UMK shifts back to rail amid softer market conditions
South African mining company United Manganese of Kalahari (UMK) has said it will, for now, exclusively use rail transport for its manganese exports, with CE Malcolm Curror noting that it is responding to softer market conditions and the current dynamics of supply and demand.
He says manganese ore inventories at Chinese ports are at an all-time low, but that prices for semi-carbonate ore are still declining despite these low stocks.
As a result, the company has determined that China’s upstream ore market is adapting to a more streamlined supply chain, showing increased flexibility regarding lower stock levels at the ports.
“It is clear that ongoing weak steelmaking activity is limiting the potential for manganese ore prices to rise.
“The uncertainty created by ore export quotas and tariffs aimed at encouraging beneficiation, as mentioned by Mineral and Petroleum Resources Minister Gwede Mantashe, is expected to affect South Africa's manganese ore supply,” says UMK.
At present, UMK accounts for about 12.5% of South Africa's manganese exports and is the country's second largest manganese producer.
Early last year, UMK also imposed a temporary export limit to responsibly manage its resources during market fluctuations.
“During the prior effort and this current one, there will be no disruption in the value chain,” says Curror, stressing that this strategic shift will not affect business continuity.
“UMK consistently assesses global market trends and, as in the past, the company will maintain production and export flexibility to enhance overall sustainability,” he adds.
UMK extracts manganese from an openpit mine located in the Kalahari region, close to Hotazel, in the Northern Cape manganese fields.
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