is the availability of locally generated energy which is significantly cheaper than in China. ENRC in Kazakhstan is the world's largest producer of ferro-chrome by chromium units. "ENRC intends to acquire a stake in Samancor in South Africa which will boost ENRC's share of the global market," Grigorieva said. Although the two producers are competitors in the market, the shareholders of Samancor's owner IMR are also the founding shareholders of ENRC. Again Kazkhstan's advantage over other producers is the abundant integrated power supply - ENRC generated 14.5% of all Kazakhstan's electricity in 2008. "The CIS producers have a competitive advantage in the ferro-alloys market," Grigorieva said. "Ukrainian silico-manganese contains 73%-75% manganese which is a very high grade compared with the world average of 65%. Russian ferro-silicon producers' competitive advantage is that they can offer a wider range of grades than China. The advantage of the ferro-chrome produced in Kazakhstan is its blending ratio, high in chromium and low in titanium, silicon and phosphorus. "...The geographic location is another advantage as the Baltic and Black Sea ports means Russian producers can easily transport material anywhere to neighbouring countries in Europe, in Asia and the Middle East." AFRICA & MIDDLE EAST back to index Union says hopes to reach deal with Eskom Reuters, 21/06/10 South Africa's biggest union said it was hopeful fresh wage negotiations on Monday with state-owned power utility Eskom could avert a strike that could disrupt electricity supply during the World Cup. "I hope it won't come to a strike," said Lesiba Seshoka, spokesman of the National Union of Mineworkers (NUM), which last week warned its members could down tools in a labour action that could cripple manufacturing and mining. "We are prepared to give negotiations a chance, but if there is no resolution, then we will call for a strike." The union, which represents about half of the 32 000 workers at the utility, wants a pay rise of more than three times the inflation rate of 4,8% as well as a housing allowance. Eskom has offered an 8% raise and a once-off, 1% payment as a housing allowance. Analysts see a last-minute deal as likely. Seshoka said the unions were ready to give the talks a chance for a few days after being advised by a mediator to tone down their strike threats. Should the strike go ahead, two other unions have said they may join in the work stoppage, raising concerns about power supply in Africa's biggest economy. An official at Eskom said the talks were due to start later in the afternoon, and may run for a few days in a bid to prevent a strike during the first World Cup on the African continent. Manganese Matters n° 10 (Issued June 22, 2010) 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. The three unions threatened to strike over pay last year, but backed down at the last minute after they won an increase much lower than what they had demanded. Eskom has said should the strike go ahead, it will implement contingency measures to minimise the impact. A strike is unlikely to hamper electricity supply to stadiums that have standby diesel generators, but may anger millions hoping to watch matches on television. Worse still for the economy, manufacturers and mining companies in the world's top platinum and fourth largest gold producer could be forced to shut operations, and this may likely impact metal production and prices, analysts said. A possible work stoppage at Eskom follows a series of threats of labour action to freeze transport, abandon security posts and tie up immigration at airports during the World Cup if demands for better wages and working conditions were not met. Economists have criticised unions for using the World Cup to squeeze pay hikes far above inflation, which could dent the economy as it emerges from its first recession in 17 years. Eskom workers, represented by three unions - the NUM, the National Union of Metalworkers of South Africa and Solidarity, originally demanded an 18% wage increase and a housing allowance, while Eskom offered 5,5%. Eskom has increased its wage offer and the unions lowered their demand to 15%. Seshoka said the average worker at Eskom earns about R5 000 a month, and a housing subsidy of R1 000. The unions want this replaced by a housing allowance of R5 000. Gabon to tale stake in France's Eramet Reuters, 17/06/10 Gabon has agreed to buy a stake in French mining group Eramet and to raise its holding in their joint local manganese miner Comilog to around 35 percent from 25 percent, an Eramet spokesman said on Thursday. The agreement in principle was reached by Gabon President Ali Bongo and Eramet Chief Executive Patrick Buffet, the spokesman said. French daily Les Echos had reported Gabon agreed to buy between 4 percent and 5 percent of Eramet. The Eramet spokesman however had no details on the size or the timetable for the deal. A source close to the matter recently told Reuters Bongo wanted his country to take a stake in Eramet. Such a move would give it a similar status to the provincial authorities in New Caledonia, which, through holding company STCP, are minority investors in Eramet's nickel subsidiary SLN and own 4 percent of Eramet. China firm to build new manganese processing plant Metal-Pages, 15/06/10 Superdeal Investment, a Chinese firm, is set to establish a large-scale manganese furnace to process manganese ore in Kabwe, Zambia at a cost of more than $2 million, according to the Times of Zambia. Company chief executive officer, Luobin Bin Luo, said the furnace in the Central Province town will enable them to process manganese ore in Zambia instead of exporting the raw material, according to the report. Manganese Matters n° 10 (Issued June 22, 2010) 27 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. He said the development will contribute to the growth of the Zambian economy in adding value to manganese, and that the development of the new furnace will create about 400 jobs. ―We have a huge investment in Zambia and our plans are to put up a large furnace besides the plant we have,‖ he said in the report. ―We have already presented our investment plans to the Zambia Development Agency and our intention to construct a furnace right here in Kabwe which will boost our production. ―Right now there is little activity at our plant because of the non-availability of raw materials‖. South Africa boosts manganese, chrome production Metal-Pages, 11/06/10 South African production of mined manganese and chrome jumped in April this year, according to Statistics South Africa (Stats SA) this week. Manganese ore more than doubled at 104% year-on-year, while chromium ore production jumped more than 42%. However, copper production fell almost 22%, nickel production fell about 20% year-on-year and platinum-group metals (PGMs) production was off more than 8% year-on-year. Jupiter advances manganese project in South Africa Metal-Pages, 11/06/10 Australian junior miner Jupiter Mines has almost completed its acquisition of a 49.9% stake in the Tshipi Kalahari Manganese Project in South Africa from a group of investors, Pallinghurst Resources and Investec, and will start drilling at its Oakover Manganese project this month. Jupiter expects all aspects of the Tshipi transaction to be finalised promptly. That will mean seeking shareholder approval for the transaction through an extraordinary general meeting (EGM) in August this year. The Department of Mineral Resources has awarded the mineral rights for the Tshipi Project. Jupiter will start drilling at its Oakover Manganese project this month. The company has identified a number of first pass exploration targets, which will form the basis of an exploration programme. Jupiter had earlier reported exploration results from Oakover, with high-grade surface sampling results assaying up to 62.6% manganese. Transnet hopes to pursue big commodity-linked expansions in partnership with private sector Engineering News, 10/06/10 State-owned transport utility Transnet has finally accepted the bulk of the blame for the ongoing underperformance of the export coal line from Mpumalanga province, to the port of Richards Bay, in KwaZulu-Natal, which recorded its fifth straight year of volume decreases in 2009/10. Acting CEO Chris Wells admitted on Thursday that the disappointing performance was primarily the fault of Transnet Freight Rail, notwithstanding the softening of the coal export market in line with the recession and some seasonal factors that affected delivery from the mines themselves. The matter has been the subject of something of a public blame game between the freight logistics group and South Africa's coal miners since 2005, during which period the export channel has not once operated at its 71-million-ton a year nameplate, and volumes have consistently decreased. Manganese Matters n° 10 (Issued June 22, 2010) 28 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 line disappointed yet again during Transnet's 2009/10 financial year, when 61,8-million tons of the material, which is used to fuel power stations in Asia and Europe, was moved - it was also the line's worst performance in five years. In fact, volumes have slipped by 3% on a compound yearly basis between 2006 and 2010, falling from 68,8-million tons in 2005/6 to a dismal 61,8-million tons in 2009/10. "Export coal has not been a good story for the past five years," Well lamented, adding that the line had been in persistent decline from the world-class levels achieved during 2004/5. However, he said that the group was "determined" to turn the line around and "move coal onto a growth trend", noting that during the final quarter of the financial year to March 31, 2010, volumes were increased by 6,3%. Transnet was working with the coal industry to close the gap between the current performance and the available capacity of close to 70-million tons, as well as on a plan to raise throughput to 81-million tons by 2014/15 and beyond that level, to between 90-million tons and 100-million tons, at a later stage. However, the R15-billion project necessary to achieve that target would depend on it securing take-or- pay contracts from the coal miners, which would only participate if they were confident about market prospects and if they were able to secure sources of supply. The privately held Richards Bay Coal Terminal had recently been expanded to handle 91-million tons, but wells said that rail was only one impediment to matching that capacity, with an inadequacy of mining capacity being the other. Currently, the coal miners were also on short-term tariff contracts with Transnet while the details of the expansion plans were being considered. IRON-ORE AND MANGANESE By contrast, the utility had already signed take-or-pay contracts with the Kumba Iron Ore and Assmang to raise throughput to 60,7-million tons by 2013/14. In 2009/10 the export volumes on the iron-ore line from Sishen to Saldanha Bay grew by 21,5% on the previous year to 44,7-million tons and plans were in place to rail some 50-million tons in 2010/11. "We are also in talks with the iron-ore and manganese miners about the next big expansion," Wells said. The iron-ore industry would like to increase its yearly exports to 80-million tons, while the manganese miners, which were currently restricted to yearly exports of seven-million tons, through Port Elizabeth and Durban, were keen to raise that to beyond 14-million tons. The manganese industry is keen to piggyback on the Sishen-Saldanha success and export this additional tonnage through the West Coast harbour, but Transnet was still considering a plan that involved exports through the new Ngqura harbour, in the Eastern Cape. Wells said that there was still no finality on which route would be selected, but stressed that the feasibility studies were being conducted jointly with the industry, with the support of an independent consultant. He said that the project would involve capital expenditure well in excess of the R15-billion required to expand the coal channel. In fact, Transnet is hoping to pursue both the iron-ore and the manganese expansion under its private sector partnership (PSP) scheme, which still required sanction from its shareholder. Manganese Matters n° 10 (Issued June 22, 2010) 29 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. However, the PSP plan is anticipated to be opposed by some elements of the governing political alliance of the African National Congress, the South African Communist Party and the Congress of South African Trade Unions (Cosatu). Cosatu, in particular, is likely to oppose any move that could be perceived as an effort to privatise the country's rail, ports and pipelines. But Transnet said that it did not want to be an impediment to the growth in mineral exports, such as coal, iron-ore and manganese, as it has been previously, owing to its balance sheet constraints. A separate PSP unit had already been established to create the capacity to pursue public-private partnerships, but Wells said that he could not discuss project details until its PSP approach had been approved by its board and its shareholder. In fact, given the political sensitivities surrounding the model, it was likely that Cabinet would have to endorse the proposal - a process that Transnet hoped would be completed during 2010. SiMn up as South Africa works through backlog Metal Bulletin, 07/06/10 Silico-manganese rose on Friday as buyers struggled to source material in the aftermath of the Transnet strike. Workers at South Africa‘s transport parastatal went on strike in the second week of May over a wage dispute, causing major bulk alloy producers and traders to declare force majeure on shipments out of South Africa. Though the strike has now been resolved, the backlog of material piled up at South African ports is only slowly being worked through. ―The problems in South Africa are causing a bit of a scramble for material, and higher prices are being quoted,‖ a trader said. Silico-manganese basis 65-75% rose to €1,180-1,250 ($1,416-1,500) per tonne from €1,100-1,200 per tonne previously, and market participants said the lower end of the range is already no longer available. ―We sold at the start of the week at €1,180 [per tonne] and I already wish we didn‘t,‖ the trader said. ―I wouldn‘t sell there now, and I‘m confident that it will be well above €1,200 shortly.‖ Buying interest spiked in the week as consumers looked for replacement material to those units tied up in South African ports. ―We had enquiries for 500-1000 tonnes yesterday, and when you get enquiries like that it‘s clear that something‘s happening,‖ the trader said. ―There are no offers below €1,200 anymore.