The global manganese market is facing an impending shortage, likely to materialize sooner than anticipated. High-quality manganese ore is becoming increasingly scarce due to depleting resources in aging mines and a slow development of new supply sources.

While the market is expected to remain balanced or experience a surplus until 2026, a significant deficit is projected to emerge in the late 2020s, potentially triggered by mine closures and supply chain disruptions. This impending shortage is expected to drive price increases, a trend that has already begun in 2024 due to global production interruptions.  

A major disruption occurred with the temporary shutdown of the Groote Eylandt mine in Australia, one of the world's largest manganese producers. The suspension, caused by weather-related damage, led to a 15% global shortage of high-grade manganese, causing prices to surge for both manganese oxide and the benchmark manganese. Although mining operations have resumed, shipments are not expected to restart until the third quarter of 2024.  

This event has had a global impact, exacerbating existing supply chain challenges. Despite a slowdown in manganese demand from alloy smelters in China in late 2024, an oversupply situation arose with increased supply from South Africa. This, in turn, forced several producers, including Eramet, to reduce production to stabilize the market.  

Manganese is primarily consumed by the steel industry, accounting for over 90% of demand, as it is crucial for enhancing the strength and hardness of steel. Despite weaker steel demand from China in 2024, the World Steel Association forecasts a global recovery in steel production by 2025, which will further amplify the demand for manganese.  

Furthermore, manganese is gaining traction in the battery manufacturing sector. It is a key component in lithium-ion batteries, particularly in nickel-cobalt-manganese (NCM) and lithium-iron-phosphate (LFP) batteries. The addition of manganese to LFP batteries, creating LMFP (lithium-manganese-iron-phosphate) batteries, offers improved energy density, enhanced cold-weather performance, and reduced costs. This makes LMFP a strong contender in the battery market, with projections indicating it could capture 44% of the global battery market share by 2025.  

As the demand for manganese in batteries increases, companies like Firebird Metals are ramping up production of battery-grade manganese sulphate. Firebird has already secured a supply agreement with Eramet to support its planned plant in China, which aims to produce 50,000 tonnes of manganese sulphate annually.  

However, the manganese market outlook is complex. Mining operations in Australia face impending closures, and geopolitical and infrastructure challenges in Africa further threaten the stability of global supply. This creates a vulnerable supply chain prone to sudden shocks, leaving the market apprehensive as it prepares for potential disruptions and price spikes soon.