Manganese Ore Production Leaves Problems To Next Year - 2008 = Output In Jan. - Sep. 2007 Remained On Same Level As That In 2006 When spotlight has been put on the production activities of manganese ore at major mines in January - September of 2007, it is known that the world production of manganese ore in this period had slowed down as a whole. Among six major manganese mines, CVRD ( Rio Doce ) of Brazil had a considerable decrease of their output, having influenced substantially on the world supply of manganese ore. The quantities ( on material base ) of manganese ore produced by six major mines in January - September of 2007 were as per the table shown below.
The total quantity of manganese ore produced by six major mines in January - September of 2007 is estimated at 11,001,000 tons, having had a slight increase of 0.7% compared with that ( 10,899,000 tons ) in the same period of 2006. As regards the output of manganese ore by each mining company in the first 9 months of 2007, BHP Billiton increased their production by 9.1% compared with that in the same period of 2006 and Eramet ( Comilog ) had a remarkable increase of 29.8% compared to that in the same period of 2006 but these increases of manganese ore production were offset by the decreased production at two mining companies of CVRD / Brazil and Ghana Manganese / Ghana. The matter in question is that CVRD has suspended from July of 2007 to transport manganese ore from Azul Mine in Carajas area of Para State ( shifted to give priority to transportation of iron ore ). Therefore, Azul Mine has to decrease their production of manganese ore to a large extent.
It was reported that Azul Mine produced only 10,000 tons of manganese ore in July - September quarter of 2007, meaning nearly stoppage of ore production, and, consequently, the total quantity of manganese ore produced by 3 Mines of CVRD in July - September came to 100,000 tons, which had an extreme decrease from that ( 610,000 tons ) in the same period of 2006. According to the customs-statistics released in Brazil, this country exported 981,000 tons of manganese ore in January - September of 2007, which consisted of 156,000 tons of high grade ore and 825,000 tons of other ores and increased by 9.8% compared to that ( 893,000 tons ) in the same period of 2006.
This increase of manganese ore exported from Brazil in the first 9 months of 2007 was related to price of manganese ore. In 2006 when price of manganese ore had been depressed, Buritirama Mine in Carajas area reduced their exports of manganese ore but revived the exports in 2007, having resulted in an increase of manganese ore exported from Brazil in 2007. Buritirama Manganese Mine has the capacity to produce 600,000 tons per annum of high grade manganese ore and is supposed to have exported 463,000 tons of manganese ore ( consisting of 226,000 tons for the USA and 236,000 tons for China ) in January - September of 2007.
The matter in question for 2007 is that the capitals to manage manganese mines have strengthened to come to be more oligopoly. The Ukrainian capital, having succeeded in taking over Ghana Manganese Company in spring of this year, is now going to acquire Consolidated Minerals Ltd.( CML ) of Western Australia and struggling with a rival company ( Pallinghurst Consortium ) on acquisition of CML since July of this year. If Palmary Enterprises, based on Ukrainian capital, would be successful in taking over CML, it is anticipated that an attitude to sell 1,000,000 tons per annum of high grade manganese ore will largely change.
Ghana Manganese produces low grade manganese ore with less than 40% of Mn content but, on the other hand, CML produces high grade manganese ore with higher than 48% of Mn content. Accordingly, it is easily imagined that Ukraine, where has suffered from a shortage of high grade manganese ore, will preferentially take high grade ore ex. CML and restrict their traditional exports of high grade manganese ore for China.
China is the largest market of manganese ore in the world and is scheduled to import 6.20 million tons of manganese ore in the calendar year ( January - December ) of 2007 ( already imported 4,629,000 tons in January - September ) but the imports of manganese ore from Ghana, Brazil and India, on which China largely relied as the sources in 2006, are thought to decrease in 2007, because it is anticipated that the concentration of capitals and the decreased production of manganese ore as mentioned above will put a substantial influence on the supply situation of manganese ore.
BHP Billiton and Eramet increased their production of manganese ore in 2007 but an effect of their increase in production of manganese ore for 2008 is thought to be restrictive. Because of the limited capacity to transport cargoes in South Africa, BHP Billiton has to continue their South African production of manganese ore in 2008 on a similar level to that in 2007. Therefore, BHP Billiton has to rely on their Australian production of manganese ore but, owing to the circumstances at harbors in Australia, has had insufficient capacity for shipping cargoes. Eramet is able to produce up to 3.50 million tons per annum of manganese ore at Moanda Mine of Gabon and plans to increase their production of manganese ore in 2008 but, in view of the fact that Eramet already produced manganese ore on a pace of 3.30 million tons per annum in 2007, an extent to increase their production of manganese ore in 2008 will be limited.
The prices of manganese ores settled with Chinese buyers for shipments in October - December quarter of 2007 are (1) medium grade ore ( with Mn 45% ) : at US$7.00 - 7.30 per Mn 1% CIF on yearly contract base ( compared to US$6.40 - 6.50 for July - September quarter ) and (2) stocked spot cargoes of medium grade ore : at US$8 - 9 per Mn 1% ex. warehouse at harbor. These prices of manganese ores are forecasted to rise further in 2008. Spot price of medium grade manganese ore is anticipated to rise to a level of US$10 per Mn 1%.
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