‖ With stacks of containers still held at South African ports that will take some time to clear, prices could rise further despite the uncertainty plaguing the commodities markets due to the eurozone debt crisis and questions over the sustainability of industrial demand in China. Ethan Minerals Commences Trial Mining At Zambia JV Manganese Project Proactive Investors, 07/06/10 Ethan Minerals has commenced initial trial mining on several of its manganese project sites, as part of a trial for the company‘s due diligence process at its JV manganese project in Zambia, Southern Africa. Ethan said in May the JV prospects had identified outcrops of manganese which are currently being mined by traditional open pit methods. The company expects economic mining to commence on conclusion of the due diligence process. Ken Fitzgerald, executive director, said sampling of the manganese ore is currently being carried out on several of the current in-situ ore exposures, each of the trial mine packages as part of Ethan‘s due Manganese Matters n° 10 (Issued June 22, 2010) 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. diligence process and all current ore stockpiles. All samples will undergo independent analysis with the complete results being announced once received, along with the confirmation of additional developments within the next couple of weeks. Ethan announced on 20 May 2010 a JV through its wholly owned subsidiary Allegra Mining Zambia with the Zambian based company Eagle Eye Mining Zambia Limited. Under the terms of the JV, Allegra Mining will "derive 70% of net revenues existing in identified prospects and any future prospects offered by Eagle Eye to Allegra Mining." The JV covers an area of approximately 77km² and encompasses 5 known manganese prospects located 20km from existing infrastructure including a railway loading station that runs to the port of Dar Es Salaam. Arrangements are in place with the port authorities of Dar Es Salaam to receive and ship the manganese ore. Mining injects US$2.9bn into economy My Joy (Ghana News), 02/06/10 Ghana‘s mining and mineral industry injected a total of US$2.9 billion into the economy in 2009, representing an increase of 27 percent from the 2008 figure of US$2.3billion. Manganese revenue also increased, by four percent from US$62.3million in 2008 to US$64.9 million in 2009.A strong result, considering the fact that shipment of the mineral declined by seven percent from 1,089,025 tonnes to 1,012,941 tonnes in the same period. The fall in shipments was on account of the credit crunch, which had a huge adverse impact on businesses all over the world as well as on the demand for minerals. Business for Ghana Manganese Company started to improve from the beginning of the second quarter onwards, following a rise in the global aggregate demand for the mineral. In these circumstances the company was able to increase the price of manganese, which eventually increased its revenue. Ivory Coast Mn ore shipments off 25% in Jan-Apr ‘10 Metal-Pages, 01/06/10 Ivory Coast exported more than 37,000 tonnes of manganese ore in the first four months of this year, off almost 25%, or more than 12,000 tonnes shipped in the same period last year, according to official customs data. The country shipped about 7,900 tonnes of ore in April this year, from about 35,000 tonnes in April 2009. Ivory Coast exported about 147,500 tonnes of manganese ore in total last year – off about 29,000 tonnes, or 16%, on more than 176,000 tonnes shipped in 2008, data showed. Shipments had been affected on work stoppages at one of the mines in the country in the first six months of last year. S Africa transport strike may end on new deal Metal-Pages, 27/05/10 South African state-owned transport utility Transnet looks set to reach a wage deal with union workers on Thursday to end a transport strike that has crippled rail and port infrastructure. Manganese Matters n° 10 (Issued June 22, 2010) 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. The strike, now in its third week, has affected metal exports in one of the world's biggest suppliers of the power station feedstock, and may impact the country's target of exporting 65 million tonnes this year. The transport strike has also dented exports of coal, cars, fruit and wine to Europe and Asia, as well as imports of car parts and fuel and cost the South African economy at least 7 billion rand ($890 million) in lost production and sales. The South African Transport and Allied Workers Union (Satawu) said a majority of its members had voted for a new offer from Transnet. "We do have a majority... but we are still waiting for votes from one province. We want to hear from them before we make the call," Satawu Ezrom Mabyana told news agency Reuters. Recent strikes have drawn criticism from economists and the central bank who say unions are trying to hold the government and state enterprises to ransom by staging strikes close to the soccer World Cup, to squeeze pay increases above inflation of 5.1%. Analysts said the strike is set to have long-lasting consequences on the country's exports, with South Africa losing some contracts to other markets, such as India or Brazil. Retrenchments may also be looming, they said. World miners with operations in South Africa, such as Anglo American, Xstrata and the world's top steel maker ArcelorMittal have declared force majeure on the supply of iron ore, ferro-chrome and steel. However, manganese supply in South Africa, one of the world‘s major suppliers, was being shipped domestically and internationally, South African suppliers told Metal-Pages.com a couple of weeks ago. (http://metal-pages.com/news/story/46763/) AMERICAS back to index US ferro-manganese market eases again Metal-Pages, 21/06/10 Spot ferro-manganese prices in the United States have eased again in the past couple of weeks amid a steady rate of offers from suppliers looking to book profits before the seasonal slowdown, dealers told Metal-Pages on Monday. ―Steel makers are not really interested in buying raw materials before the shutdowns and things have stabilised in terms of production in the steel sector,‖ one dealer said. ―That and what looks like a slowdown in demand in the second half of this year, from the first six months, is encouraging cheaper offers.‖ Dealers said they expected more losses in short term ferro-alloys prices until the steel sector returns in full and a clearer picture appears of demand through the rest of the third quarter. High carbon material has eased to $1,350-1,400 a long ton basis delivered, while refined ferro- manganese grades, such as medium carbon material have moved to $1.30-1.35 a pound and low carbon ferro-manganese to $1.40-1.45/lb. Steel makers have been building stocks from the spot market where suppliers have been offering some of the 24,000 tons of manganese alloys sold by the government in April. A strengthening dollar is also spooking alloy suppliers, as a stronger domestic currency typically attracts more imports. Manganese Matters n° 10 (Issued June 22, 2010) 32 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 latest US steel industry data showed that capacity utilization dropped about half a percent to a fraction below 74% in late May, the first weekly drop in recent months. Brazilian steelmakers count electricity cost impact on alloys Metal-Pages, 21/06/10 Brazilian steelmakers are complaining about the rising cost of electricity, which they say discourages the production of products such as ferro-alloys and aluminium, the Valor Economico newspaper reported. Usiminas boss Wilson Brumer last week pointed to inflation rises totaling 150% since 2002, underlining that inflation has risen by 83% in comparison over that period. Electricity costs can amount to as much as 40% of the cost of ferro-alloys and 35% of aluminium, according to Brumer's calculations. ―New production of these items is no longer economically viable,‖ Brumer reportedly said. Brazilian ferro-alloys producers have so far presented a mixed picture of the year, with some saying buying is already back to pre-crisis levels and others such as Gerdau‘s speciality metals division saying it is unlikely to do so until 2012. Brazil's steel consumption will grow 24.4% to 23.1 million tonnes this year, while exports are estimated to increase 27.4% to 11 million tonnes, the Brazilian Steel Institute (IABr), the trade body representing the sector forecasts. The Brazilian economy grew by 9% in the first quarter compared to the same period last year - the biggest such increase since statistics began being recorded under the current system, according to figures released by national statistics institute IBGE. The economy grew 2.7% in the three months of this year versus the closing quarter of 2009 – the biggest increase since the first quarter of 2004, when the economy expanded 2.8% versus the previous three months. Vale mulls new ferro-alloy plants in Brazil Metal-Pages, 17/06/10 Brazilian miner and steelmaker Vale is considering setting up two new manganese ferro-alloy capacity in the country, José Carlos Martins, Executive Director for marketing Sales and Strategy, Ferrous told Metal-Pages at the recent IMnI conference in Paris. "We are looking to replace the existing old plant with new capacity to meet demand," he explained. "We are looking at capacity of 500,000 tonnes in the south, and the same capacity in the north. Where we will build the plant depends on whether we want to be close to the market in the south or close to the mines, and also power supply - and the power is in the north." The company's main manganese mine (Vale's total capacity is some 3 million tpy of ore), is Azul in Pará state in northern Brazil. The company's current capacity of some 495,000 tpy of manganese alloys is centred further south in Minas Gerais and Bahia, where the company's smaller mining operations are located. The main market, i.e. the bulk of the steel capacity is also in the south. Vale director Pedro Gutemberg explained that it may make sense to locate the plant in the south to minimise the transport distance to customers. The timescale of the project is still uncertain, "currently we are considering it," he said - and the project will also have to clear environmental hurdles, which will take time. "Brazil has very tough environmental regulations, for mining and for the industry in general, so getting environmental approval is difficult and it is a very long process. This can take several years," he said. Manganese Matters n° 10 (Issued June 22, 2010) 33 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. Brazil's demand for manganese alloys is set to grow by more than 50% over the next five years, with Vale projecting an increase of 35,000 tonnes in 2011 and increases between 20,000 and 30,000 tpy in the years to come in line with steel expansions, Martins said in his presentation at the conference. This will take annual consumption from less than 300,000 tonnes projected this year to more than 425,000 tonnes by 2016. The growth is supported on one side by the captive manganese mines, and on the other by the growing domestic steel sector. Once Vale's four steel projects across the country are implemented over the next three to five years, domestic steel capacity will go up by another 15.5 million tpy of slab. The first project, 5 million tpy CSA plans in Rio de Janeiro, which is a joint venture with ThyssenKrupp will be commissioned this Friday, June 18, Martins confirmed. Brazil's manganese industry growth is also supported by China's growing demand for high grade manganese ore - Chinese ferro-alloy producers always blend domestic and imported ore. The share of imported (seaborne) ore in china's consumption is growing, from 41% in 2007 to 57% in 2009, according to Vale, and is expected to increase further from 58% estimated this year to 60% in 2011. Brazil and Vale have increased their expected share from 6% (Vale 4%) of China's manganese ore imports in 2007 to 13% (Vale 10%) last year. The company is trying to capitalise on its manganese resources by maximising production from its Azul mine, by using lower grade ore and fines. It is planning to build a pelletising plant, to be commissioned in 2013 to enable it to use ore fines and offer a premium product, as it does in its iron ore segment. The link between Brazil as a supplier and China as a customer is mutually important, however there is good case for relocating more steel production to Brazil, closer to resources, Martins said. "My advice is go West and South," he said. "To produce one tonne of steel you need to move four tonnes [of raw materials] - if you have a well located steel mill then your production will be low cost," Martins explained. "CSN steel owned by ArcelorMittal is the lowest cost producer in the world. In Brazil you can benefit from a growing steel market and the low cost of production." At $298/tonne of steel slab in 2009, Brazil sits at the bottom of the global steel cost curve, before CIS at average $308/tonne and on the other end from China at the high end at $413/tonne. This compares with the world average of $370/tonne, Martins pointed out. The historical EBIDTA margin of Brazilian companies, at 32% is much higher than the 14% world average, and over the course of five years (2005-2009) Brazil's leading steelmakers offered on average a 42% shareholder return, as against the world average of 15%. Vale has four major steel ventures totalling 15.5 million tpy at various stages of development, including ThyssenKrupp-Vale joint venture CSA with 5 million tpy of capacity, which will be commissioned before the end of this week. Others are ALPA in Pará state in the north, which will have capacity to produce 2 million tpy of slab and 0.5 million tpy of rolled products and is scheduled for start up in 2013 and, also in the north, CSP in Ceará with 3 million tpy of slab capacity, with a 2014 planned start-up. In the south, the 5 million tpy CSU plant planned in Espírito Santo is expected to e commissioned in 2014 or 2015. US silico-manganese market falls almost 10% Metal-Pages, 07/06/10 The spot silico-manganese market in the United States has fallen almost 10% in the past couple of weeks, dragged down on increased offers against weaker consumer buying interest as the seasonal slowdown approaches next month, dealers told Metal-Pages this week. US spot silico-manganese prices have moved to 62-65 cents a pound, from 69-71 cents/lb. Last October the market hit an annual peak of 75 cents/lb. Manganese Matters n° 10 (Issued June 22, 2010) 34 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. ―Steel makers seem content to use their stocks in the run-up to seasonal shutdowns next month and it seems they will be little