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Risk Identification and Evaluation of the Long-term Supply of Manganese Mines in China Based on the VW-BGR Method

Shule Li (), Jingjing Yan (), Qiuming Pei (), Jinghua Sha (), Siyu Mou () and Yong Xiao ()
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Shule Li: School of Economics and Manganese, China University of Geosciences, Beijing 100083, China
Jingjing Yan: School of Economics and Manganese, China University of Geosciences, Beijing 100083, China
Qiuming Pei: Faculty of Geosciences and Environmental Engineering, Southwest Jiaotong University, Chengdu 611756, China
Jinghua Sha: School of Economics and Manganese, China University of Geosciences, Beijing 100083, China
Siyu Mou: School of Economics and Manganese, China University of Geosciences, Beijing 100083, China
Yong Xiao: Faculty of Geosciences and Environmental Engineering, Southwest Jiaotong University, Chengdu 611756, China

Sustainability, 2019, vol. 11, issue 9, 1-23

Abstract: Manganese is mostly used in the iron and steel industry and serves as an important metal mineral in the national economy. It is difficult to substantially increase the output of China’s manganese ore because it is of low grade and high impurity content. However, as a large consumer in the world, it is very important to ensure the long-term stable supply of this mineral. Collecting historical data on manganese ore in China over the past 20 years, we identified and evaluated risks during the whole process of production, supply, consumption, reserves, and trade of resources using the Volkswagen and German Federal Institute for Geosciences and Natural Resources (VW-BGR) method by selecting nine indicators: current market equilibrium, market price volatility, Reserve/production ratio, import dependence, import concentration, country risks, country concentration and future supply and demand trend. Furthermore, we assessed its economic importance by calculating the contribution of manganese ore involved in different value chains. It shows the same downward trend both in manganese ore consumption and economic importance, and the future demand of manganese ore will slow down, and the global supply will exceed demand. Based on the comprehensive evaluation of supply and demand trends in the past and future, it was concluded that the current market balance, import dependence and country concentration risks are the main driving factors for the supply risk of manganese ore in China, showing higher supply risk than that of the other factors; the resource and geostrategic risks are moderate, and may significantly reduce the supply risk if effective measures are implemented. As per the aforementioned analysis, to address the risk of supply interruption, this study provides some suggestions and measures, such as strengthening resource reserves and low-grade manganese ore utilization at home, actively exploring foreign markets, exploiting overseas resources, expanding import channels, extending the industrial chain, and adopting equity mergers and acquisitions abroad.

Keywords: manganese; long-term supply; VW-BRG method; risk identification and evaluation (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2019
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