PURE SPECULATION: Robin Bromby | August 31, 2009 Article from:...

PURE SPECULATION: Robin Bromby | August 31, 2009
Article from: The Australian.

Manganese prices soar.

ONE of the assets that no doubt tempted Baosteel to take a slice of iron ore and coal play Aquila Resources (AQA) on Friday was the latter's manganese project in South Africa. Interest in this metal has ebbed with the downturn in steel production around the world, but prices have been creeping up.

One report from London says prices of the untraded metal have increased by 35 per cent this month as steelmakers start to think about increasing production. The one thing to remember about manganese is that there is no substitute for this steel additive -- and not all that many big mines.

Singapore-based but locally listed OM Holdings (OMH) has had one of Australia's most successful manganese stories at Bootu Creek in the Northern Territory. Largely lost in the deluge that is the half-yearly reporting season was the decision by OMH to spend $2m farming into the Waddikee project owned by Monax Mining (MOX).

This is a big vote of confidence in the junior. It's also another boost for South Australia's Eyre Peninsula, which has gone, in the space of just a few years, from mineral backwater to one of the most sought-after locations. MOX's deposit is just 55km west of the three big iron ore mines operated by OneSteel (OST) and 45km from the Wilgerup iron ore project owned by Centrex Metals (CXM). On Thursday, Centrex announced it had signed a five-year sales agreement with Baotou Iron & Steel.

MOX is about to get a new managing director in Gary Ferris, formerly of InterMet Resources (ITT). Ferris is expected to bring a new wave of energy to Monax.