Working Paper 132 - Manganese Industry Analysis: Implications for Project Finance

This study analyzes the global manganese value chain, with the objective of understanding types and sources of project finance, and the role of development finance institutions (DFIs). We find that DFIs participation in transactions involving the iron group of metals, which encompasses manganese, was low for transactions completed between 2005 and 2010 as well as upcoming transactions between 2010 and 2015. Nonetheless, financing from local and multilateral development banks was countercyclical in nature; and in the very few transactions where multilateral development partners were involved, their participation was in the form of A-B or syndicated loans, drawing-in additional financing from commercial banks. Applied to the manganese mining sector specifically, these findings suggest limited need for DFIs financing. However, some features of the manganese market are assessed to have a tempering effect on private finance, in particular, the substantial and largely unmitigated market risk which improves the case for longer term DFIs financing.