https://thewest.com.au/business/public-companies/second-export-manganese-shipment-for-element-25-c-3844740

Element 25’s second commercial shipload of about 27,000 tonnes of manganese concentrate produced at its Butcherbird open-cut mining

Element 25 says the beneficiated ore aboard a Handymax-size vessel will be delivered to its offtake partner OM Materials’ smelter in China.

note:

OM Qinzhou – 100% Owned
Location: Guangxi, China
Product: Manganese alloys (SiMn, HCFeMn),
Sinter ore
Furnaces: 1 x 16.5 and 1 x 25.5 MVA furnaces
Capacity: 80-95ktpa of manganese alloys,
300ktpa of Sinter ore


According to an offtake agreement, Element 25 (E25) has sold its first batch of manganese concentrate from the Butcherbird Project to OM Holdings (OMH)
OMH said it would purchase 100 per cent of the manganese ore during the first stage of development, up to 365,000 tonnes annually
The sales apply to manganese ore at a grade of between 30 and 35 per cent
The Butcherbird mine has now moved to a 24-hour processing operation as part of its planned ramp-up activities

https://themarketherald.com.au/element-25-asxe25-sells-first-batch-of-manganese-from-butcherbird-to-om-holdings-asxomh-2021-05-26/

you are welcome.

interview with the OMH GM of Marketing, quite valuable insight
https://www.youtube.com/watch?v=jR23hdYt-ao

again.
from the previous OMH Ceo interview (https://www.bfm.my/podcast?qseaid=&pseaid=6688102&iseaid=all&a...=)

i can feel they are very cautious, due to the nature of their business.
02/09/2021 10:17 AM

“The price of ferrosilicon has been supported by China’s commitment to pivot away from energy intensive industries and setting a target for the reduction of carbon emissions, which had a big impact in major ferroalloy production provinces like Inner Mongolia and Ningxia. With the increase in global infrastructure spending after 2020, there has been stronger global demand for ferrosilicon and silicomanganese, and this has come at a time when supply chains have been disrupted both in India, Malaysia, and other countries due to COVID-19 lockdowns and uncertainties”

27 August 2021
OM Holdings Limited (“OMH” or the “Company”), a vertically integrated manganese ore and ferroalloy producer,

today announced that the Company registered
a 65.5% rise in profit after tax (“PAT”) to A$23.5 million for the half-year ended 30 June 2021 (“1H 2021”)
compared with PAT of A$14.2 million for the half-year ended 30 June 2020 (“1H 2020”).

(conversion 1 Australian Dollar equals 3.04 Malaysian Ringgit 30 Aug, 7:54 am UTC)
A$23.5 Mil ~ 71.47 RM Mil

------------------------------------------------------------------------------
For 1H 2021, OMH recorded a 19.4% rise in earnings before interest, tax, depreciation, and amortization (“EBITDA”) to A$63.4 million compared with EBITDA of A$53.1 million for 1H 2020.

The Company’s basic and diluted earnings per share stood at 2.36 cents for the period under review compared to 1.84 cents for 1H 2020.

(conversion 1 Australian Dollar equals 3.04 Malaysian Ringgit 30 Aug, 7:54 am UTC)
A$63.4 million ~ 192.82 RM Mil

http://www.omholdingsltd.com/wp-content/uploads/2021/08/2021.08.27-Bursa-OMH-Media-Release-Profit-After-Tax-A23.5m-1H-2021.pdf

http://www.omholdingsltd.com/wp-content/uploads/2021/08/2021.08.27-Bursa-OMH-1H-2021-Interim-Financials.pdf

Expanding Capacity
(~Capex A$100-150 mil)

Planned for 2023
• Expected to yield additional
150ktpa of SiMn
• Manganese capacity
expansion with 2 to 4
33MVA-furnaces for
improved efficiency
• Mn smelting expected to
generate highest average
returns over the full price
cycle, and improve hedging
ratio with ore

OM Qinzhou – 100% Owned
Location: Guangxi, China
Product: Manganese alloys (SiMn, HCFeMn),
Sinter ore
Furnaces: 1 x 16.5 and 1 x 25.5 MVA furnaces
Capacity: 80-95ktpa of manganese alloys,
300ktpa of Sinter ore

OM Sarawak – 75% Owned
Location: Sarawak, Malaysia
Product: FeSi, Manganese alloys (SiMn,
HCFeMn), Sinter ore
Furnaces: 16 x 25.5 MVA furnaces
Capacity: 200-210ktpa of FeSi, 250-300ktpa of
manganese alloys, 250ktpa of Sinter ore
75% owned, J/V with Cahya Mata Sarawak Berhad, a leading
industrial conglomerate listed on Bursa Malaysia

