Chrome & Manganese Update: Power Costs Idle SA Smelters as Chrome Departures Drop

Power costs keep most of South Africa's ferrochrome smelters cold, even as the country holds more than 70% of the world's known chrome reserves. Global chrome ore departures fell by about 41% last week, with Richards Bay volumes down almost 70%, while China's port stocks eased slightly. On the manganese side, South32 lifted South African output in the September quarter but sold less as it cut costly trucking, and China's manganese ore imports rebounded in September. Dry bulk freight broke a ten-day losing streak. Here is what buyers, sellers and investors need to know.

Power Costs Keep South Africa's Ferrochrome Smelters Idle

Fewer than 12 of South Africa's 66 ferrochrome smelters are operating, according to a Reuters analysis of Africa's push to process more minerals at home (Mining Weekly / Reuters). The main cause of the closures was a roughly tenfold rise in power costs since 2008, which made South African ferroalloys uncompetitive with China. China is now the largest ferrochrome producer, having built processing capacity and the cheap power to run it, even though South Africa holds over 70% of known chrome reserves.

"The number one lesson is how important energy supply reliability and affordability are to industrialisation," said Mzila Mthenjane, CEO of the Minerals Council South Africa. Speaking about China, he added: "Now we have to compete with that" (Mining Weekly / Reuters). Other speakers listed what investors want before funding processing plants: reliable feedstock, power, stable policy and committed buyers, plus access to capital for projects that cost billions of dollars.

SMM drew the same conclusion: expanding local processing needs more than access to ore. It also needs competitive energy, stable policy, financing and dependable buyers. For now, this means South African chrome continues to leave the country mostly as ore.

Chrome Ore Departures Drop 41% as Richards Bay Volumes Slump

Global chrome ore departures from major export ports totalled 502,700 t in the week ended 16 October, down 40.78% from 849,100 t the week before (SMM). Maputo remained the main corridor at 395,100 t, down 8.66% and about 78.6% of the total. Richards Bay fell 69.62% to 82,000 t from 270,600 t, Turkey's Mersin dropped 84.13% to 17,700 t, and Beira shipments stopped entirely after 34,400 t the previous week.

China's chrome ore port inventory edged down 24,600 t (0.49%) to 4.9712 Mt as of 16 October. Tianjin, which holds about 88.5% of the total, fell 0.47% to 4.3985 Mt, and Qinzhou plus Fangchenggang slipped 1.02% to 377,700 t (SMM). Stocks remain close to 5 Mt, so the drop in shipments has not yet tightened supply in China.

On the supply side, Tharisa and Valterra Platinum are exploring the recovery of fine chrome from Valterra's processing streams using Tharisa's Vulcan X technology. A pilot plant is complete and testing is under way, but no commercial volume or start date has been announced (SMM).

South32 Lifts SA Manganese Output, Sales Fall as Trucking Is Cut

South32's South African manganese operations produced 588,000 t of saleable ore in the September quarter, up 11% on the June quarter and 7% year on year, helped by better underground productivity at Wessels. Sales fell 22% quarter on quarter to 460,000 t as the company cut trucked volumes because of market conditions, and one shipment slipped into the December quarter. FY2027 guidance of 2 Mt was kept. Higher trucking and diesel costs, with rail capacity constrained, weigh on producers' margins (Miningmx). Australian manganese output rose 15% to 902,000 t, and South32's share of total manganese ore output rose 14% quarter on quarter (Mysteel).

In China, manganese ore imports rose 9.55% month on month to 2.8114 Mt in September but were 8.86% lower year on year. Imports from South Africa fell 18.55% to 1.3864 Mt, while Australia rose 26.11% to 453,700 t, Gabon 24.49% to 393,500 t and Ghana roughly doubled to 399,300 t (SMM). SMM calls the rebound a "false boom": silicomanganese margins are squeezed, port stocks remain above 5.9 Mt, and Q4 could bring slow destocking and flat ore prices. Mysteel reported that USD manganese ore prices held steady this week, as miners raised offers on higher costs but traders were reluctant to accept them (Mysteel).

