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Metal Bulletin’s 37% manganese ore index, fob Port Elizabeth stood at $5.74 per dry metric tonne unit (dmtu) on Friday June 22, up 42.4% from $4.03 per dmtu a year ago.
Tshipi is targeting manganese ore production of 3.3 million tonnes for the full year 2018.
It could exceed this target, the company said, based on its production in the quarter to May 31, 2018, which is the first quarter of its 2019 financial year.
Tshipi produced 915,011 tonnes of manganese ore during the quarter, compared with a budget of 780,000 tonnes and up from 832, 889 tonnes in the same period of last year.
This ensures Tshipi is well-placed to sell into strong markets, even if it has to rely on more expensive road transport from mine to port, Priyank Thapliyal, chief executive officer of Tshipi owner Jupiter Mines, said as the company unveiled its results for the quarter.
“It is largely to take advantage of the market; as we have enough stockpiles available, we are in a position to either truck or rail,” Thapliyal said.
The miner exceeded its rail transportation and shipping targets, mainly reflecting a surge in exports of low-grade ore that had been mined earlier.
“The same happened in logistics; we railed 970,000 tonnes, so roughly 200,000 tonnes ahead and again this was largely to make sure we have enough stockpiles both at mine and port to take advantage of the market,” Thapliyal added.
“We shipped and sold 925,000 tonnes, largely driven by 100,000 tonnes of low-grade product which is readily available at the mine and the port. It’s already mined, it’s already paid for; the cost associated with it is just the logistics cost,” he said.
Tshipi is working with South African state transport operator Transnet to try to increase its rail capacity and cut costs.
By transporting more material by rail, the miner said it can save 250 South African rand ($18.45) per tonne.
“We are very keen to increase our rail allocation. We are working with Transnet to come up with a proprietary idea so that we can get more tonnes on the rail,” Thapliyal said.
“Every tonne which we move from road to rail saves us about 250 rand so that’s the biggest cost saving we are focused on and that is the target of the management team,” he added.
Tshipi’s cost of production is $2.20 per dmtu on a fob basis, including royalty.
[Editor’s note: This article was updated to clarify that Priyank Thapliyal is the chief executive officer of Tshipi owner Jupiter Mines.]