The Tshipi manganese mine, in the Kalahari manganese field in South Africa’s Northern Cape province, delivered a strong quarterly performance, increasing both sales and production volumes in line with rising manganese prices, ASX-listed Jupiter Mines reports in a quarterly activities report for the quarter ended December 31.

Jupiter has a 49.9% beneficial interest in Tshipi é Ntle Manganese Mining, which operates the Tshipi mine.

Production was weighted toward high-grade ore to take advantage of favourable market conditions, with high-grade volumes increasing by 10%.

Production volumes reached 840 688 t in the quarter.

Tshipi achieved a 4% increase in sales compared with the previous quarter, reaching 867 619 t, and remains on track to meet its targeted full-year sales.

Tshipi recorded earnings before interest, taxes, depreciation and amortisation of $21.6-million, a decrease of 19% compared with the previous quarter, mainly driven by foreign exchange movements.

Cash decreased slightly by 2% to $137.4-million.

Tshipi recorded two lost-time injuries, both being slip and fall incidents.

MANGANESE MARKET

Jupiter says that manganese market conditions were supportive during the quarter, with prices moving higher across both seaborne and portside markets.

This was largely driven by low stock levels in China, particularly for high-grade oxide ore, alongside tighter export supply, it points out.

“As prices for high-grade material increased, customers made greater use of semi carbonate ore, which also supported pricing. Toward the end of the quarter and after quarter end, seasonal restocking ahead of the Chinese Spring Festival and a stronger Chinese Yuan provided further support to manganese ore prices,” the company highlights.

It notes that demand for manganese ore in China remained steady, with alloy producers continuing to operate at high levels and consume significant volumes of ore.

While margins for alloy producers remained under pressure owing to oversupply in the alloy market, production levels and ore arrivals were largely unchanged from the previous quarter.

As a result, manganese ore inventories remained in line with the previous quarter at around 4.3-million to 4.4-million tonnes, much lower than long-term historical standards, Jupiter explains.

Demand remained strong in Northern China, where ongoing investment in new and expanded alloy plants, particularly in Inner Mongolia, is focused on improving long-term efficiency through greater use of renewable energy, it adds.

ACQUISITION UPDATE

JSE-listed Exxaro Resources on January 29 indicated that it had satisfied all conditions for the acquisition of various manganese mining investments in South Africa, including a 50.1% ownership in Tshipi and a 19.99% share in Jupiter Mines.

Formal completion of the transaction is scheduled for on or before February 27.   

Exxaro will acquire the 19.99% share in Jupiter from Ntsimbintle Holdings. Exxaro will pay R3.69 per Jupiter share on the date of completion.  At today’s foreign exchange rate, this equates to A$0.33 per Jupiter share.

Jupiter will retain its 49.9% interest in Tshipi and continue to exercise joint control over Tshipi operations.

There is no change to Jupiter’s rights under the Tshipi shareholders agreement, including its pro rata marketing rights.

Jupiter has welcomed Exxaro joining the company as a major shareholder and joint venture partner in Tshipi, with the investment expected to strengthen its platform for growth, and aligning to its strategy to consolidate and create value across the Kalahari Manganese Field.