The 2024 manganese market was impacted by several factors including growing demand for battery applications, geopolitical risks, production disruptions and strategic investments.
Positive demand from the electric vehicle sector offered support as automakers increasingly turned to manganese-rich lithium-ion chemistries like lithium manganese iron phosphate (LMFP) to cut costs and reduce reliance on nickel and cobalt.
Meanwhile, supply chain vulnerabilities emerged due to political instability in major producing regions and heightened environmental scrutiny. In response, nations such as the US and Australia accelerated investments in refining facilities to reduce dependence on China and secure their EV battery supply chains.
Later in the year oversupply stemming from weaker than expected Chinese steel demand muted price growth in the space.
“Manganese sulphate prices turned bearish in Q4 … with slow spot buying in China and the effects of weather-related mine supply disruptions in Australia,” a Fastmarkets report from December reads.
Despite these challenges, the metals pricing firm foresees a recovery in the manganese market in the years ahead.
“We expect demand to grow from now and into the 2030s, driven in part by new chemistries like LMFP,” the firm notes. In the short to mid-term, China’s supply base looks set to fulfil global needs of high purity manganese, though there is likely to be a long-term need for a greater high purity manganese capacity.”
2024 trends: Supply disruption
Recounting the most impactful trends in the 2024 manganese market Clare Hanna, senior steel analyst at CRU pointed to several factors.
“The key drivers in 2024 were the outage at South32’s (ASX:S32,OTC Pink:SHTLF)Groote Eylandt mine, the surge in alternative supplies and the weak state of Chinese demand,” she said.
“This led prices to first rise very sharply and then plummet as the market oversupply became apparent.”
South32 — the world’s largest manganese producer — saw operations suspended at its Australia-based Groote Eylandt mine in March due to a tropical cyclone. A phased return to mining began in June 2024, however the severity of flooding due to the cyclone has impacted a wharf and the company’s ability to export.
In a statement, South32 said it expects exports to resume in Q3 2025.
Some of this reduced 2024 output was offset by purchase declines in China. As Hanna explained, Chinese demand was weak due to lower demand for steel rebar which was driven by weakness of the Chinese real estate sector.
Prices for manganese ore could face headwinds in the year ahead as South32 continues to ramp up Groote Eylandt.
“The return of South32 to the market and the increase in high-grade supply could be a challenge, given the Chinese real estate market is not expected to improve significantly. Steel demand and production in other markets is forecast to improve,” said Hanna.
Key demand drivers for 2025
Prized for their high energy density, automakers are increasingly turning to manganese-based batteries for their cost-effectiveness and reduced reliance on expensive metals like nickel and cobalt.
Although, as Hanna pointed out, the majority of manganese demand is still attributed to the steel sector.
“There is a lot of noise in the market about manganese usage in EV batteries, driven in part by companies looking for finance, and also because downstream, the processing of manganese ore for battery grade manganese products is heavily concentrated in China at the moment,’ she said. “However, it is worth recognising that in terms of manganese ore demand, the share that is going into EV supply chains is very small.”
The senior analyst went on to note that those dynamics are likely to shift in the coming years.
“While [EV sector] volume is growing and the demand from the steel sector is likely to decline over time, demand from steel supply chains will remain the dominant source of manganese ore demand, and therefore the biggest demand side influence on manganese ore prices,” said Hanna.
She went on to explain why the smaller EV market need has dominated the manganese narrative.
“When looking for investment, companies like to align their projects with growing market sectors, so when companies are talking about new mine investments, they often reference the EV supply chain, even if in practice, most of the ore will likely go to ferroalloy producers for consumption in steel production.”
Supply diversification
Like so many of the battery metals, the manganese supply chain is dominated by China, a factor many western nations are trying to grapple with. In an effort to bolster supply outside of China significant investments were made in 2024.
“What we are seeing is a number of projects aimed to produce High Purity Manganese Sulphate (HPMSM) outside of China to reduce OEM EV battery supply chain risk or take advantage of the benefits of the Inflation Reduction Act. Some of these are aligned with new or existing upstream mines,” said Hanna.
Despite the plan looking good on paper, the CRU steel specialist pointed out the challenges with building HPMSM supply independent of China.