FUTURE PLANS AND GROWTH

Higher Value Add
(~Capex A$30 mil)
• Conversion to metallic
silicon to produce higher
value added products
• Diversify into
aluminium, chemicals,
and solar downstream
industries
• Furnaces still able to
produce ferrosilicon for
added flexibility

The Group’s total borrowings decreased from A$415.0 million as at 31 December 2020 to
A$398.6 million as at 30 June 2021. The decrease was mainly attributed to the full redemption
of the balance of 12.5 million unsecured convertible notes of approximately A$13.9 million in
March 2021 and repayments of the Sarawak Project Finance loans during the 6 month period
ended 30 June 2021 of approximately US$9.6 million (equivalent to approximately A$12.7
million). This was partially offset by an increase of approximately A$5.1 million in trade facilities
utilised as at 30 June 2021. The Group’s total borrowings to equity ratio decreased from 0.89
times as at 31 December 2020 to 0.79 times as at 30 June 2021

as of 5 AUg 2021

BUY
(Maintained)
Share Price RM2.55
Target Price RM3.27
Upside +28.2%

COMPANY DESCRIPTION
ASX-listed OM Holdings is an integrated
manganese player engaged in the mining,
smelting, trading and marketing of manganese
ores, manganese alloys and ferrosilicon. Its
smelting plants in Sarawak operate using lowcost sustainable energy − hydropower.


STOCK DATA
GICS sector Materials
Bloomberg ticker: OMH MK
Shares issued (m): 736.7
Market cap (RMm): 1,898.3
Market cap (US$m): 449.8
3-mth avg daily t'over (US$m): n.a.
Price Performance (%)
52-week high/low RM4.03/RM2.53
1mth 3mth 6mth 1yr YTD
(10.1) (10.1) 9.6 150.0 45.5

Major Shareholders %
Huang Gang 14.0
Amplewood Resourced Ltd 13.6
Low Ngee Tong 9.2
FY21 NAV/Share (RM) 2.0
FY21 Net Cash/Share (RM) (1.3)

Source: Bloomberg
ANALYST(S)
Hazmy Hazin
+603 2147 1934
noorhazmy@uobkayhian.com

STOCK IMPACT
• Smelting (Malaysia). The production volumes of FeSi and Mn alloy fell to 23,057mt (-40.0%
qoq, -47.8% yoy) and 37,691mt (-34.0% qoq, -34.7% yoy) respectively. The decline is within
expectation due to the 5-week temporary suspension of smelters in Sarawak, which started
from 28 May after active COVID-19 cases were detected at the premise. This brought 1H21
production volumes of FeSi and Mn alloy to 61,472mt and 94,827mt respectively, forming
about 53.5% and 55.8% of our full-year forecast. As OMH has gradually ramped up
production post-lockdown with 12 furnaces operating as of today, we can expect higher
production output in the quarters ahead. Despite the challenging operating environment, we
believe the drop in production this year will be partially mitigated by the lofty ferroalloy prices.

• Mining (Australia). The production volume of Mn ores was 203,791mt in 2Q21, down by
14.6% qoq, mainly due to the mining of ores from deeper pits and exposure to substantial
groundwater. However, the production is still higher by 7.9% yoy. This brought 1H21
production volume to 414,549mt, forming about 41.5% of our full-year forecast. For 2H21, we
believe OMH will boost production as its last mile strategy since the company indicated that
Bootu’s mining operations will be concluded end-21 as the reserve life is coming to an end.
From 2022 onwards, OMH will obtain its Mn ore supply from E25 for 365,000mt/year and
another 250,000mt/year from its Ultra Fines Plant (UFP). Production will be further
strengthened once its mining exploration with other mining companies bears fruit in the
coming years.

• China and South Africa operations remain intact. The production volume in South Africa
(Mn ore) in 2Q21 rose to 814,419mt (2.4% qoq, 54.4% yoy). The yoy jump in China was mainly
due to the nationwide lockdown in the country, which resulted in fewer exports in 2Q20. This
brought 1H21 production volume to 1,609,879mt, forming about 45.6% of our full-year forecast.
While in China (Mn alloy), output jumped to 16,087mt (87.7% qoq, >100% yoy) as production
was successfully ramped up with two furnaces in full production in 2Q21. This brought 1H21
production volumes to 24,684mt. Note that OM Qinzhou (OMQ) has just upgraded its furnaces
and will have a capacity of 80,000-95,000mt of Mn alloys p.a. moving forward.

