Given the ongoing volatility in the manganese market, including sharp price contractions in recent weeks, the board of ASX-listed Jupiter Mining’s flagship Tshipi manganese mine, in the Northern Cape, has decided to not declare a dividend to its shareholders for the six-month period to June 30.

“The manganese market has experienced significant volatility since April, with conditions turning notably bearish in the past month due to weakening downstream demand,” Jupiter CFO Melissa North said on August 30 at the release of the company’s preliminary final report for the 2024 financial year.

She noted that, although the ongoing outage from South32’s Gemco mine pushed manganese prices higher between May and early June, this supply disruption was more recently outweighed by softer demand factors.

North noted that the key factor was demand from China, where weakness in the country’s steel-intensive real estate and infrastructure sectors had persisted over the past year, with more recent concerns about the near-term outlook for Chinese export steel.

“As a result, steel prices have come under pressure in recent months, leading to a corresponding decline in alloy prices. This has resulted in a reduction in demand for imported manganese, causing prices to decline sharply, particularly in the past month,” she said.

As a result, from their peak in early June, manganese prices have dropped by about 40% and are nearing cyclical low levels. The current price is languishing at just above 21% below the 12-year average. 

The Tshipi board has indicated that it is waiting for a more stable and predictable manganese pricing environment before considering the distribution of a dividend.

The next opportunity for the board to decide a dividend will be following the conclusion of the December 31 reporting period.

Despite this, Jupiter declared a final dividend to its shareholders of $0.0025 a share. The dividend will be funded from Jupiter’s own cash. 

During the period, Jupiter Mines’ 49.9% investment in Tshipi recognised a share of profit of A$40-million for the year, with the company recording a net profit after tax of A$38.4-million. Jupiter’s fees on manganese ore marketing totalled A$8.1-million for the period. Tshipi ended the six-month period with cash reserves of about A$82-million.

Despite the volatile market conditions, North said Jupiter would continue to focus on its strategic priorities, advancing its strategic objectives and five-year company strategy, strengthening its market position and delivering sustainable returns.