Georgian Manganese Halts Silico-Manganese Production Amid Market Decline and Protests

Georgian Manganese

Georgian Manganese, a leading producer of silico-manganese based in Georgia, has announced a suspension of its silico-manganese production for four months. This decision follows a prolonged decline in global demand for ferro-alloys and the resulting fall in prices. The suspension, which began on October 2, will continue through March 1, 2024, at the company's processing plant in Zestafoni, Georgia. The company confirmed the shutdown through a post on social media, citing market conditions and ongoing operational challenges.

Market Conditions and Operational Challenges

Georgian Manganese has faced a steady downturn in the silico-manganese market for the past two years, with prices continuing to soften. As a result, the company ceased sales to its primary market, the United States, in September. The market slump, coupled with protests at the company’s mining operations in Chiatura, Georgia, has made it increasingly difficult to maintain production levels.

Protests at the Chiatura mine, which accounts for a significant portion of Georgian Manganese's manganese ore supply, have worsened since March. Local picketing activities have caused a 70% decrease in production at the mine, further compounding supply issues. As a result, Chiatura Management, the contractor responsible for the mine, has been unable to ensure a consistent feedstock supply to the Zestafoni plant, prompting the decision to halt production.

Despite these setbacks, Georgian Manganese remains hopeful that market conditions will improve and the company can resume operations ahead of schedule. A crisis management plan is being developed to address the ongoing issues at the mine, with an emphasis on stabilizing the supply of manganese ore and improving overall operational efficiency.

The Importance of Georgian Manganese in the US Market

Historically, Georgia has been a significant supplier of silico-manganese to the United States. In the period from 2019 to 2023, Georgia accounted for 24% of the US’s silico-manganese imports, amounting to 415,182 metric tonnes. This year, the country has already shipped 60,253 tonnes of the 254,771 tonnes of silico-manganese imported by the US up until the end of August.

Georgian Manganese is owned by Florida-based Georgian American Alloys, which also owns Feldman Trading. Through this subsidiary, Georgian American Alloys markets its products in the US. The company also owns CC Metals and Alloys, previously a ferro-silicon producer in Kentucky, and Feldman Production, which manufactures silico-manganese and high-carbon ferro-manganese in West Virginia.