• Mining exploration progressing well. Last month, OMH increased its stake in its JV with
Bryah Resources, from 48% to 51% by committing another A$500k (so far it has spent
A$1.5m) to be used for resource and reconnaissance drilling, mineral resource estimation
and beneficiation testwork at its mining exploration in Bryah Basin (central Western
Australia). This further signifies that the exploration is showing positive results and can
potentially increase OMH’s manganese supply in the near future. However, OMH mentioned
that it’s still too early to indicate the target production as it is still in the exploration stage,
which is why we have not factored in our valuation yet. Approximate completion date is in 2-3
years’ time.

• Leveraging on growing demand for steel. Ore and alloy outlook move in tandem with the
steel industry as they are considered the primary inputs in steel manufacturing with no
comparable substitute. According to International Manganese Institute (IMnI), world crude
steel production during April and May 21 was 353.5m mt, up 21.3% yoy, indicating a strong
rebound from the low base numbers in 2020. As at 2 August, hot rolled coil prices rose 54%
yoy (to RM3,849/mt) while bar prices rose 46% yoy (to RM3,589/mt). Even with potential
curbs by China, we believe steel supply-demand dynamics should remain favourable to
support lofty prices in the long term, albeit not at the current high. Based on China’s official
index compiler CFLP Steel Logistics Professional Committee, China’s steel demand may
pick up in August, while steel mills may cut down on their output, which will further support
steel prices.

OM Holdings (OMH MK)

On Track For Recovery
OMH’s production output for 2Q21 is in line with our expectation given the temporary
operational halt in June. We believe the company is on track for recovery on the back of
the upswing in commodity prices, amid strong demand due to economic reopening and
structural supply shortage caused by the global decarbonisation trend. It is a major
recovery play in 2022, as production will recover once the lockdown is lifted. Maintain
BUY with a target price of RM3.27.

WHAT’S NEW
• Expect gradual recovery in quarters ahead. After the 5-week temporary suspension, OM
Sarawak was granted approval on 5 July to resume operations under strict SOPs with
additional COVID-19 precautionary measures in place. Operations have recommenced with
an initial four furnaces in early-July. Production has subsequently ramped up in stages, with
12 out of 16 furnaces (six FeSi and six Mn alloy) currently in production. The remaining four
furnaces are still idle and will only be restarted once manpower constraints have been
alleviated. This is within our expectation as we believe OM Holdings (OMH) will continue to
run with 12 furnaces for the remaining of the year and we expect the borders to be fully
reopened in 2022.

• Commodity prices continue to rally. In 2Q21, ferrosilicon (FeSi) and manganese (Mn)
alloy prices jumped higher to US$1,920/mt (32.0% qoq, 87.3% yoy) and US$1,545/mt
(20.7% qoq, 49.5% yoy) respectively. This was mainly due to the supply shortages caused
by stricter emissions policies in China and temporary disruptions in India and at OM
Sarawak during the quarter amid strong global demand.

• Firm prices in the long run. We believe the prices may have peaked and will gradually
ease in 2H21 on the back of supply recovery and China’s plan to limit the soaring commodity
prices. However, in the long run, we believe prices will remain firm, albeit not at the current
high, as the global supply cannot catch up with the increasing demand. Hence, we maintain
our conservative FeSi and Mn alloy ASP assumptions of US$1,500/US$1,300/US$1,250
and US$1,400/US$1,200/US$1,150 per mt for 2021-23 respectively.

• New supply of Mn ores secured. After 14 months of pre-feasibility study, Element 25 (E25)
has completed its first shipment of Mn concentrate (27,000mt) from its Butcherbird
Manganese Project in Western Australia to OMH. Note that Butcherbird is Australia's largest
onshore manganese resource. Currently, Butcherbird hosts 263m mt of resource, grading at
10% for 20.8m mt of contained manganese. E25 expects to produce 365,000 mt/year of Mn
concentrate over a 40-year mine life, with an offtake agreement with OMH for the first five
years. This development is in line with our expectation that OMH is able to ensure a
sustainable supply of Mn ores moving forward

UOBKH_OM-Holdings-Activity-Update-Report-Q2FY21

http://www.omholdingsltd.com/wp-content/uploads/2021/08/2021.08.05-UOBKH_OM-Holdings-Activity-Update-Report-Q2FY21.pdf

