Datt Capital says Cyclone Megan’s impact on GEMCO will tighten manganese supply, creating growth opportunities for producers like Jupiter Mines.
~ 1 min. read
By: Datt Capital
April 22, 2024: Emanuel Datt, Chief Investment Officer at Datt Capital notes “GEMCO is a globally significant manganese production asset, providing around 12% of the global manganese ore market production or 15% of ‘contained’ manganese production. GEMCO supplies approximately half of the high specification manganese (44% Mn) market.
“GEMCO is majority owned by ASX listed South32 (ASX: S32) and was recently hit by Tropical Cyclone Megan with significant damage to port, shipping and logistical infrastructure, as well as damage to the mine itself. This has led to rising costs.
“S32 have provided a preliminary update on GEMCO today, guiding that export production will not recommence for 12 months in a material manner.
“We anticipate that this preliminary timeframe estimate for reinstatement may be at risk due to the remote location, insurance claims and other frictional elements that may be required to reinstate the export infrastructure.
“This also means that the manganese market will be in a state of structural supply deficit until GEMCO operations recommence.
“This dynamic will favour existing producers. Our preferred exposure is ASX listed Jupiter Mines (ASX: JMS), which holds the majority share of a long-life, low-cost Tsipi mine in South Africa, and will benefit from the expected rise in manganese ore prices in the coming months.”
Founded in 2016, Datt Capital is a Melbourne-based Australian focused Long-only Fund Manager. Datt Capital is focused on generating alpha by structuring its portfolio in a unique and uncorrelated manner, across asset classes. Its investments consist primarily of listed equity, debt and derivatives solely in Australian markets.
Datt Capital's investment approach focuses on finding companies with strategic value where it may be able to use ‘collaborative activism’ techniques to realise alpha and companies run by focused, prudent and experienced management teams.
Download PDF: A cyclone that disrupted the manganese market, offers growth opportunity for other players
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Datt Capital Pty Ltd
ABN 37 124 330 865
AFSL 542100
390 St Kilda Rd, Melbourne VIC 3004
© COPYRIGHT 2025. ALL RIGHTS RESERVED.
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