interested in buying from the spot market for most of July and possibly early August,‖ a dealer said. US Steel, the number one steel producer in the States, booked several hundred tonnes of silico- manganese at 70 cents/lb a few weeks ago, although consumer bids have been rare since, dealers said. World metals markets, however, have been pressured recently on investor worries about Europe‘s ability to control its debt problems and how that may impact on its short-medium term industrial growth, as well as reported weakness in spot Chinese iron ore prices and weaker US steel scrap prices. Moreover, US Steel has some operations in central Europe and a fall in European productivity may hurt demand for its products, which are used in everything from cars to construction and appliances. In terms of US supply, manganese alloy production issues have also been resolved at domestic producer Eramet Marietta, which has repaired and refurbished a damaged furnace that it shut down in March. However, US steel mills have so far shown little buying interest in raw materials for the third quarter and even cheaper spot prices are expected in the short term. The latest US steel industry data showed that capacity utilization dropped about half a percent to a fraction below 74% in late May. A strengthening dollar is also spooking alloy suppliers, as a stronger domestic currency typically attracts more imports. US ferro-manganese market drops under more offers Metal-Pages, 03/06/10 Spot ferro-manganese prices in the United States have dropped again in the past week amid increased offers from dealers anxious to cash in ahead of expected further weakness in the seasonal slowdown next quarter, industry sources told Metal-Pages this week. High carbon material has lost $50 to $1,400-1,450 a long ton basis delivered, while refined ferro- manganese grades, such as medium carbon material have moved to $1.35-1.40 a pound, from $1.40- 1.45/lb. Low carbon ferro-manganese has also eased 5 cents to $1.45-1.50/lb. ―The market is expecting prices to drop another 5% or so, perhaps more, in the coming weeks as steel makers have indicated they will shut for 2-3 weeks in July and into August,‖ a dealer said. ―Steel makers have been building stocks from the spot market where suppliers have been offering some of the 24,000 tons of manganese alloys sold by the government in April, and dealers want to get as much as that off their books as possible before prices drop again.‖ Dealers said uncertainty about consumer demand after the seasonal slowdown in the States, which is going through a fragile economic recovery after a huge slump, has also prompted increased offers from suppliers. Manganese alloy production issues have also been resolved at US producer Eramet Marietta, which has repaired and refurbished a damaged furnace that it shut down in March. However, steel mills have so far shown little buying interest in raw materials for the third quarter and cheaper spot prices are expected in the short term. The latest US steel industry data showed that capacity utilization dropped about half a percent to a fraction below 74% in late May. Manganese Matters n° 10 (Issued June 22, 2010) 35 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 strengthening dollar is also spooking alloy suppliers, as a stronger domestic currency typically attracts more imports. DNSC announces amended offerings of stockpile metals Metal Bulletin, 01/06/10 The Defense National Stockpile Center (DNSC) has announced the dates for its amended offering schedule for ferrochrome, chromium metal, ferromanganese, beryllium and germanium. Ferromanganese, previously offered monthly, will be posted on a bi-monthly basis on the second Tuesday in February, April, June, August, October and December. GENERAL INFORMATION back to index Ryan’s Notes Weekly Ryan’s Notes, 21/06/10 US bulk ferroalloy buying underway Third-quarter bulk ferroalloy buying was under full swing last week. Most of the business booked last week was for silicomanganese, with prices ending up around 64¢, delivered, for bargeload quantities. Some of the fixed-price material was for second half 2010 shipment. Small quantities of highcarbon ferromanganese were concluded at $1,380 per lt, delivered; there was no appreciable medium- or low- carbon ferromanganese business. Eramet Marietta is running two furnaces to make high-carbon ferromanganese and is working to start its third furnace to produce silicomanganese. Prices for 75% ferrosilicon ended the week at around 62¢, ex warehouse, and there was a growing resistance by sellers to lower their prices. Due to the Chinese holiday, there were no significant changes in Chinese bulk ferroalloy prices last week. A European mill purchased 600 mt at €1,290 per mt, ddp, but sellers said the mill could take 74% Si material with a 2% Al and 0.10% C content. Other businesses were concluded at around $1,330, delivered. ―No one is looking to move the needle this quarter,‖ one seller said. ―We are just hoping to hang on to the current price levels.‖ The EU has decided to retain the import duty on primary aluminum at 3%, or half the ―normal‖ duty. The EU still hasn‘t made a decision on a request by a few member states to eliminate or substantially reduce the normal duties on a wide range of products, including most ferroalloys. The ferroalloy duties are likely to be modified, but there is some question on whether the EU will reduce the normal duties on commodities, such as silicomanganese and ferrosilicon, that are also subject to penalty duties. US imports of high-carbon ferromanganese were 49,225.2 mt in the first four months of 2010 and 10,276.9 mt in April vs. 30,028.1 mt and 2,401.1 mt, respectively, in the same 2010 periods. The major suppliers in the first four months of 2010 (April 2010 in parentheses) were: South Africa, 31,976.4 mt (7,907.5 mt); France, 4,726.6 mt (0); and Kazakhstan, 1,450 mt (1,450 mt). Imports of medium-carbon ferromanganese were 26,594.4 mt in the first four months of 2010 and 4,442.2 mt in April vs. 9,178.4 mt and 1,341.9 mt, respectively, in the same 2009 periods. In April, Mexico supplied 1,641.3 mt, while South Africa contributed 1,267.5 mt. US imports of low-carbon ferromanganese were 18,315.7 mt in the first four months of 2010 and 4,365.9 mt in April, of which 2,434.6 mt came from China and 1,900 mt came from Mexico. Manganese Matters n° 10 (Issued June 22, 2010) 36 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 US imported 44,350.4 mt of 55-80% ferrosilicon in the first four months of 2010 and 6,553.8 mt in April vs. 18,758.1 mt and 1,705 mt, respectively in the same 2009 periods. Major suppliers in the first four months of 2010 (April in parentheses) were: Russia, 30,307.4 mt (5,247 mt); China, 4,484.9 mt (100.4 mt); Canada, 3,647.1 mt (894.4 mt). US imports of silicomanganese were 93,392 mt in the first four months of 2010 and 22,411,8 mt in April vs. 41,030.7 mt and 2,597.6 mt, respectively, in the same 2009 periods. The major suppliers in April (first four months in parentheses) were: South Africa, 13,078.9 mt (51,752.9 mt); Australia, 5,398.7 mt (14,051.3 mt); Mexico, 1,800 mt (4,800 mt); Norway, 1,519.3 mt (12,326.7 mt). In April Georgia supplied 600.8 mt and 5,153.3 mt in the first four months of 2010; most analysts believe the Georgian material was imported by Privat for Felman. Gabon and Eramet have reached a tentative agreement that would allow the Gabonese government to increase its stake in Comilog to as much as 35-40%, up from 25%. The African country also wants to buy an interest in Eramet, Comilog‘s parent company of between 4-5%. An Eramet spokesman gave no details on the size or the timetable for the deal. Ryan’s Notes Weekly Ryan’s Notes, 14/06/10 Manganese alloy tags under pressure With US bulk ferroalloys in a surplus, the market was surprisingly competitive last week. High- and medium-carbon ferromanganese suffered the greatest price erosion, while ferrosilicon prices were down only marginally. Most sellers have little confidence that third-quarter buying would be at second-quarter levels. European ferrosilicon prices, however, were down to around €1,300 per mt despite the weakness in the euro. While most of the Chinese bulk ferroalloy prices were unchanged, ferrosilicon quotes jumped back above $1,420 per mt, f.o.b. The immediate rise in the price was triggered by higher energy costs even though the smelters realized that the export market is no longer viable. A long-term concern, however, is that the Chinese government is planning to do away with some export tax breaks and may even increase the export VAT just when Western governments are complaining to the WTO. As a result, many sellers have put in clauses that obligates the buyers to pay for any adjustment. The only other option is for buyers to export the ferrosilicon before July 1, when the new regulations are supposed to take effect. ―Once again the market is reacting to possibilities but not facts,‖ one analyst said. ―Still there are real risks that no one can afford to ignore.‖ Chinese exports of electrolytic manganese metal and some manganese alloys continue to be affected by smuggling through Vietnam which enables exporters to evade the 20% export duty. Smelters located along the China Vietnam border have been active exporters, making inland smelters less cost competitive. However, the government has yet to crack down on the smuggling. China legally exported 40,012 mt of manganese metal in the first four months of 2010 v s. 32,894 mt in the same 2009 period. Exports were mainly to Japan, 16,109 mt (6,408 mt in the same 2009 period); to Rotterdam, 5,202 mt (11,048 mt); US, 4,129 mt (820 mt); and South Korea, 3,187 mt (9,617 mt). China‘s legal exports of silicomanganese were 24,017 mt in the first four months of 2010 vs. 34,895 mt in the same 2009 period. Exports were to Japan, 14,021 mt (24,603 mt); Taiwan, 1,660 mt (3,833 mt); Thailand, 3,100 mt (1,728 mt); and South Korea, 2,574 mt (1,700 mt). DLA did not offer any high-carbon ferromanganese at its latest BOA sale. Manganese Matters n° 10 (Issued June 22, 2010) 37 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. IMnI conference: Raw materials key for steelmakers - Corus Metal-Pages, 14/06/10 The competitive advantage of cheap labour which had distinguished producing countries such as China will no longer be the determining factor in the steel industry as more and more of its production costs comes from raw material, Kirby Adams, chief executive of Corus told delegates at the International Manganese Institute (IMnI) conference in Paris. The raw materials portion, which accounted for 36% of crude steel costs in 2000 rose to 55% in 2009 and, with the rise in iron ore and coking coal prices in particular, this year is expected to make up 67% of the cost of crude steel. China has had a massive impact on the raw materials market, accounting for two thirds of imported iron ore consumption worldwide. "Labour cost is no longer relevant," Adams said, adding that whereas Asian economies had a great advantage in terms of labour costs in the past decades over the more mature countries, this is becoming a less important factor and the playing field is levelling out as efficient use of raw materials becomes key to competitiveness. "I am relatively optimistic about the European steel industry because in terms of efficient use of raw materials it is at the top," he concluded. Kirby Adams, who is also CEO and managing director of Tata Steel Europe admitted however that the Tata Steel's Indian operations are currently performing better than the European operations. "When you have a conversation about the Indian operations of Tata Steel and the European operations of Tata Steel, you cannot have a more different conversation," he said. Apart from the obviously stronger growth in India while European steel demand remains weak, raw materials play a large part here as the Indian operations of the group virtually all have an integrated production chain, while the European operations have to rely on purchasing raw materials, without the advantage of proximity. On the sidelines of the conference, Adams told Metal-Pages that the company is currently exploring for metallurgical coal in Wales, near its Port Talbot plant. "When metallurgial coal was at $10/tonne this was not so important, now at is at $200/tonne it is worth it." If its plans to start up the mine materialise, this would give the company a supply of some six million tonnes per year of high quality coal at the site near Port Talbot, making the plant one of the world's lowest cost steel producers. The company has been involved in iron ore exploration at several locations, including Guinea, but this is in early stages yet. At the moment, the European operations are benefitting from the weak euro, which make exports competitive as well as from effective use of raw materials that contribute a high proportion of costs. However European demand for steel remains weak. "It will be at least three or four years before we revert to levels we have had in 2007," Adams told delegates. "We expect 2010 to be a lower year for construction activity in Europe than 2009," he commented. "Most of the construction activity we have seen in Europe has been a result of government stimulus, and with reduced availability lately of finance we we expect this to be reduced." His forecast for the mature automotive industry is that it would remain flat between 2010 and 2015, and is not expected to return to 2003-2007 levels until past 2015. In the developed nations outside of China, including the US and Japan production saw a huge fall in 2008-2009 and is never forecast to come back to 2003-2007 levels, Adams said. As a result all the growth in production volume will come from developing actions such as China and Brazil, while Europe and Japan are set to remain leaders in technology, in terms of research and development especially for high speed steels. Manganese Matters n° 10 (Issued June 22, 2010) 38 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. China, whose production of steel is set to reach 1 billion tpy in the next decade is likely to remain a net exporter of steel, while Europe which was a net importer in 2006-2009 became a net exporter in 2010, helped by the weaker local currency. Exports have been primarily of high value added steel products and in the future Adams said the region will remain an exporter of high grade steel. Consumption in China, which is the largest user of silico-manganese units in construction steel is meanwhile set to grow as it moves towards more steel intensive construction. At the moment less than 15% of its high rise buildings of six storeys or more are of steel frame