Key risks
Prolonged operational disruptions. Given OMH’s reliance on OMS as a key earnings
driver, a longer-than-expected suspension of operations due to recurring COVID-19 positive
cases amongst employees, persisting labour movement restrictions, and/or delays in
vaccinations may impact the group’s performance beyond 1H21. This may also hold back
OMS’ plant upgrading works due to the need for foreign contractors to kick-start the
commissioning of its manganese alloy furnace conversions

https://www.omholdingsltd.com/wp-content/uploads/2021/06/2021.06.21-RHB_OM-Holdings-RHB-Research-Secondary-Listing.pdf

https://www.omholdingsltd.com/wp-content/uploads/2021/07/2021.06.29-Euroz-Report_Re-initiation-of-Coverage.pdf

mining = reserve
reserve = exploration x quality of mineral x volume

got reserve then only u can process.

pg9/4.
http://www.omholdingsltd.com/wp-content/uploads/2021/06/20210609-OMH-Investor-Presentation-June-2021-Analyst-Briefing-For-Lodging.pdf

agree on the Hydro power part, though ore cost remain small part, but no ore, the rest is bull shit.
which is why securing mineral source at sustainable cost is the most important in this business.

limit up too soon = become speculation.

OMH is not PMETAL, at least not yet, cannot compare.

sold my position, left profit to run.

https://www.bryah.com.au/site/projects/bryah-basin-project
Manganese Joint Venture
In April 2019 Bryah Resources Limited announced the execution of a manganese Farm-In and Joint Venture Agreement (Agreement) with OM (Manganese) Limited (OMM), a wholly owned subsidiary of ASX-listed OM Holdings Limited (ASX:OMH).

OM Holdings Limited is a vertically integrated Manganese and Silicon specialist involved in mining, smelting and trading, with operations located in Australia, China, Japan, Malaysia, Singapore and South Africa. In Australia, OMM operates the Bootu Creek manganese mine in the Northern Territory which is due to cease open pit mining operations in 2021.

The Agreement applies to approximately 660km2 of the Company’s Bryah Basin Project in central Western Australia, including the historic Horseshoe South Manganese Mine.

Between April and August 2019, OMM funded $500,000 of project expenditure which yielded highly encouraging manganese drilling results. In August 2019, OMM secured an initial 10% interest in the Manganese Joint Venture (“JV”), following payment of a $250,000 Exercise Fee.

Under Stage 2 of the Agreement, OMM can elect to progressively fund the next $2.0 million of exploration expenditure in four tranches of $500,000 each, to earn up to a 51% interest in the Manganese JV by 30 June 2022.

In June 2020, pursuant to the terms of the Agreement, OMM completed funding $500,000 in project expenditure under Tranche 1, to increase its initial JV interest from 10% to 20%. OMM has formally elected to increase its JV interest to 30% under Tranche 2, funding an additional $500,000 of project expenditure.

Bryah may elect for OMM to fund the next $1.8 million of project expenditure for OMM to earn a 60% Joint Venture Interest. Thereafter Bryah may elect for OMM to fund an additional $2.5 million of project expenditure for OMM to earn a 70% Joint Venture Interest.

The aim of the JV is to explore for commercially mineable manganese and carry out Feasibility Studies. If a positive Feasibility Study is supported by a Decision to Mine, then OMM and Bryah may elect to participate in a Mining Joint Venture in proportion to their JV interests or convert to a Royalty. Bryah is to negotiate a Sales Agency Agreement on commercial terms with OM Holdings Ltd in respect to all manganese ore production under the Mining JV.

The JV includes an area of Mutual Interest which extends for a radius of 100 kilometres from the Horseshoe South Manganese Mine (M52/806).

BYH: OMH to Increase Manganese JV Interest to 51%
https://www.asx.com.au/asxpdf/20210624/pdf/44xn727wrzfxtk.pdf

limit up >.<

http://www.omholdingsltd.com/wp-content/uploads/2021/06/20210609-OMH-Investor-Presentation-June-2021-Analyst-Briefing-For-Lodging.pdf

OPERATIONS
The outbreak of the COVID-19 pandemic has negatively affected general economic activity globally. The Malaysian Government has implemented various lockdown measures of varying degrees in order to prevent the spread of COVID-19.

These measures continue to be
reviewed from time to time. As of January 2021, a new lockdown measure (“Movement Control Order 2.0”) was reintroduced following the resurgence of COVID-19 cases in Malaysia.

The country’s border remains closed to date with strict travel restrictions imposed.

During the year, OM Sarawak experienced manpower constraints as a result of the closure of international borders and the restrictions on applications for new permits to hire foreign skilled workers. The lack of skilled manpower impacted the Plant’s ability to operate at
full capacity.

Consequently, 12 out of 16 furnaces were in operation with six furnaces producing ferrosilicon and six furnaces producing manganese alloys.

