South32 to sell Mn alloy smelter stake to GFG

Australian mining firm South32 is selling its entire stake in manganese alloy smelter Tasmanian Electro Metallurgical Company (TEMCO) to London-based GFG Alliance, as the company adapts to the Covid-19 pandemic's sharp impact on manganese prices.

The sale of the stake represents "another milestone for South32 as it continues to reshape its portfolio", after approval from Australia's Foreign Investment Review Board, it said.

The Australian firm is the largest producer of manganese ore in the world but in July mulled its manganese alloy future, with prices having collapsed since mid-February. European prices for manganese flake peaked on 12 February at $2,325/mt, but fell sharply the next month, dropping to $1,585/mt on 27 March. Argus last assessed min 99.7pc manganese flake at $1,480-$1,560/mt du Rotterdam yesterday.

Last month, the company confirmed that it had been hit with an impairment charge of $109mn and that it was continuing a review of its TEMCO smelters. TEMCO is run by the Samancor Manganese joint venture, 60pc of which is owned by South32, with 40pc held by Anglo American.

At the end of July, South32 reduced its manganese export prices to China, a direct result of weaker demand and plentiful supply in Chinese ports. Its prices for Australian 45.5pc lumpy manganese ore were cut to $4.20/mtu cif China for September shipment, from $4.61/mtu cif China for August.

By Yusuf Khan