Manganese Price Slump and Furnace Shutdowns Challenge OM Holdings’ Q4 Performance

Production Performance Highlights

OM Holdings Limited (ASX: OMH) reported a mixed but overall positive production update for the December 2024 quarter. The company’s wholly owned smelter in Sarawak, Malaysia, increased ferrosilicon (FeSi) production by 7.7% quarter-on-quarter to 48,061 tonnes, driven by the addition of a silicon metal furnace repurposed to FeSi production. This contributed to a strong full-year FeSi output of 190,517 tonnes, a 36.5% increase over 2023, reflecting improved furnace availability after extensive maintenance in the prior year.

Conversely, manganese alloys production fell 15.5% to 72,769 tonnes due to a furnace shutdown related to an incident in late 2024. Despite this, full-year manganese alloys production rose 8% to 317,995 tonnes, indicating resilience and recovery in operations. Sales volumes showed a 32.2% increase for manganese alloys, attributed to shipment timing, while FeSi sales dipped slightly by 4.5%.

Market Conditions and Pricing Dynamics

The quarter saw a 17% decline in manganese ore prices, with 44% Mn ore closing at US$4.08/dmtu CIF China by December 2024, continuing a downward trend since April. However, late-quarter price quotes suggested a modest recovery. Ferrosilicon prices softened from US$1,275 to US$1,185 per tonne CIF Japan, while silicomanganese prices edged up slightly. Global crude steel production fell 1.8% year-on-year for October-November 2024, exerting pressure on manganese demand.

OM Holdings transacted 514,757 tonnes of ores and alloys in Q4, a 9.2% increase over the previous quarter, mainly due to higher manganese ore volumes. Freight rates eased, supporting cost efficiencies in logistics.

Operational Developments and Sustainability Recognition

The company’s silicon metal furnaces ceased hot commissioning amid global oversupply and subdued demand, pivoting to FeSi production to optimise furnace utilisation. Maintenance programs progressed, with 14 of 16 furnaces completing major works and most passing performance tests. One manganese alloy furnace’s commissioning was extended due to lining issues, expected to complete in Q3 2025.

OM Sarawak was honoured with the prestigious Diamond Award at the Bintulu Sustainability Awards 2024, recognising its leadership in environmental stewardship and sustainable development in the region. This accolade underscores OM Holdings’ commitment to integrating sustainability into its operational strategy.

Mining and Exploration Updates

At the Bootu Creek manganese mine in Australia, care and maintenance continued with progress on the Ultra Fines Plant (UFP) production trials. Initial yields aligned with expectations, though product grades fell short of targets, prompting further optimisation efforts. A second trial is planned for early Q1 2025, with a full production restart anticipated in Q2 2025.

OM Holdings also increased its stake in the Bryah Basin Manganese Joint Venture to 60%, following additional exploration funding. The project holds a JORC-compliant resource of over 3 million tonnes at 20.2% manganese, positioning it as a strategic growth asset.

Financial and Corporate Notes

The company made a significant loan repayment of US$12.4 million during the quarter, reflecting disciplined financial management. Share capital remained unchanged at 766 million shares, with listings on both the ASX and Bursa Malaysia.

OM Holdings maintains a 13% effective interest in the Tshipi Borwa manganese mine in South Africa through its strategic partnership, with the mine’s exports normalising after strong volumes earlier in 2024.