Australia's Consolidated Minerals recently met with over 30 electrolytic manganese metal producers in southern China about possible offtake agreements for manganese ore produced from its Ghana operations, following the termination of a 10-year supply with a Chinese company, Consmin said Friday.

The 10-year offtake agreement for a minimum 1.2 million mt/year between Consmin subsidiary Manganese Trading Limited and Ningxia Tianyuan Manganese Industry, or TMI, was terminated in August after TMI advised it was facing difficulties at four newly built electrolytic manganese metal, or EMM, production lines.

Southern China accounts for 80% of global EMM production and Consmin said the engagement from these producers on its recent roadshow to the region was "encouraging."

Under its contract with TMI, Consmin had an exclusivity agreement and was unable to sell to others in China.

"Aggregate responses indicated a total potential demand in excess of 2 million mt/year in the medium term (2016-2017)," Consmin said in a statement.

"As a result we expect strong demand for Ghana ore in the EMM industry with sales picking up momentum starting from Q2/Q3 2015.

We therefore currently expect conservative sales over the next nine months as plants transition to utilizing Ghana ore in their feedstocks," it added.

Consmin also said it has identified a number of larger EMM producers as potential key partners, who are keen to build Ghana's distribution network in southern China.

"Based on this feedback our Ghana growth ambitions remain in place and will be built around a more diverse customer base, which removes the risk of overexposure to any one customer," Consmin said.

The contract with TMI was supplied from around 70% of the manganese ore produced at Consmin's GMC mine in Ghana.

The GMC mine shipped a total of 446,000 mt in the April-June quarter out of Consmin's total shipments of 868,000 mt of manganese ore in Q2.

Consmin also produces manganese ore from its Woodie Woodie mine in the Pilbara, Western Australia.

Consmin also said in the statement it is still pursuing arbitration proceedings in London against TMI related to the termination of its long term offtake agreement.

• [Editor:Sophie]