OM Holdings Projects 435-450 ktpa Production, Surpasses FY24 Guidance by 3%

Strong FY24 Performance and Strategic Shifts

OM Holdings Limited (ASX: OMH) has delivered a solid operational update for the fourth quarter of 2024, showcasing production volumes that marginally exceeded the upper guidance by 3%. The company’s manganese alloy and ferrosilicon production volumes demonstrated resilience despite challenging market conditions, underscoring OMH’s operational discipline and strategic agility.

Notably, OMH has converted both of its silicon metal furnaces to ferrosilicon production, a move aimed at maximising furnace utilisation and optimising returns. This strategic pivot reflects management’s pragmatic approach to market realities, prioritising product lines with stronger near-term demand and pricing dynamics.

FY25 Production Guidance and Operational Outlook

Looking ahead, OMH has set preliminary production guidance for FY25 in the range of 435,000 to 450,000 tonnes per annum (ktpa) for ferrosilicon and manganese alloys. This guidance signals confidence in the company’s capacity to ramp up output while maintaining operational efficiency.

Maintenance activities remain a key focus, with 14 out of 16 furnaces having completed major maintenance and the remaining two ferrosilicon furnaces scheduled for maintenance in 2025. These efforts are critical to sustaining production quality and reliability.

Sustainability Recognition and Mining Operations

OM Sarawak, a key asset within OMH’s portfolio, was honoured with the prestigious Diamond Award under the Large Enterprise category at the Bintulu Sustainability Awards 2024. This accolade highlights the company’s commitment to environmental stewardship, particularly as it progresses rehabilitation works on its manganese ore mine, which remains under care and maintenance.

Trial production at the mine is advancing well, with a second trial planned for early Q1 2025 to optimise feed throughput and ore grades. These developments suggest a cautious but deliberate approach to resuming full mining operations.

Market Dynamics: Ferrosilicon and Manganese

The ferrosilicon market remains rangebound, influenced by Chinese production costs and geopolitical factors such as the potential nationalisation of Russia’s largest ferrosilicon producer. Prices closed at approximately $1,185 per metric tonne CIF Japan at the end of 2024, down 11.5% year-on-year. While near-term price pressure persists, the absence of Russian supply is expected to eventually catalyse a price recovery.

In manganese markets, ore prices have corrected from earlier surges caused by supply disruptions, with manganese ore closing at US$4.08/dmtu and silicomanganese prices slightly increasing to $885/mt CIF Japan in December. The normalization of prices after volatility bodes well for market stability moving forward.

Strategic Implications and Investor Considerations

OM Holdings’ operational updates and market insights provide a nuanced picture of a company navigating complex commodity cycles with strategic flexibility. The conversion of silicon metal furnaces to ferrosilicon production and the focus on sustainability initiatives position OMH to capture value as market conditions evolve.

Investors should monitor the company’s ability to execute on its FY25 production targets amid ongoing maintenance schedules and market uncertainties. Additionally, developments in the manganese ore mine’s trial production and broader geopolitical influences on ferrosilicon supply will be key factors shaping OMH’s trajectory.