construction, Adams pointed out, as opposed to 70% in the UK. Its shift towards steel frame construction creates an opportunity for significant growth, especially given the large share occupied by construction steel in the Chinese market. Of the total Chinese market for steel, construction accounts for 61% compared with the automotive's sector 4% share, in contrast with the European market where construction steel accounts for 35% of steel consumption, automotive for 19% and the lion's share of the market is taken up by other mechanical and engineering steels. Per capita construction of steel in China and other developing countries is set to grow, while it would reach a plateau in developed nations. Currently at the high end of the consumption scale is South Korea, with 1,050 kg per capita annual consumption of steel, while at the lower end are countries like India and Indonesia where annual per capita consumption is around 50kg. In Europe, average per capita consumption in 280 kg per person per year, and in Japan it is 460 kg ppy. China, Adams suggested, could catch up with Japan and in the longer term potentially be placed in terms of per capita consumption between Japan and Korea. Global manganese alloy capacity utilisation to rise Steel Business Briefing, 14/06/10 The global capacity utilisation rate of manganese alloy producers is expected to gradually rise and recover in these two years, said Colin Ouwehand, manganese market analyst with Vale. Capacity utilisation was around 65% in 2009, and this is forecast to increase to about 75% in 2010 and then 85% in 2011, according to a presentation by Ouwehand at a recent ferro-alloy conference in Shanghai, attended by Steel Business Briefing. The increase is due to a supply reduction in 2009 – which has resulted in less overhang in the market – and ongoing de-stocking and re-stocking in the market, he said. Chinese smelters continue to operate at levels even lower than during the global economic crisis due to power supply constraints and reduced demand. Hence there is further upside for capacity usage growth in China, Ouwehand added. In 2009, global manganese alloy supply exceeded demand by 909,000 tonnes, resulting in high inventory levels in the market. But Ouwehand said this gap will narrow to 445,000 t in 2010 and to 167,000 t in 2011. Supply reduction is the key to achieving relative market balance after the crisis, he noted. The rising capacity utilisation will see demand for more seaborne ore rise globally, especially in Asia. But supplies of good quality ore – including that produced in Africa, Australia and Brazil – is expected to remain tight. In the short-term, demand for mid-grade ore like that from Southeast Asia will likely remain stable, while demand for low-grade ore – mainly from China – is expected to remain relatively high, he added. Vale has a capacity to produce 3.3m t/y of manganese ore in Brazil and 495,000 t of manganese alloys like ferro-manganese and silico-manganese in Brazil, Norway and France. MARKET ROUND UP: Outside forces may force up ferro-alloys prices Metal-Pages, 11/06/10 The week brought news that ferro-alloys prices could come under pressure with BHP Billiton and Rio Tinto poised to raise iron ore prices by up to 23% in the third quarter. Manganese Matters n° 10 (Issued June 22, 2010) 39 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 second consecutive quarterly hike would see iron ore priced at around $147 dollars a tonne between July and September. Since iron ore producers abandoned the traditional annual benchmark price in March, prices have risen by around 140%. The move by BHP Billiton and Rio Tinto is likely to be matched by Brazil‘s Vale, the world‘s leading producer. Iron ore may not be alone in facing higher prices. Adding to this, the Chinese government is reportedly mulling tighter restrictions on exports of energy sensitive products and strategic resources, including steel, ferro-alloys and minor metals, according to sources close to government officials. China has eased its control on exports of those products by lowering export duties or increasing tax rebates to stabilise export markets since 2008 when the world financial crisis broke out. However, with the economy is gradually recovering to the pre-crisis level, tighter control is said to be necessary again to save energy and reduce industrial emissions. China‘s extensive restrictions on its own exports, such as silicon, are doing more to distort world commerce than their supposed goals of protecting the environment and balancing the country‘s trade, according to the World Trade Organisation. The week also saw Grupo Mexico retake control of Cananea, the country‘s largest copper mine, after federal police removed protestors who have been on strike for nearly three years. The site could be operating again by the end of this year with the company saying it has 2,000 contracted workers ready to deploy at the site once it gets the go-ahead from safety officials. The prolonged long strike coupled with lower metals prices and demand combined put a halt to a planned molybdenum circuit at the Cananea copper mine in northern Mexico. The miners‘ leader has vowed to regain control of the site. SILICO-MANGANESE The European silico-manganese market has been steady in the past few weeks after gaining more than 5% around the start of last month. Tight availability and a weaker euro is set to persist in shoring up support for the alloy in the short term, dealers told Metal-Pages. Silico-manganese 65/17 grade spot prices are at €1,150-1,200/tonne basis delivered. Buying interest among consumers in the steel sector has been relatively busy, although at a low rate, and there are enough orders through this month for prices to see out the current quarter without any losses, dealers said. The spot silico-manganese market in the United States has fallen almost 10% in the past couple of weeks, dragged down on increased offers against weaker consumer buying interest as the seasonal slowdown approaches next month. US spot silico-manganese prices have moved to 62-65 cents a pound, from 69-71 cents/lb. Last October, the market hit an annual peak of 75 cents/lb. Steelmakers seem content to use their stocks in the run-up to seasonal shutdowns next month and it seems they will be little interested in buying from the spot market for most of July and possibly early August, dealers said. US Steel, the number one steel producer in the States, booked several hundred tonnes of silico- manganese at 70 cents/lb a few weeks ago, although consumer bids have been rare since. FERRO-MANGANESE The European ferro-manganese market has been steady in the past few weeks, consolidating gains made earlier in the current quarter, while prices look supported on low levels of stocks in the short term Manganese Matters n° 10 (Issued June 22, 2010) 40 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. despite muted demand. High carbon ferro-manganese 75% material is at €1,125-1,175/tonne basis delivered works. Medium carbon alloy is around €1,900/tonne and low carbon alloy is about €100 premium to that. Business has been low key, although steady in recent weeks and it‘s the type of demand the market is seeing in the next couple of weeks, dealers said. Availability is fairly tight and there are only low levels of stocks around, so support is firm and if demand picks up at all then the obvious move is for prices to get stronger. Dealers said there were no reported quarterly deals for the third quarter, although a few bids and offers have been pitched around current spot price levels. Further support has come from a weaker euro against a basket of currencies, although that impact has been limited given similar levels of import and export business. The European spot manganese flake market has eased again in price in the past week, amid weakening demand in already quiet business conditions, and after recent falls in the value of the euro against a basket of currencies. European spot prices are off $50 to $2,700-2,750 a tonne basis in-warehouse Rotterdam, depending on delivery terms, while manganese lumps in Europe are around a couple of hundred dollars more expensive. Consumer demand in Europe has been quiet and is set to be even quieter when seasonal shutdowns start next month, dealers said. Steelmakers have indicated they will be shutting production capacity for about three weeks, which will mean restarts in August, although consumers may have enough stocks to last until September. BHP Billiton appoints Schutte as head of manganese unit Mining Weekly, 08/06/10 Diversified mining giant BHP Billiton on Tuesday announced a number of appointments and restructuring of its management team. The company said in a statement that Tom Schutte had been appointed as president of its manganese business, replacing Peter Beaven, who had been appointed president of base metals. "Beaven's wide experiences across a range of regions and businesses will be of great value to the leadership of base metals," said BHP Billiton's nonferrous president Andrew Mackenzie. Schutte is currently marketing president at the company and had been responsible for driving the development of the BHP Billiton marketing model for the past five years. BHP Billiton CE of ferrous and coal Marcus Randolph said that Schutte's history across marketing and other operational areas within the group would be invaluable in his new position leading the manganese business. Schutte would be replaced by Mike Henry who had been appointed marketing president, starting in July. Henry currently holds the position of petroleum and freight marketing director. Ryan’s Notes Weekly Ryan’s Notes, 07/06/10 Slowdown in US bulk ferroalloy market Most US bulk alloy sellers were sitting on their hands last week, with little business being conducted. Manganese alloy prices fell slightly, but less than some consumers expected. Chinese bulk ferroalloy Manganese Matters n° 10 (Issued June 22, 2010) 41 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. prices were basically unchanged though resellers said the smelters were getting increasingly aggressive. ―Domestic demand is definitely off,‖ one merchant said, ―and sellers now see they will have to juice the export market.‖ Japan‘s Customs stopped accepting Indian silicomanganese imports under GSP from May 18, as the imports from India already exceeded 20% of the 50,543 mt set as the ceiling for the fiscal 2010 that began on Apr. 1, 2010. The suspension this year came four months earlier than it did last year. The GSP import duties are 2% for silicomanganese, instead of ordinary 2.5% duty. The ceiling is for Group 66 that includes not only silicomanganese but also other ferroalloys such as silicochrome, ferromoly, ferrotungsten, ferrovanadium and others for all GSP countries. However, silicomanganese was the only item so far imported from India under the category. While the government did not reveal the GSP tonnage from India, a total of 17,081 mt was imported under the whole category at the time of the suspension. In the last fiscal year, the GSP imports from India were stopped from Sept. 16, 2009. The GSP imports from China that were suspended on June 16 last year have not been stopped yet for this year. Including the imports under GSP, Japan‘s total Indian silicomanganese imports skyrocketed to 18,592 mt in April, up from 5,297 mt a month ago, and up from 2,408 mt in April 2009. Imports from China fell to 1,667 mt from 2,869 mt in March, and from 10,784 mt a year ago. Japan‘s silicomanganese imports for the first four months of 2010 reached 80,963 mt, up from 47,918 mt for the same 2009 period. Of the total, 40,859 mt came from India, up from 8,276 mt. The imports from China fell to 9,752 mt, from 31,122 mt. MARKET ROUNDUP --- Nerves of steel Metal-Pages, 04/06/10 Fears that the European debt crisis would spread to Hungary, sparked by a senior government official's warning, and concerns over heavy debt in southern eurozone nations, have dragged the euro below US$1.20 this week. The European currency has fallen more than 15% against the US dollar since the start of the year, and its current woeful state is reflected in the region's steel and metal markets. The meeting of the Bureau or International Recycling this week heard a forecast that the global stainless steel output would top 30 million tonnes this year, and generally recent forecasts coming from steel analysts have been between 28.5 million and 31.5 million tonnes, all of which would be a record level. London-based steel consultancy MEPS said this week that 209 crude stainless steel production came in just 5% below the 2008 level, and was better than its forecast. However the outlook for the third quarter is clouded, and in the meantime steel and steel raw materials markets are feeling the pressure. Demand from steelmakers steel seems to be there, ferro-alloy traders said, but given volatile currency and falling prices, and fear of building excess stocks, they are buying in small volumes, from hand to mouth. This week continued to see depressed demand and falling prices for most ferro-alloys, while nickel, one of the main stainless raw materials, fell below $19,000/tonne basis three months on the LME, closing at $18,350/18,400 on Friday. Europe's largest steelmaker ArcelorMittal confirmed today that it is considering shutting down as many as three blast furnaces in the third quarter due to expected slower demand. ―In Europe the third quarter is characterised by lower demand due to summer vacation shutdowns,‖ the company said in an emailed statement. China, on which the global steel industry is pinning its hopes for growth is feeling the impact of tightening credit, and falling demand for steel from the automotive and construction sectors. Smaller steel mills have been shutting furnaces, while the country's largest publicly-traded steelmaker Baoshan Iron & Steel Co today cut prices for cold-rolled and hot-rolled coil for the first time in eight months. Manganese Matters n° 10 (Issued June 22, 2010) 42 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. Stocks of iron and chrome ore have piled up at Chinese ports, and the country's steelmakers are showing little interest in either locally produced or imported ferro-alloys. In the US meanwhile the strengthening dollar is attracting imports, which has contributed to a downturn in domestic market prices. MANGANESE European spot manganese flake prices have dropped again in the past week on increased availability of relatively cheap imported material and slow market demand. European spot prices were at $2,750-2,800 a tonne basis in-warehouse Rotterdam, depending on delivery terms, while manganese lumps in Europe are at a widening premium of around $200/tonne. ―The European market has been quiet for several weeks now and there have been more, cheaper shipments from Asia that has been dragging on European prices more recently,‖ a dealer said. ―The trend suggests cheaper European prices in the short term, which might be weighed further as the market moves into the start of the seasonal slowdown period next month.