Pricing Snapshot

Commodity/Item	Grade / basis	Price	Date
Silicomanganese	China national 6517, incl. 13% VAT (Mysteel)	Yuan 5,672/t (about US$848/t), −Yuan 3 w/w	16 Oct (published 19 Oct)
Silicomanganese futures	Zhengzhou, Jan 2027 contract	Yuan 5,816/t, −Yuan 40 vs 9 Oct	16 Oct close (published 19 Oct)
Imported manganese ore	China, USD-denominated offers	Steady w/w; miners seeking higher offers	20 Oct
Chrome ore port inventory	China, all ports	4.9712 Mt (−0.49% w/w)	16 Oct (published 19 Oct)
Manganese ore imports	China, September	2.8114 Mt (+9.55% m/m, −8.86% y/y)	Published 20 Oct
Baltic Dry Index	Main index	2,593 (+47)	20 Oct
Baltic Dry Index	Main index	2,546 (+1.39%)	19 Oct
Baltic Capesize Index	Index / average daily earnings	3,365 (+3.57%) / US$27,015	19 Oct
Baltic Panamax Index	Index / average daily earnings	2,286 (−1.21%) / US$20,573	19 Oct
Baltic Supramax Index	Index	1,868 (+0.16%)	19 Oct
Bunker fuel	Durban VLSFO / LSMGO / HSFO, daily change	+US$5/t / +US$9/t / −US$5/t	20 Oct, 09:00 GMT
Brent crude	ICE front month	US$111.41/bbl (+US$2.90)	20 Oct, 09:00 GMT

Sources: Mysteel, Mysteel, SMM, SMM, Hellenic Shipping News, Baird Maritime, ENGINE. Fresh chrome ore and ferrochrome spot prices from SMM and Mysteel were not publicly available in the last 48 hours, so we have not repeated older assessments. Mysteel's manganese ore and silicomanganese detail is paywalled; only the published summary figures are shown. Durban bunker figures are daily changes, not absolute prices.

Logistics and Regulatory Highlights

Freight. The Baltic Dry Index ended a ten-day slide on 19 October, rising 35 points to 2,546 as the Capesize index gained 3.57% to 3,365 and average Capesize earnings rose US$1,054 to US$27,015/day. Panamax eased to 2,286 and Supramax edged up to 1,868 (Baird Maritime). The index rose again on 20 October, up 47 points to 2,593 (Hellenic Shipping News).

Fuel. Durban VLSFO rose US$5/t and LSMGO US$9/t on 20 October, while HSFO eased US$5/t. Brent rose US$2.90 to US$111.41/bbl (ENGINE). President Ramaphosa said government is considering further measures against high fuel prices but announced no specific relief (Daily Maverick). This matters for manganese producers that still truck ore.

Rail and ports. Transnet is running an R8.9 billion modernisation programme to 2030 on the 861 km Sishen–Saldanha line, which carries iron ore and manganese exports. About R2.2 billion will be spent this financial year, and Transnet National Ports Authority is spending R750 million on an electrical upgrade at Saldanha to power a third tippler. Licensed capacity is 60 Mt/y, and Transnet is seeking approval to raise it to 67 Mt/y (Railway Gazette). For chrome, Richards Bay and Beira departures fell sharply last week while Maputo held up (SMM).

Policy. Ramaphosa told South Africans to prepare for possible removal from AGOA, the US duty-free trade programme. He said the impact would be "devastating" and that the country would look for alternative markets. Congress has approved keeping South Africa in AGOA, but the decision now rests with the US executive. A removal needs 60 days' notice, so an exclusion taking effect on 1 January would have to be announced by 2 November (ECR / AFP). We found no new export taxes, bans, CBAM or mining law changes affecting chrome or manganese in the last 48 hours.

What This Means for African Exporters

Chrome sellers: With most local smelters idle, ore exports remain the main route to market. Chinese port stocks are still near 5 Mt, so last week's fall in departures is unlikely to lift prices on its own. Watch whether Richards Bay volumes recover this week.
Manganese sellers: South African ore lost share in China in September as Australian, Gabonese and Ghanaian supply rose. With port stocks above 5.9 Mt and silicomanganese margins squeezed, focus on cost control and rail access rather than counting on a price lift.
Buyers: High Chinese inventories of both chrome and manganese ore give buyers room to negotiate. Capesize rates have started to rebound, so lock in freight early if you need large parcels.
Investors: Energy cost remains the key test for any new African smelter. Also watch the AGOA decision before 2 November, the Sishen–Saldanha capacity upgrade and the Tharisa–Valterra fine chrome trial.

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