Are investors overlooking the ASX’s largest Manganese miner?

Jupiter Mines (ASX:JMS) is the largest manganese miner on the ASX, but you’d be forgiven for not knowing who they are. 

In a fairly unpopulated room at the Pan Pacific in Perth, management outlined the benefits of the company’s South African Tshipi Borwa manganese mine; the fourth largest in the world. 

Where investors may be overlooking Jupiter is in the arguable general oversight of manganese stocks by retail investors across the board. 

What’s so good about manganese?

The same reasons driving enthusiasm for lithium, graphite, copper, nickel, and silver, are also playing out in manganese exploration markets. 

In short: the metal is another basic material modern EV battery manufacturers require to make electric cars with performance specs good enough to persuade buyers away from internal combustion vehicles. 

Manganese is also a valuable alloy for steelmakers. While pricing for the metal is somewhat opaque, Chinese metal market information provider SMM notes prices at many benchmarks sit above US$2,000 a tonne. 

This reflects a tenfold increase for prices since 2014, when a commodities glut caused many operations to be mothballed. 

Last year, Livewire Markets went so far as to describe manganese as the ‘next hot battery metal.’ 

How much of it has Jupiter got? 

Jupiter produces about 3.5Mtpa of manganese ore from Tshipi Borwa at low production costs. The mine still retains a 100 year mine life. 

Currently, the company is being slammed by higher shipping costs to the sweet tune of $90m, but expects these to moderate in the coming future. While still raised, the Baltic Index has been falling from its covid highs in recent months; as have other container benchmarks. 

Jupiter Mines, which listed in 2019, has paid a 14% dividend yield regularly ever since. 

Importantly, the company alleges it remains profitable even through times of low manganese pricing. Right now, the price for a dry metric tonne of 37% manganese ore is actually lower than what it was in 2019. 

Take a look at the headline specs from Jupiter’s latest quarterly: 

• 755,000 tonnes sold; 883,000 tonnes manganese ore produced 

• Earnings of $58.9m 

• Profits of $38.5m 

• 2022 free on board production costs down -18% lower than budget 

How is Jupiter going? 

On the 23rd of March earlier this year, Jupiter’s share price sat at 27.5c. 

Today, it is worth 20c, no doubt being hit by a myriad of concerns from retail and sophisticated investors alike; including but not limited to covid, inflation, recession, and war. 

As far as investors are concerned, 2022 represents a fairly tough crowd. 

The company’s operations were also hit by logistics issues in the region relating to rail repairs; and a new CEO was appointed in late July. 

A look at share price performance shows the following: 

• One month returns up 02.56% 

• YTD returns down -13.04%

• One year returns down -20% 

While not giving away the full story, Jupiter's five year charts show a vague link between the company's performance and the price of manganese, which was higher in 2019. With the latter set to rise over the coming decade, is Jupiter set to change its fortunes?