Manganese may not be South Africa’s best-known mineral export, but it may be the commodity that lifts the local mining sector out of its current slump.

With demand for the metal increasing annually, South Africa may be well-positioned to benefit. Let’s find out why.

Manganese – the mineral that drives development around the world

• Two major industrial processes – steel manufacturing and the production of high-capacity power storage batteries – are totally reliant on Manganese.
• Countries around the world are planning large infrastructure projects, including a planned $1 trillion programme envisioned for America by President Trump – and this will push up demand for steel
• New-generation power storage batteries – including the industry-leading line produced by Tesla – are becoming essential in a world where renewable energy is set to become the norm.

With demand for Manganese set to increase in the near future, manufacturers around the world are on the lookout for suppliers to meet their needs, however the list of countries that mine the metal is surprisingly short.

• A crucial metal found in just a handful of countries

While Manganese is an essential component in industrial applications, the metal is only found in a few countries: Australia, Gabon, Brazil and South Africa.

With a staggering 70% of the world’s Manganese reserves located in the Kalahari desert, South Africa could be in a position to benefit from increased demand and create much-needed jobs and investment in the process.

Is the SA Manganese sector ready to supply foreign customers?

Demand for Manganese is a positive development for the local mining industry – as long as South African miners are able to extract and export the metal.

The local Manganese sector, which was once dominated by a few large players including Samancor, has seen new mining companies formed over the past few years.

It’s also encouraging that smaller-scale companies owned by women and previously disadvantaged South Africans are playing an important role in Manganese mining – but there are a few challenges that need to be overcome.

Taxes pose a threat to new, smaller companies

While new players in the sector may have the skills and capital to compete, one of the biggest obstacles to success has nothing to do with mining techniques – it comes from SARS.

By taxing mining companies on their gross sales (without allowing deductions for transport and handling costs), SARS is planning to collect royalties that may hinder new companies in the Manganese sector.

The future potential for Manganese producers looks bright. The real challenge is making sure that extraction can take place profitably and create employment and investment in South Africa at a time when the country needs it the most.