‖ While China has a prohibitively high export duty of 20% of manganese, which has seen official export decline, traders say Chinese flake is being smuggled via Vietnam and then stored in warehouses, such as Rotterdam, after European Customs clearance. Shipments from Vietnam are being offered at $2,700/tonne delivered duty paid, and even cheaper, to European dealers, according to market sources. FERRO-MANGANESE Spot ferro-manganese prices in the United States have dropped again in the past week amid increased offers from dealers anxious to cash in ahead of expected further weakness in the seasonal slowdown next quarter. High carbon material has lost $50 to $1,400-1,450 a long ton basis delivered, while refined ferro- manganese grades, such as medium carbon material have moved to $1.35-1.40 a pound, from $1.40- 1.45/lb. Low carbon ferro-manganese has also eased 5 cents to $1.45-1.50/lb. A dealer said the market is expecting prices to drop another 5% if not more in the coming weeks as steel mills plan to shut for 2-3 weeks in July-August. ―Steel makers have been building stocks from the spot market where suppliers have been offering some of the 24,000 tons of manganese alloys sold by the government in April, and dealers want to get as much as that off their books as possible before prices drop again," the source added. Dealers said uncertainty about consumer demand after the seasonal slowdown in the States, which is going through a fragile economic recovery after a huge slump, has also prompted a rise in the volume of offers from suppliers. Domestic suppliers are also worried that the strong US dollar is attracting more imports, which will compete in the domestic market. BHP Billiton names new base metals president Metal Bulletin, 02/06/10 BHP Billiton has made Peter Beaven president of its base metals division, following the recent departure of former president Diego Hernández to Codelco. Beaven, currently president of BHP Billion‘s manganese business, will assume the new role on 1 November 2010. Until then, Ivan Arriagada will continue as a temporary president, BHP said in a statement sent to MB. Beaven has worked at BHP for over ten years, and has held the manganese role since October 2005. Before that he was vp of carbon steel materials, the company said. Manganese Matters n° 10 (Issued June 22, 2010) 43 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. Global manganese ore output in Q1 up by 29pct YoY Steel Guru, 02/06/10 TEX reported that the world output of crude steel in January to March quarter of 2010 increased by 29% to 342 million tonnes in comparison with that in the same quarter of 2009 and, accordingly, the global consumption of manganese ore in the first quarter of 2010 had recovered, which caused an increase in production of manganese ore. Among six major manganese mines, Assmang released their settlement of accounts for 6 months but did not mention the quantity of manganese produced by them in that period. Accordingly, it is unable to grasp a whole picture in the world production of manganese ore but the total quantity of manganese ore produced by 5 mines in the first quarter of 2010 is estimated to be 3,200,000 tonnes, having increased by 94.6% as compared to that of 1,640,000 tonnes in the same quarter of 2009. Reflecting the Lehman shock emerged in autumn of 2008, the world economy in January to March quarter of 2009 shrunk to a serious extent and, consequently, the price of medium grade manganese ore for China in that quarter had fallen to a level of USD 5.50 to USD 5.60 per Mn 1% CIF China, which was an edge line to be payable for production cost. In view of this aspect, major manganese mines decided to reduce their production (supply) of manganese ore and endeavored to take back a balance on supply and demand of manganese ore. Accordingly, an extent to reduce their production of manganese ore was considerable. The unit price of manganese ore for shipments in January to March quarter of 2010 had been on a basic tone to rise. China imported manganese ore on a scale of 2,831,000 tonnes in the first quarter of 2010, having doubled in comparison with that of 1,016,000 tonnes in the same quarter of 2009, and it is anticipated that China will import manganese ore on a scale of 10.00 million tonnes per annum in 2010, having exceeded largely that of 9.61 million tonnes imported by China in the preceding year of 2009. Reflecting this movement in the demand for manganese ore from China, major manganese mines had risen their price of manganese ore for China once in 1 to 2 months since January of 2010. As a matter of fact, the price of medium grade manganese ore for shipment to China in June has risen to USD 8.70 per Mn 1% CIF in comparison with that of USD 6.50 for January shipment. For a reference, the recent quantities of manganese ore stocked at main discharging ports of China were informed as at Lianyuan port: 100,000 tonnes, at Zhanjiang port: 130,000 tonnes, at Fangcheng port: 270,000 tonnes, at Qinzhou port: 680,000 tonnes, at Tianjin port: 720,000 tonnes, at Beihai port: 200,000 tonnes and Total: 2,100,000 tonnes, corresponding to the scale imported by China for 2 months. The scales of manganese ore produced by major mines in January to March quarter of 2010 were in the direction to recover. However, in comparison with the scales of manganese ore produced by major mines in 2008, BHP Billiton has recovered by 100% but Comilog (Eramet) has caught up on 93% and Vale on 67% respectively. (Sourced from TEX Report Limited) Ryan’s Notes Weekly Ryan’s Notes, 31/05/10 US bulk ferroalloy prices holding There were not any significant changes in US bulk ferroalloy prices, which sellers took as a good sign last week. Suppliers are worried that a flood of alloy imports could exert further downward pressure on prices and force some suppliers to sell quickly. European ferrosilicon prices continued to soften and were down to €1,330-1,345 per mt. Silicomanganese was also cheaper at €1,150. Sellers reported that major European mills started looking for their third-quarter requirements with better than expected tonnage. Manganese Matters n° 10 (Issued June 22, 2010) 44 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. DLA‘s next sale of high-carbon ferromanganese will be June 8. Instead of monthly, all future DLA ferromanganese sales will be six times per year on the second Tuesday of every other calendar month. Chinese bulk ferroalloy prices were slightly weaker on falling demand, though supplies were limited as some smelters chose not to sell in anticipation of higher power prices. Smelters are refusing to pay higher manganese ore prices, and some ore suppliers are even finding it difficult to roll over May quotes. ―A few small smelters bought high-grade ore but most refused after seeing the price,‖ one producer explained. And, there is no shortage of manganese ore in China. For the first four months of 2010, imports were 3,957,954.8 mt vs. 1,729,182.8 mt in the same 2009 period. Major suppliers in the first four months of 2010 (2009 in parentheses): Australia, 1,139,123.5 mt (592,309.2 mt); South Africa, 959,438.7 mt (274,785.7 mt); Gabon, 476,796.1 mt (111,142.2 mt); Brazil, 407,784.7 mt (185,747.1 mt); Myanmar, 297,552.6 mt (144,426.5 mt); and Malaysia, 205,898 mt (116,290.3 mt). OM Holdings completed its deal by buy 26% of the Ntsimbintle Mining for A$64-million; Ntsimbintle holds a 50.1% interest in the Tshipi Kalahari manganese project. Ntsimbintle and Pallinghurst Co- Investors hope to start development of the project in late 2010, and plan to be producing up to 2-million mtpy of ore by the end of the third quarter of 2011. Ryan’s Notes Weekly Ryan’s Notes, 24/05/10 US FeSi and SiMn prices lower; US imports of bulk ferroalloys up sharply The positive economic signs in the US were quickly overwhelmed by the euro problems last week. And, those fears were immediately transferred to the bulk ferroalloy market. In the US, ferrosilicon was reportedly booked as low as 93¢, delivered, for Chinese material for significant quantities, with smaller quantities booked around 95¢. A large quantity of highpurity ferrosilicon was sold at slightly more than a $1, much lower than expected considering FerroVen‘s force majeure. Silicomanganese tags tumbled to below 64¢, while even small quantities of medium-carbon ferromanganese were sold at below $1.40 per lb. European silicomanganese was sold at €1,170 per mt. ―Europe is no longer an attraction for manganese alloys and all the excess material is now headed to the US,‖ a seller explained. Chinese bulk ferroalloy prices were basically unchanged last week. While ferrosilicon tags were softer at the beginning of the week, the slide might stop in the near future. China‘s central government is expected to announce that it will strictly enforce the differential electricity rates on the ferroalloy industry. According to sources, the summer favorable rates set by local governments will be abolished on June 1 and the punitive charges that are especially designed for the ferroalloy industry will be doubled. These actions could lead to an increase of $60-70 per mt in the production costs for ferrosilicon. As a result, some smelters are already holding back their offers for shipments in June due to the uncertainty. China exported 154,173 mt of ferrosilicon in the first three months of 2010 vs. 96,249 mt in the same 2009. In the first quarter of 2010, Japan received 67,227 mt (2009: 22,155 mt); South Korea, 43,100 mt (30,985 mt); Taiwan, 10,445 mt (11,964 mt); Iran, 5,185 mt (1,550 mt); Thailand, 4,477 mt (2,222 mt); Turkey, 4,035 mt (188 mt); and India, 3,670 mt (2,340 mt). Exports were 66,926 mt in March alone vs. 31,817 mt in March 2009. Eramet Marietta has no immediate plans to lift its partial force majeure on refined manganese shipments in the foreseeable future despite earlier statements that it would be gone by the end of May. The company, however, may further reduce the restrictions. Eramet Marietta doesn‘t want to lift the force majeure until it is confident that the rebuilt high-carbon ferromanganese furnace can operate without any problems. A second furnace that is being converted to silicomanganese will not be Manganese Matters n° 10 (Issued June 22, 2010) 45 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. operational until the end of the month and the company has not done any work on the furnace that ―blew up‖. The US imported 70,980.3 mt of silicomanganese in the first quarter of 2010 and 28,059 mt in March vs. 38,433.1 mt and 3,166.2 mt, respectively, in the same 2009 period. The major suppliers in the first quarter of 2010 (same 2009 period in parentheses) were: South Africa, 38,674 mt (18,412.7 mt); Norway, 10,807.6 mt; Australia, 8,652.6 mt (5,064.9 mt); Georgia, 4,552.5 mt (3,999 mt); Mexico, 3,000 mt; (1,588 mt); Saudi Arabia, 2,054.2 mt (4,190.6 mt); and Spain, 1,588.3 mt. US imports of 55-80% ferrosilicon were 37,796.6 mt in the first quarter of 2010 and 15,087.2 mt in March vs. 17,053.1 mt and 1,119.6 mt, respectively, in the same 2009 period. Major suppliers in the first quarter of 2010 (same 2009 period in parentheses) were: Russia, 25,510.4 mt (6,519 mt); Venezuela, 4,500 mt (4,100 mt); China, 4,384.6 mt (3,603.9 mt); and Canada, 2,752.7 mt. The US imported 38,948.3 mt of high-carbon ferromanganese in the first quarter of 2010 and 12,829.7 mt in March vs. 27,626.9 mt and 5,681.3 mt, respectively, in the same 2009 periods. The major suppliers in the first quarter of 2010 (same 2009 period in parentheses) were: South Africa, 24,068.9 mt (26,090.5 mt); Ukraine, 8,196.8 mt; France, 4,726.6 mt; and Zambia, 494.7 mt. US imports of medium-carbon ferromanganese were 22,152.1 mt in the first quarter of 2010 and 7,294.8 mt in March vs. 7,836.4 mt and 723.1 mt, respectively, in the same 2009 periods. The major suppliers in the first quarter of 2010 (same 2009 period in parentheses) were: Norway, 9,600 mt; South Africa, 5,819.5 mt (7,382.5 mt); Korea, 3,700 mt; and Mexico, 2,594.5 mt. The US imported 13,949.8 mt of low-carbon ferromanganese in the first quarter of 2010 and 5,543.3 mt in March vs. 3,321.7 mt and 278.5 mt, respectively, in the same 2009 periods. The major suppliers in the first quarter of 2010 (same 2009 period in parentheses) were: China, 6,186.2 mt (616.6 mt); Mexico, 3,750 mt; Norway, 2,090.9 mt and Korea, 1,700 mt (1,700 mt). Manganese ore prices moved up in China as other large, high-grade ore importers raised their tags. However, other sellers kept their prices slightly lower than the market leader in an attempt to gain market share. ―It‘s the nature of today‘s business,‖ one importer said. ―The highest price seller is a target for the rest of us.