Russia-Backed Manganese Mine Exploits South Africa's Massive Resource Reserves

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Written by Richard Finlayson, Senior International Editor for Industrial Info--South Africa contains 80% of the world's high-grade manganese ore, but controls only 15% of the global trade of the mineral. China, with only 5% of the world's manganese, holds 35% of global trade. A move toward rectifying South Africa's under-exploitation of the resource was made when United Manganese of Kalahari (UMK) (Sandton, South Africa) opened a new manganese mine in the arid Northern Cape region. The $180 million project is 51% owned by black South Africans and 49% by Russian company Renova (Moscow).

The new mine is near Samancor Chrome's (Sandton) Mamatwan chrome mine in the Kalahari Basin region. UMK has 41 million tons of indentified reserves and a total of 282 million tons of indicated resource. The resource is large enough to allow for opencast mining for a period of 20 years. Currently, UMK is exploiting shallow reserves, from which 1.5 million tons of product was marketed in 2010 to provide cash flow for capital spending for project development. The UMK ore is medium- to high-grade and is exported to Asia, Europe, India and the Middle East. The sales target for 2011 is 1.8 million tons. UMK is aiming for a top-five position in the global manganese production league.

The manganese market generally follows the performance of the steelmaking industry, as eight to 10 kilograms of manganese are used for every ton of steel produced. UMK has built a dedicated rail loop so that ore can be loaded from a newly constructed silo and transported 900 kilometers to the Atlantic coast, or up to 1,500 kilometers east to the South African alloy plants and ore processors. A 750,000-ton-per-year sinter plant is in the advanced planning stage. The mine employs 800 people.

In 2007, Renova acquired 100% of Transalloys Pty Limited (Clewer, South Africa), a ferromanganese alloys producer, in the country's Mpumalanga province. Renova is now conducting due diligence into the feasibility of merging UMK and Transalloys into a consolidated operation. The company is also planning to make investments in the solar power sector as a thin-film solar panel manufacturer, and as the developer of a 120-megawatt solar park. These projects are in addition to Renova's appetite for further mining and energy investments in the country.

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