If there was ANY doubt about the manganese ore bubble, it disappeared this week. All of a sudden, I received way too many calls telling me about “promising” manganese deposits that could quickly come onsteam and be profitable right away. This is in addition to the countless number of small miners who are already counting their profits from future sales. For the record, I would never recommend a manganese mine for any of my financial clients.
It will only take a couple of more days before I hear projections that manganese ore prices will hit $15 per mtu within months. Probably as soon as $200 per barrel oil is reached.
Professionals, however, are getting nervous. Assuming you buy South African manganese ore at $7.50 per mtu and find a “willing” buy in China, as much as two months can elapse. However, the ore buyer has to pay the miner now while the Chinese buyer, well he is a Chinese buyer. Too many times in the past has an ore shipment been rejected by the buyer as being out of spec which leaves the poor seller, well poor.