‖ STEEL NEWS back to index CISA predicts rebound in Chinese domestic steel prices Steel Guru, 22/06/10 Chinese steel price which has been declining for almost two months is expected to rise. But it is seen that spot steel price in last week maintained stable on the basis of the steel price before the Dragon Boat Festival, although the wait and watch attitude of the market is still strong. Chinese Iron & Steel Association is also opportunistic about the future of steel market as it is believed that there is no more space for Chinese steel price to fall. In their opinion rebound and fluctuation stage of steel price is coming. Since June, Chinese steel price is still falling, but much more slowly. On one hand, China will continue to enjoy the steady and rapid economic development, and the demand of steel will also keep growing; on the other hand, material price such as iron ore price is still high, so steel market fluctuation will be unavoidable. According to the analysis of CISA, first, steel export is gradually going up, which will alleviate the domestic supply and demand contradiction; second, international steel price is still at the highest level, although Chinese domestic steel price is declining; third, the high price of materials like iron ore will help steel price to rebound too. All these advantages will accelerate the rebound process. Manganese Matters n° 10 (Issued June 22, 2010) 46 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. Ever since the mid April, Chinese steel price has been declining and fallen into the adjusting stage. Mr Luo Bingsheng, the deputy director of Chinese Iron & Steel Association once said that some steel mills might be pushed to loss money and cut production due to the rising production cost in the future. Now it seems that he could be wrong in the former prediction. Global steel output 1.6% higher in May Metal-Pages, 21/06/10 World crude steel production totalled 124 million tonnes in May - a 1.6% increase on the previous month and 29.1% higher than May 2009 in the 66 countries reporting to world steel association (worldsteel). China‘s crude steel production came in at 56.1 million tonnes - an increase of 20.7% compared with May last year. Elsewhere in Asia, Japan produced 9.7 million tonnes - up 50.2% on the same month in 2009, while South Korea‘s output increased 28% to 5.2 million tonnes. In the European Union, Germany produced 4.1 million tonnes an increase of 87.7%, Italy‘s output ran to 2.5 million tonnes - 42% higher and Spanish production ran to 1.6 million tonnes - 24.9% more than in May 2009. Turkey produced 2.5 million tonnes of crude steel last month - an 18.8% increase over May last year. Across the Atlantic Ocean, United States producers churned out 7.2 million tonnes - a 73.8% increase, while Brazilian production was 50.8% up at 2.9 million tonnes. World crude steel production in May was 2.6% higher than May 2008 before the global economic downturn intervened in the closing months of that year. While China, South Korea and Turkey showed increased crude steel production in May 2010 compared with the same month in 2008, the US, Italy, Spain and Japan are not yet back to pre-crisis production levels. The world crude steel capacity utilisation ratio of the 66 countries in May 2010 slipped to 82% from 83.4% in April 2010 but rose 15% from May last year. Global steel output in the first five months of the year is 29.8% up on the same period last year at 586 million tonnes. Steel consumption across the world will increase 10.7% to 1.24 billion tonnes this year and by 5.3% to a historic high of 1.31 billion tonnes in 2011, worldsteel forecast in April. Japan May liquid steel production hits 19-month peak Metal-Pages, 18/06/10 Japan's liquid steel production surged more than 50% in May, year-on-year, to 9.73 million tonnes, the highest level since October 2008, on strong exports to other Asian countries. The Japan Iron and Steel Federation said production climbed more than 8% from April this year. The news belied worries that falling prices and big destocking of steel products in Asia, particularly in China, may hit Japanese steel makers' exports and production. Asia's steel prices have been weakening since April amid economic tightening moves in China, uncertainty about the European market and worries about a double dip in the world economy, with OECD indicators pointing to a slowdown in economic growth. Manganese Matters n° 10 (Issued June 22, 2010) 47 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. Japanese steel makers such as Nippon Steel, the world's second-biggest producer, and No.6 JFE Holdings now derive almost half of their steel revenue from exports as domestic demand has slumped. Does China really mean business this time? Metal Bulletin, 18/06/10 The Chinese steel sector is braced for Beijing's wrath after the State Council unveiled unusually specific punitive measures for steelmakers and provincial governments that fail to toe the party line. China has been trying for years to rein in steel overcapacity and push for consolidation but the June 17 statement by the State Council — which rather wonderfully refers to the policy directions as its "opinions" — shows that the government finally means business, Chinese market participants told MB. "We have found more specific measures and targets and also related punishments on those who fail to realise [the targets] in the stipulated period," said a major steel trader in Shanghai. Among other punitive action promised, steel mills that fail to dismantle obsolete capacity by given deadlines will bring down a regulatory freeze on the entire district: No other project will be able to move forward with government approvals nor secure release of state land. Local authorities that "take the initiative" to grant preferential tax regimes to steelmakers will also be taken to task, said the State Council, signalling that Beijing is keen to break the complicity between steelmakers looking to expand and local authorities seeking higher economic growth: a partnership that has proven a stumbling block to previous attempts at eradicating outdated steel capacity. In another nod to other condoned industry practices, Beijing promises to root out any steel projects that start construction while waiting for approval or before all approvals have been received, as well as the tendency of local authorities to give approvals for areas outside of their remit. This will go hand-in-hand with its decision not to approve any new steel expansion project until end- 2011. In the hail of stern warnings and promised punishment however, is the usual ambitious-sounding regime of inspections to conduct, and this is where Beijing may run out of steam. It wants to inspect all steel capacity added since 2005 for any irregularities, environmental code violations and land misuse — a daunting task in a sector that has grown several times over in the last six years. Tellingly, it has indicated no timetable for the endeavour. Put next to this, its 2015 target is almost modest: To have China's 10 largest steelmakers own 60% of the country's capacity, up from 44% in 2009. Meanwhile, those watching closely for signs of an export tax rebate reduction would have found it in the State Council's statement, although it did not reveal any details, exporters in China told MB. For many in the market, the confirmation of intent had been expected as at least one major steelmaker has received a government notice to say that export tax rebate adjustments will be revealed soon and will take effect from July 15. There were no rebate change details in the notice, however. "Western countries are trying to save more and consume less after the financial crisis, so exports would be not be a good way to support the Chinese economy in the long term. The export rebate reduction is in line with the strategy of economic structural fine-tune," said a market participant. Along with the sense that Beijing means business this time around is the feeling that it's about time. Manganese Matters n° 10 (Issued June 22, 2010) 48 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 wish Beijing would really take effective measures this time," said a steel mill official. ArcelorMittal will increase output in '10 Metal Bulletin, 16/06/10 ArcelorMittal plans to increase production in 2010 in the face of poor demand and volatile prices in Europe and North America, the company told journalists at a press briefing in Luxembourg on 2010. The company produced 73.2 million tonnes in 2009, down significantly from the 103.3 million tonnes it produced the year before. Once again, it was the world‘s largest steelmaker. ―2009 was the worst year in the history of the organisation,‖ said executive vp of ArcelorMittal‘s long carbon Europe division Gerhard Renz. ―We hope it will stay that way.‖ ―It is possible we will reach 90-100 million tonnes in 2010,‖ he predicted. While demand in Europe remains poor, demand in the rest of the world, particularly China, is rising, the world‘s largest steelmaker said. ―We need to be cautious in Europe and in the US markets,‖ a company spokesman said. ―[But] in general there is a recovery.‖ ―The macro trend is still positive, and innovation keeps on going,‖ she continued, saying that stocks have now worked their way through the supply chain, although many buyers are still extremely cautious. ―Volatility is now higher so we have to be very flexible,‖ she said. ―Volatility is something we have to handle.‖ ThyssenKrupp, Vale to Open World's Most Expensive Steel Mill Dow Jones, 16/06/10 Germany's ThyssenKrupp Steel (TKA.XE) and Brazilian miner Vale (VALE, VALE5.BR) on Friday will open Brazil's first new blast-furnace steelworks in 25 years, said to be the world's most expensive after delays and cost overruns inflated the original budget by 75%. The 5.2 billion-euro ThyssenKrupp CSA Siderurgica do Atlantico on Sepetiba Bay in Rio de Janeiro state is Brazil's biggest private-sector investment in 15 years, promising to bring competitive returns for both partners but only after initial start-up expense is recovered. CSA, 73.13% owned by Germany's biggest steelmaker, will produce 5 million metric tons a year of steel slabs for rolling into finished products at ThyssenKrupp works in the U.S. and Germany, allowing the steelmaker to further integrate its production chain and alleviate rising costs. Vale, the world's biggest iron ore producer, will gain a captive market for its ore, free from maritime freights. The project also appeases Brazilian President Luiz Inacio Lula da Silva's desire for Vale to invest more in steelmaking in Brazil, creating new jobs and speeding the country's industrial development. CSA's birth was not an easy delivery. "The project was part of a movement several years ago to shift the hot end of steelmaking from developed to emerging nations including Brazil, India and Russia," said Marco Polo de Mello Lopes, President of the Brazilian Steel Institute, or IABr. Global steelmakers including ThyssenKrupp decided to shift new crude steelmaking projects to nations abundant in iron ore, and with more room for building and logistics than in their countries of origin, Mello Lopes said. Delays to CSA arose on soaring equipment and construction costs and a trained labor shortage as commodities boomed before the global economic crisis in 2008, according to Nomura Securities' Manganese Matters n° 10 (Issued June 22, 2010) 49 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. London-based analyst Gavin Wood. That was the year CSA was originally expected to start production on a 3 billion-euro budget. Political hurdles also hurt when CSA "imported" droves of Chinese workers to assemble a turnkey coke plant supplied by a Chinese firm. Violent clashes with local fishermen in Sepetiba Bay, who claimed fish had been driven away, complicated an already tricky environmental licensing problem. "CSA is the world's most expensive steelworks, with an investment per ton of slab capacity of more than $1,000," said a source close to the project who preferred not to be named. Costs were revised upward several times. Vale, which originally held 10% of CSA, upped its stake to 26.87% in mid-2009 in a move to "speed up the project and get it finished," Vale President Roger Agnelli told reporters at the time. "ThyssenKrupp was suffering cost overruns on CSA, which the market looked upon as a cash drain on the company," Wood said. "Vale upping its stake gave the market confidence on the project." CSA also allowed Vale to meet Lula's demands "at a lower risk investment than in a greenfield project," the analyst said. Including CSA, Vale is involved in new projects designed to produce 18.5 million tons a year of steel in Brazil, equivalent to about 43% of the country's total crude steel production as of 2009. In the longer term, Brazil is still one of the world's cheapest steel slab producers despite a relatively strong local currency and heavy tax burden, said SLW Corretora analyst Pedro Galdi. "It also helps reduce Vale's dependence on sales to China, which accounted for a massive 30% of its total revenues in first-quarter 2010," Galdi added. In Asian markets, Vale is at a permanent disadvantage to its Australian competitors due to higher freight costs. "CSA is expensive as it's such a comprehensive project, together with port, rail facilities and power generation, but this gives scope for potential expansion," Wood said. "Once the capex cost is offset, it should make ThyssenKrupp more competitive, allowing them to become a lower-cost producer over the next two years. This could give a substantial boost to their profit," Wood concluded. Mittal close to securing land for 12 mln tpy steel plant Metal-Pages, 15/06/10 Ormo village, some 8 km from Petarwar in Bokaro district, in the eastern Indian state of Jharkhand, has agreed to sell its land to ArcelorMittal for a new steel complex. ArcelorMittal has been nursing a plan for years to set up a new 12-million tpy plant in the state and has been prepared to spend INR 500 billion ($10.74 billion) on the project, but it had not been able to get any land on which to build the plant. The ice has finally been broken and ArcelorMittal is looking for some 1,000-1,200 acres to set up the first 3 million tpy phase of the plant. The company has been holding a series of meetings with villagers for the past four months, trying to get them to agree to sell their land. At one of the meetings, the company offered a rate of INR 500,000 ($10,746) per acre and employment to one eligible person per nuclear family, in line with the rehabilitation and resettlement (R&R) policy provisions of the Jharkhand government. "The employment will be given within three years of commercial production. Immediately after the land is registered, the family will be paid INR5,000 per month as annuity, till the time the eligible person gets Manganese Matters n° 10 (Issued June 22, 2010) 50 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 job. Anyone not willing to take up the job will continue to get a payment of INR5,000 per month, for 30 years, as per the R&R policy," an official said. The company, which had earlier selected Khunti-Gumla as the project site, decided to shift to Bokaro following opposition from the villagers - and has found Bokaro villagers apparently more willing to part with their land for the project. Chinese steel output hits record high of 56m tonnes Metal Bulletin, 11/06/10 China's crude steel output has risen again in May to set a record high for the third month running, in response to demand booked in the peak of the market rally in April. Output rose 1.3% from April to 56.14 million tonnes in May, up 21% year-on-year, according to the national statistics bureau. However, May daily crude steel output slipped to 1.81 million tonnes, from 1.85 million tonnes in April. Steel production has peaked and is expected to start falling in June, said market participants. Chinese domestic steel prices started to weaken in May ahead of the summer lull, when demand traditionally slides and many mills choose to schedule maintenance exercises. Beijing's moves to tighten credit and rein in the property sector has also dampened general demand for steel. "Traders dare not book a lot of steel given Beijing's measures to regulate the housing market and falling