Jupiter Mines reported a 49% quarter-on-quarter EBITDA increase driven by higher manganese prices, despite cost pressures from exchange rates and Middle East conflict-related freight hikes.
- Stable manganese production at 849,772 tonnes
- EBITDA rose 49% QoQ to A$32.2 million
- Unit production costs up 12% due to Rand strength
- Freight and diesel costs increased amid Middle East conflict
- Exxaro raised Tshipi stake to 50.1%, no impact on Jupiter
Strong Earnings Despite Cost Headwinds
Jupiter Mines Limited (ASX:JMS) reported a robust 49% quarter-on-quarter surge in EBITDA to A$32.2 million for Q3 FY2026, underpinned by rising manganese prices that offset a 12% increase in unit production costs. Production remained steady at 849,772 tonnes, while sales dipped slightly by 3% compared to the previous quarter but were 8% higher than the prior year. The cost rise to US$2.50 per dry metric tonne unit (dmtu) FOB was primarily driven by a stronger South African Rand against the US dollar, a dynamic that would have seen costs at US$2.21 per dmtu if measured at last year’s exchange rates.
Operating cash flow rose 27% quarter-on-quarter, though cash reserves fell 6% to A$129.2 million after the payment of an interim dividend, reflecting Jupiter’s continued commitment to shareholder returns. This dividend payment follows the company’s earlier declaration of an interim payout, which was covered in the A$10.8 Million Interim Dividend announcement.
Market and Operational Pressures from Geopolitical Tensions
The quarter was marked by notable volatility in freight and energy costs linked to the ongoing conflict in the Middle East. Freight rates from Port Elizabeth to Tianjin spiked 48% during the quarter, reaching US$36.90 per tonne before easing slightly to US$32.10 by the end of April. Diesel prices also climbed, driven by energy market disruptions. Despite these pressures, manganese prices rose sufficiently to absorb the increased costs, with the average realised CIF price climbing to US$4.35 per dmtu from US$4.10 the prior quarter and spot prices peaking at US$5.16 per dmtu at quarter-end.
Jupiter’s operational resilience is supported by long-term diesel supply agreements and substantial on-site inventory, enabling the Tshipi manganese mine to maintain continuity amid supply chain uncertainties. The company explicitly noted no current risk to operations stemming from energy market volatility.
Production and Safety Metrics
Mining volumes showed a 14% increase in graded ore extraction, driven by intensified barrier pillar mining, while waste mining volumes fell 14% due to seasonal rain and equipment availability. High-grade ore production decreased marginally by 2%, and low-grade ore production was halted in March to capitalise on favourable market conditions. Safety performance improved with zero lost time injuries recorded and a reduced total recordable injury frequency rate (TRIFR) of 0.37, down from 0.56 last quarter.
Shareholding Update and Corporate Position
During the quarter, Exxaro Resources Limited increased its stake in Tshipi to 50.1% through acquisitions from Ntsimbintle Holdings and OM Holdings. Jupiter’s 49.9% interest and marketing rights remain unaffected by this transaction, preserving its strategic position in the operation. This development follows the earlier joint venture adjustments reported in the Boosts Profit 15.7% in HY2026 update.
Jupiter’s attributable cash position declined slightly to A$76.3 million, reflecting dividend payments and inventory build-up, but operating cash generation remained positive. The company continues to navigate currency fluctuations, with the Rand strengthening 4% against the US dollar but weakening slightly against the Australian dollar.
Market Outlook and Steel Demand Dynamics
Manganese ore prices were buoyed by geopolitical tensions and energy cost inflation, though supply chains remain stable with port inventories in China increasing yet still below long-term averages. Chinese domestic demand remains subdued, weighed down by the real estate slump and elevated steel mill inventories, while global crude steel production growth is forecast to be modest at 0.3% in 2026, contingent on resolution of Middle East conflicts by mid-year. Downstream silico manganese prices have been less responsive, constrained by cautious steel sector demand and expectations of alloy production cuts.
Bottom Line?
Jupiter Mines’ Q3 results showcase resilience amid cost pressures and geopolitical risks, but currency and energy market volatility warrant close monitoring.
Questions in the middle?
- How will ongoing Middle East tensions influence manganese prices and freight costs in the near term?
- What impact might Exxaro’s majority stake in Tshipi have on operational strategy or Jupiter’s marketing rights?
- Can manganese demand sustain price gains given subdued Chinese domestic steel consumption and elevated inventories?