United Manganese of Kalahari (UMK) has demand for over half a million tonnes of manganese ore per month and is unable to ship its full monthly capacity due to South Africa’s logistical constraints, according to ceo Johan Kriek.
“We could ship 500,000 tonnes per month [based on demand], we just don’t get the trains we’re promised,” Kriek told Metal Bulletin on the sidelines of the 6th South African Ferro-alloys conference in Johannesburg.
Manganese market participants have long since warned that a lack of rail capacity is limiting volumes.
UMK has capacity to ship 350,000 tpm, Kriek said, but added that the company’s actual shipments don’t come close to that figure.
“We have demand for much more than 500,000, but we can only transport 200,000-250,000 due to logistical constraints,” he sad.
“If I annualised August production it would come to 4.5 million tonnes a year and our internal target is to reach 4.8 million tonnes a year,” he said.
“Manganese ore around the world is constrained by virtue of logistics,” he added.
The transport restrictions faced by South Africa and other manganese-producing countries will keep ore prices at “reasonable” levels over the next few years, but if they are resolved prices will drop and some producers will be knocked out of the market, according to Kriek.
“I think manganese ore in the next five to seven years is in for a reasonable time with these constraints around the world. [Otherwise] only the low cost producers will survive, the others will close more or less overnight,” he said.
Janie Davies firstname.lastname@example.org Twitter: @janiedavies_mb