demand from the cars and home appliances sectors. Steel mills are not expected to produce so much under such circumstances," said a trader in Zhejiang. Smaller mills are already cutting output while major steelmakers including Baosteel, Anshan Steel and Wuhan Steel have cut their list prices in response to falling demand. "Though steelmakers have cut ex works prices, we would not take as much cargo as before since their prices remain higher than spot sales prices. It is easy to make a loss if market prices continue to drop in June," said a trader in Shanghai. China's crude steel output has achieved record highs for four out of five months so far this year, taking total output to nearly 269 million tonnes, up 24% year-on-year, according to the bureau. ArcelorMittal pressured to build Egypt steel plant Metal-Pages, 11/06/10 Egypt's Industrial Development Authority has given ArcelorMittal, the world's largest steelmaker an August deadline to begin building work on a steel plant near the Red Sea or lose its licence, The Economic Times reported, citing an official of the organisation. ArcelorMittal was granted a licence in 2008 to build a $340 million plant to produce 1.6 million tonne of steel using DRI technology and another 1.6 million tonnes of billets, but the producer held the project back because of the of the global economic downturn. While ArcelorMittal says Egypt remains an important market for future investment, the company will have to show its commitment by starting construction work to retain the licence, the official reportedly said. "The consumption of steel in Egypt has been impacted by the recent financial crisis. Demand is now recovering and we plan to start discussions with the Egyptian government about the project imminently," ArcelorMittal said in an emailed statement. Manganese Matters n° 10 (Issued June 22, 2010) 51 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. Steel rebar demand has remained relatively resilient in Egypt because of the need for housing and government infrastructure spending, analysts say. Chinese steel majors under pressure to cut output Metal Bulletin, 09/06/10 Yesterday's comments from Baosteel chairman Xu Lejiang on the prospect of Chinese production cuts in the third quarter were not a revelation. Many marginal steelmakers were already under pressure after sharp price declines in the last month. Production cuts or the hastening of maintenance at smaller swing producers were already well-known. But Xu Lejiang's remarks about weak demand and rising costs underline the difficulties in the months ahead for the Chinese steel industry. "It's very likely that China's steel giants will also start maintenance from mid-July. They can't afford to bear high costs during the period when real steel demand normally slows down," said a trader in Zhejiang province. Most of the producers that are already implementing production cuts are smaller steelmakers, often making long products. The spot price for rebar in eastern China has fallen around 16% from its 2010 peak, more sharply than other products, according to Metal Bulletin's archive. On May 24, 19 steelmakers in Hebei province brought forward maintenance work. These included Liuzhou Steel, Shaoguan Steel, Maanshan Steel, Jigang Minyuan Steel, Feida Steel, Tonggang, Shougang and Baotou Steel, according to trading sources. Beijing's efforts to rein in the property market have succeeded in cooling real-estate sentiment, but this has shaken commodities markets and sowed worries about steel demand in the second half of the year. China's bigger steel mills are likely to feel a greater impact if, as Baosteel's Xu mentioned yesterday, the downturn hits key flat product markets like cars and home appliances. "The reason why the bigger steel producers have not started to cut output is that traders and stockists are now shouldering the losses," said a trader in Shanghai. "If spot market prices continue to fall, steelmakers will have to refund traders in the end. In this case, producers would end up taking a loss and will have no choice but to cut production," he added. The bigger state-owned producers are also reluctant to reduce output because they operate according to production plans approved by local governments. But as demand weakens and profits thin, their problems are compounded by rising raw materials costs. One of the challenges posed by the emerging price system is that iron ore prices are set retrospectively against average spot market rates from the previous period, when steel demand may have been much better. So steel producers are likely to be hit with higher prices for the third quarter, just as they struggle to maintain existing margins. Baosteel last week cut list prices by 500-1,300 yuan ($73-190) per tonne for most of its steel products, the first reduction this year. Larger mills may be able to rely on existing stockpiles of ore to mitigate miners' efforts to win higher prices — but not for long. Manganese Matters n° 10 (Issued June 22, 2010) 52 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. "When the low-priced iron ore is used up, their production costs are going to be much higher," said a third market participant in Hebei province. Xu said that some smaller steelmakers are likely to default on iron ore contracts in the third quarter if the contract price ends up being higher than the spot market. Domestic steel prices are lower again this week in China, with rebar trading at 3,810-4,070 yuan per tonne in Shanghai, down around 30 yuan from last Friday, and hot rolled coil at 4,160-4,170 yuan, down around 10-20 yuan. "Commercial 5-12mm hot rolled coil prices are under great pressure to drop below 4,100 yuan and are going to slip to 3,900-3,800 yuan on weak demand," said a major trader in Shanghai. ArcelorMittal mulls Q3 furnaces shutdown Metal-Pages, 04/06/10 ArcelorMittal, the world‘s leading steelmaker has confirmed reports that it is considering shutting down as many as three blast furnaces in the third quarter due to expected slower demand. ―In Europe the third quarter is characterised by lower demand due to summer vacation shutdowns,‖ the company said in an emailed statement. The steel producer made no mention of current money and share market volatility linked to euro-zone debt worries that has been attributed to a fall off in buying of ferro-alloys and other metals. "In order to be prepared ArcelorMittal is technically in a position to reduce its production by stopping up to three blast furnaces in Q3. No decision if and where and when has been taken.‖ Metals traders and analysts continue to underline that while steel production remains well above where it was a year ago, buying has switched to hand to mouth patterns as steel producers eye the markets and other global events such as tensions between North and South Korea. World steel output increases 35,7% y-on-y in April Engineering News, 21/05/10 Global steel production in April was 35,7% higher than a year ago, but 0,4% lower than March, at 121,6- million tons, the Worldsteel Association reported this week. It said in a statement on Thursday that despite the month-on-month decline in output, April's global crude steel capacity use ratio rose for the fourth month in a row. Steel production in South Africa, Africa's biggest steel producer, showed an increase of 15,3% for April 2010, to 6,9-million tons compared with April 2009's 5,98-million tons, while the African steel market also showed a slight increase of 8,9% in production from 13,75-million tons in the comparative period. Meanwhile, the world's biggest steel producer, China, showed a 27% increase in its April 2010 steel production from to 55,4-million tons, the highest monthly amount of steel that the country has ever produced. Among other Asian steelmakers, Japan produced nine-million tons of crude steel in April, 3,8% less than the previous month, but 57% higher than the same month last year. Meanwhile, output from South Korea was up by 0,7% from March to 4,8-million, which was also 23% higher than the production for April last year. The US produced 6,8-million tons of crude steel in April, 4,2% lower than last month, but 79% higher than in April 2009. Manganese Matters n° 10 (Issued June 22, 2010) 53 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. Further, Brazilian crude steel production fell 4,3% month-on-month to 2,7-million tons for April 2010, however, production was still 57% higher than the comparable period last year. In Europe, Germany's crude steel production was 3,9-million tons, which was 3,4% less than in March, but more than double the level produced a year earlier. Italy also showed a spike in production up 58% to 2,4-million tons and Spain was up 36% from the previous year to 1,6-million tons. Crude steel production in all European countries totalled 15,4-million tons, 64% up year-on-year, but 0,8% lower than March. OHES & SCIENCE back to index EMM back to index Chinese manganese market firm despite slow demand Metal-Pages, 21/06/10 The Chinese electrolytic manganese market has stabilised since last week's Dragon Boat Festival, with prices supported by relatively high production costs despite soft consumer demand and thin business. Current mainstream prices for 99.7% min manganese flakes are at RMB14,600-14,800/tonne basis ex works, unchanged as compared to one week ago. ―Downstream demand is far from satisfactory, however, we are sticking to offers of RMB14,700/tonne due to firm production costs, and transaction prices are generally around RMB14,600/tonne. Many plants have stopped production, so we are unwilling to offload material below the current price level,‖ said a Hunan based producer. However, another market participant doesn‘t rule out the possibility that prices would go down slightly, in view of sluggish demand from both domestic and overseas consumers. ―Foreign buyers claimed that some deals have been concluded below $2,700/tonne basis DDU in warehouse Rotterdam for flake, and higher prices can find little acceptance,‖ he commented. Manganese prices are expected to hold stable if demand sticks to the status quo, and no big price fluctuations are on the horizon in July and August, which is traditionally a slack season for manganese business, industry sources said. Mn flake rises $50 on shutdowns in China Metal Bulletin, 16/06/10 Manganese flake prices rose by $50 per tonne on Wednesday, their first upward move since April 14, after seven consecutive drops prompted Chinese factories to shut down, traders told MB. Material traded at $2,680-2,750 per tonne compared with $2,630-2,750 per tonne, where prices had held since June 4, when they fell by $25 at the high end of the range and $20 at the low end. "Apparently, 50-70% of production has been shut down, so there's obviously been a reaction in China [to the falling prices]," a trader told MB. Chinese producers have been claiming since May that they would cut output if prices fell too close to the cost of production, Traders had been concerned about a possible stock build over the European summer, but stocks are now understood to be quite low, they told MB. Manganese Matters n° 10 (Issued June 22, 2010) 54 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 price seems to be settling; I think it's going up a little in China, despite the depressed market in Europe. There's not much stock at the plants," a second trader told MB. Most concluded business was reported at around $2,720-2,750 per tonne, but prices were also being discussed at around $2,630 and above $2,750, according to traders. "Perhaps there isn't as much material as people first thought," the first trader added. Manganese flake started to fall on May 7, when material fell to $2,870-2,950 per tonne from $2,875- 2,975, where prices had stayed since April 16. European manganese flake stable despite smugglers Metal-Pages, 15/06/10 The European spot manganese flake market has stabilised in the past week after slipping earlier this month, as production cuts in China, the key world supplier, have offset cheaper offers for Chinese manganese smuggled out of the country to avoid an expensive export tax, dealers told Metal-Pages on Tuesday. European spot prices are at $2,700-2,750 a tonne basis in-warehouse Rotterdam, depending on delivery terms, with most offers at the upper end of that range. ―Cheaper, smuggled manganese flake from China is having a big impact on the market, although any short term weakness seen through the seasonal slowdown should be balanced on production cuts in China,‖ a dealer said. Dealers said Chinese producers had been much more disciplined in their furnace melt rates in the past couple of years amid the world economic recession, and with any recovery fragile against austerity cuts, particularly in countries in the West, such production discipline will be needed in the coming months. Some Chinese exporters have been exporting manganese flake via Vietnam and Hong Kong to avoid paying a recently-imposed 20% export tax on strategic materials, and that material is being offered at some $2,600 a tonne in Rotterdam. However, producers in China, which makes about 95% of total annual world supply of manganese flake, have cut their production to only a third of their capacities due to a recent increase in domestic electricity costs, as well as environmental inspections. ―European manganese prices have been getting a bit firmer this week and while the third quarter is traditionally slower in terms of business activity, tighter production levels should support the market through that,‖ another dealer said. The bulk of total world manganese production is used in alloy form in steel for use mostly in construction. American Manganese Inc. to Receive Contribution Through NRC-IRAP Marketwire, 15/06/10 Larry W. Reaugh, President and Chief Executive Officer of Canadian mining developer, American Manganese Inc. (CA:AMY 0.20, 0.00, 0.00%) (PINK SHEETS: AMYZF) ("American Manganese" or the "Company"), is pleased to announce it has signed a third Contribution Agreement with the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP) to continue the successful development of a hydrometallurgical process to extract and recover high purity manganese from lower grade domestic resources within North America. The success of that program has led to the development of a proprietary process that will be the subject of an application for patent protection. Extensive studies and tests were conducted by the U.S. Bureau of Mines (U.S.B.M.) over more than forty years. The recent developments have resulted in a treatment strategy that involves an innovative Manganese Matters n° 10 (Issued June 22, 2010) 55 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. application of modern commercial process equipment. The result will be a more robust, complete flow sheet with reduced operating costs to recover manganese from lower grade resources. Kemetco Research Inc's ("Kemetco") report for the work completed in the initial phase to May 15, 2010 is in progress. In addition to financial support, NRC-IRAP will provide a range of both technical and business oriented advisory services. The Company is working with Kemetco to continue the development of a novel hydrometallurgical process which will yield high purity manganese metal and/or manganese dioxide at low cost from North American known resources. Chinese manganese offers firm but demand is weak Metal-Pages, 14/06/10 Chinese electrolytic manganese prices have been firm at RMB14,400-14,500/tonne ex works during the past few days after a brief hike driven by higher electricity costs. However, physical demand is reported to remain sluggish. The increase in electricity tariffs and environmental inspections have resulted in higher production costs, causing many producers to close their smelters. It‘s reported that as much as 70% of capacity is idled now, except for production in Chongqing that is unaffected due to stable power rates in the region. ―Selling conditions are far from good in the domestic market, and some trading houses have been shipping material to Hong Kong and Vietnam to dodge the heavy export tax. Their offers are generally $200/tonne lower than the current regular export offers which are at $2,750/tonne FOB,‖ a producer told Metal-Pages. A trade source said: ―Foreign customers are inclined to buy hand-to-mouth material on spot basis due to the spread of the European debt crisis. Manganese flakes are fetching $2,700-2,750/tonne DDU in warehouse Rotterdam, while manganese briquettes are selling much better at $2,400/tonne DDU.