OM Holdings has recommissioned its Qinzhou manganese smelter in China after a four-year pause due to high power costs, signaling a strategic push to regain production capacity and market share.
- Qinzhou smelter recommissioned after suspension since December 2021
- Annual capacity – 80,000–95,000 tonnes manganese alloys, 300,000 tonnes sinter ore
- Phased restart planned to optimise operations
- Joint venture with Shaanxi Sinian Metal holding 60% stake
- OMS retains 40% interest following recent sale completion
Recommissioning After Hiatus
OM Holdings Limited (ASX – OMH) has announced the recommissioning of its Qinzhou smelter and sinter plant in China, marking a significant operational milestone after production was halted in late 2021. The suspension was primarily due to elevated power tariffs, which had rendered operations economically unviable. The restart signals OM Holdings’ renewed commitment to its manganese alloy production capabilities amid evolving market conditions.
Capacity and Technology
The Qinzhou facility features two furnace sets with capacities of 25.5 MVA and 16.5 MVA, designed with a closed-furnace system that recycles flue gases for sintering. This setup supports an annual production capacity ranging from 80,000 to 95,000 tonnes of manganese alloys and up to 300,000 tonnes of sinter ore. The phased recommissioning approach suggests a cautious ramp-up, allowing the company to optimise operational efficiency and manage costs effectively.
Strategic Partnership Dynamics
The smelter is operated through a joint venture, OM Materials (Qinzhou) Co., Ltd., in which OM Holdings’ wholly owned subsidiary OMS holds a 40% stake, while Shaanxi Sinian Metal & Mining Co., Ltd. owns 60%. This ownership structure followed OMS’s sale of a 60% interest completed in late 2025. OM Holdings’ Executive Chairman and CEO, Mr Low Ngee Tong, emphasised the importance of collaboration with Shaanxi Sinian Metal to optimise plant operations and enhance shareholder value.
Market and Operational Implications
The recommissioning comes at a time when manganese alloys remain critical for steelmaking and emerging battery technologies, positioning OM Holdings to capitalise on potential market rebounds. However, the company has not disclosed specific timelines for full production ramp-up or detailed cost structures post-restart. The phased approach may reflect ongoing uncertainties around power tariffs and operational costs in China, which have historically impacted profitability.
Looking Ahead
Investors will be watching closely for quarterly production updates and any guidance on cost management strategies. The partnership with Shaanxi Sinian Metal could prove pivotal in navigating the operational challenges ahead. OM Holdings’ ability to efficiently restart and scale the Qinzhou smelter will be a key factor in its competitive positioning within the manganese alloy sector.
Bottom Line?
OM Holdings’ phased restart of Qinzhou smelter sets the stage for a cautious but potentially rewarding return to manganese alloy production.
Questions in the middle?
- What is the expected timeline for reaching full production capacity at Qinzhou?
- How will fluctuating power tariffs in China affect ongoing operational costs?
- What strategic initiatives will OM Holdings and Shaanxi Sinian Metal pursue to optimise plant performance?