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ADU PReVIeW

Jupiter shoots

for the stars

fresh approach to both growth and mar- “Jupiter can become relevant in manga- low expectations due to line issues while port
A keting could turn Jupiter Mines Ltd into nese through consolidation and adding more authorities struggle to maintain capacity.
one of the most exciting African stories on the value,” Murray explained. “We have a 100- Murray said logistics were the biggest im-
ASX. year mine life in the largest manganese re- pediment to growth.
Jupiter has felt like a forgotten anomaly gion in the world as a base.” “Transnet is underdelivering by 20-30%,
since listing on the Australian bourse in 2018 The launch of the new strategy will coincide meaning we are forced to make it up through
with its cornerstone asset of a 49% holding in with the appointment of a new managing di- trucking,” he said. “So, we can increase pro-
the Tshipi manganese mine in the Northern rector, expected to be in place by Africa Down duction but that will be a high-cost solution.”
Cape, South Africa. The company appeared Under. Consolidation with other manganese op-
content to share profits from the mine with its “We have a preferential contract and we erations in the region would allow Jupiter to
shareholders without offering too much in a are working through the final contract terms. grow its capacity.
way of growth. We’re optimistic he will be in place before “Instead of being 10% of Transnet on the
However, with well-known resources exec- ADU,” Murray said. “The strategy then comes railway, we could end up with 40% capacity,”
utive Ian Murray now on board as chairman, second. Even though Blind Freddy can see Murray said. “By getting bigger, we would be
the company is preparing to announce an what it should be, it needs to be the new MD able to have conversations with Government
ambitious strategy which could see it become who articulates it and delivers on it.” and Transnet to improve our rail capacity.”
a major player in several emerging commodi- The potential options for consolidation are
ties. numerous. South32 Ltd and Anglo American
Tshipi gives it a very solid base. The mine plc are the largest players in the Kalahari Ba-
has been producing more than 3 mtpa of sin and are joined by several smaller plays.
manganese ore for more than four years, “Tshipi is on the boundary of South32’s
having started operations in October 2012. operation and there are four or five other
Jupiter’s May quarterly report highlighted operations within 100km of us,” Murray said.
just how valuable those rates can be with “We would like to get ourselves into a position
883,384t sold at an average cash cost of where we can use our paper to pick up 100%,
$US1.82/dmtu and 755,600t sold at an av- or stakes in these assets.
erage $US3.56/dmtu, delivering EBITDA of “There is definitely money to be made
$58.9 million and NPAT of $38.5 million. through consolidation. We see the opportuni-
While the mine’s 100-year lifespan would ty but need to work out what the order of play
allow that performance to continue for dec- should be. We know what Step 1 is, but what
ades to come, Murray’s arrival signals a new about Step 2, 3 and 4?”
approach from Jupiter. Ian Murray Although delighted with the performance of
“The previous strategy was to pass on the Tshipi – an achievement he credits to the local
dividends we received from the South African South African company – Murray sees sense
company directly onto our shareholders with The most obvious starting point for consoli- in deploying a diversification strategy as well,
minimal dilution,” Murray told Paydirt. “But we dation would appear to be Tshipi itself. Jupi- given the often-difficult operational climate in
sit on a world-class asset in the most impor- ter controls 49.9% of the operating company South Africa and manganese’s growing repu-
tant manganese region in the world and we Tshipi e Ntle Manganese Mining, with the tation as a battery mineral.
have begun asking ourselves what we can remaining 50.1% held by black economic em- “South Africa can be a challenging juris-
do in regard to consolidation and growth to powerment (BEE) group Ntsimbintle Mining diction, but the board and management in-
become a relevant player in the international Ltd, which is also Jupiter’s largest sharehold- country are doing a fantastic job in finding
manganese sector.” er. A structured merger could deliver 100% proactive solutions to the challenges that are
For Murray, the global conditions couldn’t ownership under the Jupiter banner while en- thrown at us and the workforce is dedicated
be more suited to ambitious companies look- suring both the company and project remain with no labour issues,” he said. “This asset
ing for expansion with the metal’s traditional BEE-compliant. The cleaner framework is is in the lowest cost quartile so it will make
markets set to be joined by new sectors in the likely to be welcomed in an Australian market money through all cycles but as an ASX-list-
coming decade. often wary of convoluted ownership structure. ed company, there are compelling reasons to
“Manganese has always been linked to Outside the immediate operation, Jupiter diversify into other EV commodities and out-
stainless steel and the EV space is a new has its eye on regional consolidation, but the side South Africa as well; whether the rest of
one for manganese,” he said. “Most people task is about more than finding more tonnes. Africa or elsewhere, including Australia.
don’t realise that 1% of manganese currently “We already have potential to grow output “Look at how successful IGO [Ltd] has
goes into EVs but that will grow to 10%, above from Tshipi but the challenge is getting prod- been with its diversification strategy. Given
any future stainless steel demand, as the EV uct to customers through existing rail and port we have this world-class asset, we can use it
revolution gathers pace.” infrastructure,” Murray said. to add others in the EV space.”
Jupiter has aspirations to catch that market South Africa has been crippled by a series – Dominic Piper
uplift but it will need the assets and the logis- of infrastructure problems with the onset of
tics to do so. The plan is to use Tshipi as a the pandemic only accelerating issues. State
springboard for those ambitions. rail provider Transnet is running 20-30% be-

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