“While some have pilot plants (some very small), operational plants are still at minimum, a couple of years off,” Hanna said.
She continued: “Production of HPMSM is a chemical process so existing producers of manganese metal or other manganese chemicals would be able to move into this product area more easily than ferroalloy producers, although there are still a lot of technical challenges. There are no ferroalloy producers, outside of China, moving to produce HPMSM.”
Some of those projects in the pipeline include the Manganese Metal Company’s HPMSM Metal to Crystal project in South Africa. Described as a more sustainable process, the Metal to Crystal production method will start with a 5,000 metric ton per annum plant in 2028, followed by a ~30,000 metric ton per annum plant, targeted beyond 2030.
Hanna also referenced South32’s US-based Hermosa project which received a US$20 million grant from the US Department of Defense in May 2024. The monies have been earmarked for the acceleration of domestic production of battery grade manganese.
Manganese processing plants have also attracted US government funding.
In September, Element 25 (ASX:E25:OTCQX:ELMT) secured a US$166 million grant from the US Department of Energy (DoE) under the Battery Materials Processing Grant Program.
The funding infusion will support the construction of E25’s HPMSM facility in Louisiana. The grant is in addition to US$115 million in funding already secured from offtake partners General Motors (NYSE:GM) and Stellantis (NYSE:STLA).
The feedstock for the Louisiana plant will originate from Element 25’s Butcherbird mine in Australia. In November, the company released a new resource estimate for the planned expansion at Butcherbird.
According to the company, the new estimate registers a 142 percent increase in measured and indicated resources, which now total 130 million tonnes at 10.23 percent manganese. Additionally, the site hosts a total resource of 274 million tonnes at 10 percent manganese.
Other notable companies Hanna referenced include: Euro Manganese (TSXV:EMN,OTCQB:EUMNF), which is developing a project in Czech Republic using manganese from old mine tailings, and also looking at plans for a plant in Quebec, Canada.
“Firebird Metals (ASX:FRB,OTC Pink:FRBMF) (in) Australia, has adopted an alternative approach,” she said. “They are partnering with a Chinese group to build an HPMSM plant in China, which could eventually be supplied with ore from an Australian mine.”
Trends to watch
While these supply chain diversification efforts aim to secure and steady output, Hanna warned of some trends to watch in 2025. Top of mind is South32’s Groote Eylandt mine and its ability to restart shipments this year.
In South Africa, she highlighted national rail operator Transnet’s plans for expansion.
“Transnet’s plans for the new port and rail infrastructure at Coega in South Africa are still some way off,” said Hanna. “The company’s performance on the existing rail network and ability to open up the routes beyond traditional miners will influence how much ore needs to be moved via the higher cost rail route.”
plans remain distant, while inefficiencies in the existing rail network could raise transport costs. Gabon’s production expansion in Moanda faces delays due to weak demand, compounded by past disruptions from railway landslides. In Ukraine, war-related damage to production and demand persists, with recovery dependent on potential ceasefire agreements.
Manganese producer Eramet (EPA:ERA), has also faced challenges to its production expansion plans at the Moanda project in Gabon.
“These [plans] were slowed in Q4 by weak demand,” she said. “Work continues on improvements to the Trans Gabon Railway. Landslides and derailments in the past have disrupted supply causing ore price volatility.”
A resolution to the war in Ukraine could also serve as a catalyst to the 2025 supply and demand story.
“Historically Ukraine was a significant producer and consumer of manganese alloys. Both have been slowed by the war. In the event of a ceasefire this year, supply is likely to return faster than demand as the large Mauripol steel plant was destroyed during the Russian invasion,” she added.
According to Hanna, key areas to watch as the year progresses are trade actions and carbon taxes. These include the US investigation into ferrosilicon imports from several countries, paired with the incoming Trump administration may signal broader tariffs.
Elsewhere, the EU’s probe into manganese alloys and ferrosilicon may raise regional prices
“The EU Carbon Border Adjustment Mechanism is due to come in at the beginning of 2026. Ferromanganese is covered, silicomanganese is not,’ said Hanna. “There is a lot of uncertainty about the impact of this.”
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.