Manganese Ore: Balaghat Private Miners Struggling on a Confluence of Factors

Balaghat is one of the major Manganese ore producing regions in India, which is spread over Madhya Pradesh and Maharashtra. These two states collectively contribute to approximately 57% of total Manganese Ore production in India. However, due to the curtailed operations at Ferro Alloys plants, the miners are facing a tough time.

India's biggest Manganese ore miner, MOIL, revised the prices of Manganese ore in the domestic market by 45% in the first week of May'2020. However, the private miners were able to hike their offer prices by around 20-30%. For instance, grades 24% and 34-36% are being offered by the private miners at INR 5000-5500/MT, meanwhile, similar grade from MOIL is being offered at INR 6248/MT and INR 12480/MT respectively. The producers of Manganese alloys have enough inventory of Manganese ore; thus, they are refraining themselves from procuring ore at such high prices. Moreover, most Manganese Alloy plants are operating at low utilization rates, which will also ensure that the inventory lasts longer.

The miners in Balaghat are operating under MHA guidelines and the current capacity utilization remains around 30%. Though the Government has included mining as an essential service to ensure continuity of operations during the lockdown, mining activities have been severely impacted coupled with weak demand. The Mining sector is facing severe manpower issues as most of the contractual labourers have left for their hometown.

Balaghat private miners are having to deal with several adverse issues. Logistics have been severely affected and the transporters have also been restraining from moving goods. Many mine blocks are closed as they fall under containment zones and red zones. Moreover, with no deals happening, the miners are facing extreme cash flow problems. A Balaghat based Miner shared that it is already May, and the production and demand hasn't picked up, soon monsoon will kick in and it will be difficult to mine. The fixed cost incurred by the miners is also quite high. The Miners also complained that the labour issue that they face is different than other smelters as they need to train the employees for working in the mines before giving the job, which makes the situation worse, as they need to call up the specific trained workers.

Barbil miners have also increased the prices by approximately 20% post MOIL's revision of prices. Although the miners have limited demand. Most of the manganese ore mines are low on stock as the production has been down for almost two months now.

Meanwhile, Imported Manganese ore prices have also started retreating since past two weeks amidst low demand. There is non-acceptance of higher prices in China too, as they have sufficient stock at their ports and the global steel market remains dull.