‖ Most market players agree that the manganese market is not likely to firm up in the short term due to sluggish consumer demand. Mn flake suffers seventh fall in a month Metal Bulletin, 04/06/10 Manganese flake fell for the seventh time in a month on Friday, losing up to $25 per tonne amid weak demand and continued concerns about the impact of smuggling. Material traded at $2,630-2,750 per tonne, down from $2,650-2,775 per tonne, where prices fell on June 2. ―It‘s the stuff coming through Vietnam that‘s really bringing the price down; the smuggled material. It creates a two-tier market,‖ a trader told MB. ―Demand is weak and if it stays weak, the price will continue to go down gradually,‖ he said. Higher electricity prices in China failed to support the minor metal, despite factories saying they will not produce when prices are so close to the cost of production, according to traders. ―The price is getting weaker in Europe, but in China there‘s an increase in electricity prices, despite the heavy rain in the south,‖ a second trader told MB. ―In the rainy season, the electricity prices should in theory go down, but on the contrary, the government has raised the electricity cost and factories are refusing to produce, saying they can‘t survive at this level,‖ he added. Manganese Matters n° 10 (Issued June 22, 2010) 56 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 market began to fall on May 7, when material fell to $2,870-2,950 per tonne from $2,875-2,975, where prices had stayed since April 16. But a third trader predicted prices will soon find their low point and bounce back, saying all the signs showed a recovery is likely. "Electricity‘s going up and I know a couple of producers who don‘t want to compete at this level. Manganese flake might go down $30-40 more, but in the long run I think it will flatten out and go up,‖ the trader told MB. Chinese manganese market lacklustre on dull demand amid stainless cutbacks Metal-Pages, 03/06/10 The Chinese electrolytic manganese market has been quiet this week with manganese flake prices unchanged at RMB14,200-14,400/tonne basis ex works amid weaker consumer demand. Demand from overseas markets is also weakening as the falling domestic prices have encouraged buyers to adopt a wait and see attitude. Domestic stainless mills, the main downstream users of manganese metal, have been cutting their output and have suspended purchasing of feedstocks. As much as 40% of manganese capacity is estimated by industry sources to have been shut due to poor market conditions and most producers are downbeat about the market prospect and expect prices to fall further. However, a Hunan based producer reported that the government will launch a new round of inspections on producers‘ environmental facilities and all unqualified players will face shutdown. Export prices are nominally at $2,700-2,800/tonne basis FOB and sources reported that virtually no material is being shipped from China as the 20% export duty is too expensive. ―European consumers will be absent for summer holidays in July and August so we hope that restocking will pick up in June but we doubt this will come true as buying enquiries from overseas customers are still sporadic at this moment,‖ said an export trader. China exported 12,631 tonnes of unwrought manganese metal, mostly flakes and lumps, in April, compared with 12,348 tonnes in March. Exports in the first four months totaled 40,011 tonnes versus 32,894 tonnes in the same months of 2009, according to latest Customs data, which do not include exports via Vietnam. The latter is significant because anecdotal evidence is that material smuggled across the Vietnamese border in avoidance of the 20% export duty has been making its way into overseas markets and in Europe undercutting prices of material legitimately cleared through Chinese customs. American Manganese moves step closer to public offering Metal-Pages, 01/06/10 Specialty metals producer American Manganese Inc. said it had received clearance to file its final short form prospectus ahead of a planned public offering. The Vancouver-based company said it aims to raise about C$882,522 (US$841,328) through the sale of 2,757,880 shares at a price of about $0.32 per share. The proceeds from the public offering will be used for advancing the pre-feasibility study of the company's Arizona Manganese project, including diamond drilling and metallurgical testing. American Manganese is aiming to become a low cost producer of electrolytic manganese from its Arizona Manganese project. Manganese Matters n° 10 (Issued June 22, 2010) 57 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. Last month, the company said that research and development firm Kemetco Research Inc. had completed the development of a conceptual process for extraction and recovery of high purity manganese metal from the Arizona deposit. The company said it had agreed to Kemetco‘s recommendation to seek patent protection for this proprietary technology. China currently controls electrolytic manganese production by supplying and producing about 97% of the world‘s needs, which is equivelent to about 2.6 billion pounds per year, according to American Manganese. Chinese manganese market in downturn on weak demand, cheaper material via Vietnam Metal-Pages, 26/05/10 The Chinese electrolytic manganese market has weakened further this week, with mainstream prices for manganese flakes slipping to RMB14,400-14,600/tonne ex works. Market participants say that there is still room for prices to edge lower and many producers have stopped making offers due to the chaotic market conditions. Some producers have opted to close out their inventories and then stop production due to their downbeat sentiments and there is already an increasing number of producer shutdowns in some regions. ―As prices have been falling for three weeks in a row, the transaction prices have dropped below the production costs for the majority of producers. There is limited room for prices to go down in terms of the current market prices,‘ said a market source. The export market remains nominal thanks to the availability of cheaper material shipped from Vietnam, traders said. ―Some European buyers have said that they cannot accept any offers higher than $2,700/tonne basis CIF Rotterdam and they would like to buy at even lower numbers,‘ said an export trader. Another trader reported that offers of $2,700/tonne basis DDU in warehouse Rotterdam are available due to cheaper material shipped via Vietnam. ―Legal exports including the 20% export duty are simply not workable now,‖ she said. Vietnam borders with China‘s Guangxi province, which is among the top three producing regions for the metal. EMD back to index Delta EMD finally finds buyer for its Australian residue site Business Day, 09/06/10 JSE-listed Delta EMD, a global supplier of electrolytic manganese dioxide with its manufacturing plant in Nelspruit, yesterday announced it had finally found a buyer for its Australian residue site. Delta, which had been battling to sell the struggling plant, said it would sell it to Port Waratah Coal Services for A12m. This comes after the company shut its manufacturing plant in Australia three years ago. Delta CEO Praveen Baijnath said the decision to sell the operation and dispose of the residue plant was an ―economic‖ one and would result in the tightening of supply in the market and raise prices. Manganese Matters n° 10 (Issued June 22, 2010) 58 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. ―Delta EMD‘s facilities in Nelspruit are the company‘s key strategic manufacturing operations,‖ Mr Baijnath said. Having one manufacturing plant was ―better in terms of cost and competitiveness‖. Overall, Delta EMD‘s net value of its Australian assets for last year was R34,7m. ―Delta EMD‘s underlying performance remains strong, notwithstanding the global economic crisis and reduced global demand for electrolytic manganese dioxide,‖ chairman Todd Atkinson said. ―The group‘s strengthened management team successfully managed the EMD business in more difficult market conditions, initiated significant operational improvements and charted a strategic course for further improvement and development of the business.‖ Mr Atkinson said Delta EMD expected the global EMD market to strengthen during the year as global economic conditions improve. ―Nonetheless, we do not expect to sell sufficient volumes during 2010 to fully use our plant, and consequently will continue to suffer from poor overhead recoveries. ―Pricing pressure is likely to continue while market demand is relatively soft, and our price competitiveness will be partly shaped by foreign exchange rates and the rand, which remains relatively strong,‖ he said. Delta EMD said it remained confident of its competitive advantages — favourable ore supply arrangements and a relatively low conversion cost — and expected improved market demand and participation in new market segments to provide attractive medium- term prospects. Meanwhile, the new owners of the Australian site, Port Waratah , would adhere to strict environmental licences and deeds. The environmental licence regulates the use of the site and requires rehabilitation of the site when it is no longer being used. The site‘s environmental assessment was concluded successfully and a site audit confirmed the site was suitable for commercial and industrial use without further remediation or rehabilitation. Carbon Nanotube Foams and Nanoscale Manganese Oxide Make Improved Supercapacitor Electrodes Say Navy Scientists Before it’s News, 25/05/10 The United States Navy (Washington, DC) garnered U.S. Patent 7,724,500 for a composite made of nanoscale manganese oxide (MnO2) on an ultraporous carbon nanoarchitecture which can be used to manufacture improved supercapacitor electrodes. Inventors Jeffrey W. Long, Anne E. Fischer and Debra R. Rolison say the composite is a porous carbon structure with a surface and pores and a coating of MnO2 on the carbon surface, in which the coating does not completely fill or obstruct a majority of the pores. The coating is formed by self-limiting electroless deposition. Electrochemical capacitors (also denoted as supercapacitors or ultracapacitors) are a class of energy- storage materials that offer significant promise in bridging the performance gap between the high energy density of batteries and the high power density derived from dielectric capacitors. Energy storage in an electrochemical capacitor is accomplished by two principal mechanisms: double-layer capacitance and pseudocapacitance. Nanostructured MnO2-carbon nanoarchitecture hybrids can be designed as electrode structures for high-energy-density electrochemical capacitors that retain high power density. Homogeneous, ultrathin coatings of nanoscale MnO2 can be incorporated within porous, high-surface-area carbon substrates Manganese Matters n° 10 (Issued June 22, 2010) 59 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. (such as carbon nanofoams) via electroless deposition from aqueous permanganate under controlled pH conditions. The resulting hybrid structures exhibit enhanced gravimetric, volumetric, and area-normalized capacitance when electrochemically cycled in aqueous electrolytes. This design can be extended to other mesoporous and macroporous carbon forms possessing a continuous pore network. The performance limitations of MnO2 for electrochemical capacitors can be addressed with a hybrid electrode design, by incorporating discrete nanoscale coatings or deposits of MnO2 onto porous, high- surface-area carbon structures. In such a configuration, long-range electronic conduction is facilitated through the carbon backbone and solid-state transport distances for ions through the MnO2 phase can be minimized by maintaining a nanoscopic carbon parallel.MnO2.parallel. electrolyte interface throughout the macroscopic porous electrode. Such a design can be realized using various types of porous carbon substrates including but not limited to aerogels/nanofoams, templated mesoporous carbon, and nanotube/nanofiber assemblies. The synthesis and electrochemical characterization of MnO2-carbon composites has been reported and primarily focused on incorporating nanoscale MnO2 deposits onto carbon nanotubes using a variety of approaches including simple physical mixing of the components, chemical deposition using such precursors as KMnO4, and electrochemical deposition. In these cases, the incorporation of MnO2 improves the capacitance of the electrode structures that contain the MnO2-modified carbon nanotubes; however, the overall specific capacitance for the composite structures is typically limited to <200 F g-1, even for electrodes with high weight loadings of MnO2. Contributed by Alton Parrish (Editor) Manganese Matters n° 10 (Issued June 22, 2010) 60 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.