Of the remaining four ferrosilicon furnaces, two had been idled for the purposes of conversion to produce manganese alloys, with the other two furnaces placed on care and maintenance.

Applications and recruitment of foreign skilled and semi-skilled workers are ongoing. As a long term strategy to localise the workforce, OM Sarawak has been progressively increasing its local workforce contribution through on-the-job training programs especially in smelting
operations.

Trained apprentices will work under the supervision of skilled operators to ensure full competency, however this may not be able to alleviate the immediate manpower shortage issues.

Annual production of 167,443 tonnes of ferrosilicon and 227,406 tonnes of manganese alloys, which comprised silicomanganese and high carbon ferromanganese were achieved during the year 2020.

Ferrosilicon production reduced by 27.4% or 63,292 tonnes as compared to 2019
due to reduced production capacity due to the idling of the 4 ferrosilicon furnaces. Manganese alloys production volume decreased by 8.3% or 20,757 tonnes mainly attributed to the changes in the product mix.

Export volumes for ferrosilicon and manganese alloys dropped by approximately 22% or 48,326 tonnes and 3.8% or 9,151 tonnes respectively due to weaker global demand for ferroalloys as well as the downturn in global economic activities arising from the COVID-19 pandemic.

OM Sarawak benefits from competitively priced and reliable hydropower, direct access to a dedicated port facility, geographical proximity to both raw material sources and East and South East Asian steel mills, tax incentives, and the absence of duties common in alloy markets.

In 2021, OM Sarawak will focus on bringing all idled furnaces back into full production, including the commissioning of the ferrosilicon furnaces that are currently undergoing conversion to produce manganese alloys.

While the expansion project to produce metallic silicon was delayed to conserve capital, the Company has put an emphasis on increasing manganese smelting capacity through the construction of two new 33 MVA manganese furnaces as part of its long term growth strategy.

http://www.omholdingsltd.com/wp-content/uploads/2021/04/OM-AR2020-Low-res.pdf

pg12

OM Materials (Sarawak) Sdn Bhd (“OM Sarawak”) and OM
Materials (Samalaju) Sdn Bhd (“OM Samalaju”), both 75:25 joint
ventures between OMH and Cahya Mata Sarawak Berhad (“CMSB”),
a conglomerate listed on the Main Market of Bursa Malaysia, is the
owner of the Ferroalloy Smelting Project in Sarawak, Malaysia (the
“Plant”).

The Plant consists of 8 main workshops with a total of
16 units of 25.5 MVA furnaces, of which 10 furnaces are allocated
for the production of ferrosilicon and 6 units have been modified
to produce manganese alloys.

The Plant has a design production
capacity of 200,000 to 210,000 tonnes of ferrosilicon and 250,000
to 300,000 tonnes of manganese alloys per annum. The Plant also
consists of a sinter plant that has a design capacity to produce
250,000 tonnes of sinter ore per annum.

The handover phase for the expansion projects commenced in 2019
and included sheltered warehouses, sinter plant and a laboratory
with all completed in 2020. Hot commissioning and performance
testing of the sinter plant commenced in early October 2020. The
prolonged COVID-19 pandemic and continued global travel
restrictions imposed had consequently limited contractors’
activities for the onsite commissioning of the sinter plant, which
resulted in a longer than expected commissioning and performance
testing period. Full commercial production of sintered manganese
ore was originally targeted to commence in 1H 2021, but may be
deferred subject to final acceptance of equipment condition.

To align with long-term trends in the ferroalloy market and to
generate the highest return per furnace over the full price cycle,
the Company decided to convert two idled ferrosilicon furnaces to
produce manganese alloys during Q4 2020. Contracts were awarded
and the equipment was shipped out from China in December
2020. Equipment and machineries installation works originally
scheduled for late Q1 2021 has been deferred to commence in
Q3 2021, pending contractors entering Sarawak for equipment
installation and performance testing. Meanwhile, excavation works
for the two furnace linings were completed in Q1 2021 with civil
works currently in progress.

OM Holdings Limited is an integrated manganese and silicon company. We are engaged in the business of mining and trading raw ores, as well as the smelting and marketing of processed ferroalloys.

With an established history of over 20 years in the industry, OMH are listed on the ASX and capture value across the entire process chain through operations in Australia, China, Japan, Malaysia, Singapore, and South Africa.

Our latest project is a greenfield smelter complex in Sarawak, which successfully commenced production in 2014.

Today, the Group is one of the world’s leading suppliers of manganese ores and ferroalloys, and seeks to be the main ferroalloy supply partner to major steel mills and other industries.

Through our global trading network, we distribute products from our Asia- pacific base to customers around the world.