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"Hurricane Fallout: How a Year-Long Manganese MineShutdown Shook China’s Market—and What’s Next for Global Supply"

April 4, 2025

Disclaimer: This article contains forward-looking statements and market analysis based on available data and industry trends as of April 2025. These statements involve risks and uncertainties; actual outcomes may differ materially from those projected. The author and publisher are not responsible for any decisions made based on this information.

According to South32's official statement, it has been exactly one year since the April 2024 hurricane severely impacted South32’s Groot Eylandt manganese mine in Australia, leading to its suspension of operations. This natural disaster not only significantly affected South32’s global operations but also altered the supply and demand dynamics of the global manganese market, with notable impacts on China, the world's largest manganese ore consumer.

In April and May 2024, when South32 announced the suspension of production and shipments from the Groot Eylandt mine, the Chinese market quickly sought to secure manganese ore supplies. As an essential raw material in steel production, concerns over a potential manganese shortage drove up market prices, prompting traders and downstream companies to stockpile. However, this tension did not last long. With the swift response from other global manganese-producing regions, the market gradually rebalanced, and manganese prices fell back, re-entering a bearish phase with signs of oversupply.

According to data from China’s General Administration of Customs, China total manganese ore imports in 2024 amounted to 29.34 million tonnes, a decrease of 2 million tonnes compared to 31.34 million tonnes in 2023, representing a year-on-year decline of approximately 6.4%. This drop partially reflects weakened domestic demand in China, while also being tied to the reconfiguration of global manganese supply. Specifically, China imports of manganese ore from Australia fell from 5.25 million tonnes in 2023 to 2.14 million tonnes in 2024, a decrease of 59.2%. This supply gap was filled by African manganese producers. Imports from South Africa increased from 14.62 million tonnes to 15.93 million tonnes, a year-on-year rise of 9.08%, while imports from Ghana surged from 2.93 million tonnes to 4.65 million tonnes, a year-on-year increase of 59.39%. However, imports from **on declined from 4.86 million tonnes to 4.20 million tonnes, a year-on-year decrease of 13.58%. The combined imports from South Africa, **on, and Ghana accounted for 84.5% of China total manganese ore imports in 2024, underscoring the critical role of African manganese in the Chinese market.

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At the same time, the decline in China crude steel production suppressed manganese ore demand. The China Iron and Steel Association reported a 1.7% drop in China crude steel output in 2024 compared to 2023, a reduction of approximately 14 million tonnes. This decline likely led to a reduction in manganese ore demand by about 300,000 tonnes, though official figures may vary. Manganese ore is primarily used to produce silicon-manganese alloy, a key additive in crude steel production. From the silicon-manganese to crude steel ratio, there was no significant shortage of silicon-manganese supply throughout 2024, indicating that the increased supply from African sources and adjustments in China's domestic manganese resources mitigated the supply pressure.

Hypothetical Scenario: If South32 resumes production and shipments from its Groot Eylandt mine, industry analysts estimate that the Chinese market could see an additional 2-3 million tonnes of manganese ore supply, though official figures from South32 are yet to be confirmed. This increase could potentially have a significant impact on the current market landscape, depending on market conditions. The additional supply might intensify market competition, potentially affecting the market share of African manganese producers. Suppliers from African countries such as South Africa and Ghana could face greater price pressure, particularly since their manganese ore grades are generally lower than Australia’s high-grade ore. Additionally, China domestic producers of rich-manganese slag, which saw increased demand over the past year, might also be affected.

This new supply could also create challenges for South32. According to industry reports, most Chinese ferroalloy producers have adjusted their production formulas over the past year, increasingly using medium- and low-grade manganese ore and rich-manganese slag as substitutes. It is uncertain whether they will opt to pay a premium for high-grade manganese ore again, as their production adjustments may have reduced reliance on such materials. South32 could face challenges, as the resumption of production in Australia might depress global manganese prices, while its South African manganese sales could face further pressure due to price competition.

From a longer-term perspective, the future trajectory of the manganese market remains uncertain. The continued decline in China’s crude steel production could further compress manganese ore demand, while the global transition to green energy might bring new growth opportunities for manganese in lithium-manganese batteries. The stability of the global manganese supply chain also warrants attention. South Africa has faced challenges with power shortages in recent years, as reported by Eskom, which could potentially affect manganese production and exports. Similarly, Ghana’s recent mining policy adjustments have raised concerns among some industry observers about their impact on the mining sector.

For the Chinese market, diversifying the manganese supply will be a key strategy to mitigate future risks. China may need to deepen cooperation with African manganese-producing regions, increase domestic resource development, and explore technological advancements in manganese substitutes. Chinese ferroalloy producers might also need to optimize their production processes to improve the efficiency of using medium- and low-grade manganese ore.

In summary, the suspension of South32’s Groot Eylandt manganese mine and its potential resumption highlight the complexity of the global manganese market. The additional supply could intensify competition and depress prices in the short term, but its long-term impact will depend on various factors, including Chinese market demand, global supply stability, and South32 strategic adjustments. China will need to balance supply diversification, technological innovation, and market risk management to ensure a stable supply of manganese resources for sustainable development.