Shaw River Manganese Limited, owners of Otjizondu Mine about 300km off Windhoek will have to delay their heightened intentions to start operations by mid this year because of the unstable global manganese prices.
Prices of the steel-making agent (manganese) plummeted to below economic targets for most producers last year. However, Shaw River, listed on the Australian Stock Exchange (ASX) and has a 75%-stake in Otjizondu, is currently drilling at Otjizondu Mine.
Manganese is one of the most sought-after agents in the steel manufacturing and auto mobile industry as it is used as one of the essentials when molding steel.
Major consumers of manganese are mostly highly industrilised countries including Germany, Russia, United States of America, Japan and China.
Shaw River Manganese Limited country manager, Ashley Jones who is also backed by an Australian billion-dollar mining company, Atlas, through a 40%-stake ownership, had been targeting full-scale operations by this year but now has to wait for manganese prices to swell to at least US$4-.50 per dry metallic tone.
“It’s actually important that the prices of manganese start showing signs of improvements and we will wait a bit for that to happen before we start selling. The prices plummeted heavily last year when the Euro debt crisis started and it worsened when the Greek economy was affected, so that pushed us back a little,” said Jones.
According to Jones, the company will also have to find an alternative to the intended 135 Megawatts electronic furnace that they need to smelt the manganese for purification.
“There obviously have to be a plan because the consumption of the country on electricity stands at about 500 Megawatts and the furnace will have to be about 130MW, which is not practical or economical.
“However, despite the delay in the selling of the harnessed products, the company, which is starting its first mining phase in Namibia at the Otjizondu Mine after predominantly spending most of the investments in exploration, is very eager to exploit the resources in Namibia and Ghana.
“We still believe we have the potential to grow fast and improve our visibility. The company has potential to grow because we have good back-up from our mother company, which has about a 40%-stake in our operations and that alone, should prove that there are possibilities ahead,” said Jones.
The company also has a strong balance sheet and has a total of shares on issue amounting to N$451m and a market capitalisation of US$30.7m (approximately N$211m).
Jones says the company currently employs 56 people on site and upon commencement of full-scale operations; the staff complement will swell to between 150 and 200 employees.
This year, the company targets to complete a resource update including resource category upgrade; feasibility study at Otjo; commence hand-sorting and fines stockpile re-processing; complete customer analysis and negotiate manganese ore marketing agreements as well as the completion of Pilbara resource estimation and beneficiation test results.
Operations of Otjizondu Mine cover a wide area including the Bosrand, North Bosrand, East Otjizondu and Labusrus in the Otjozondjupa Region.