Georgian Manganese Ends Underground Mining at Chiatura Amid Low Ore Grades and Mounting Losses

Georgian Manganese Mining

Strikes, falling silico-manganese prices, and financial strain force producer to scale back operations in Georgia.

Georgian Manganese, a key manganese alloy producer, has announced it will permanently halt underground mining at its Chiatura complex in Georgia. The decision follows an independent audit by DMT, a German consultancy, which found ore grades too low to process profitably.

The review cited “very high operating costs” and a continued slump in manganese concentrate prices, concluding that underground operations were economically unviable. Chiatura also includes open-pit mining, which remains under review.

Labor Disputes and Financial Pressures Escalate

Protests and strikes have plagued Chiatura since early 2023, with 70% of the mines affected before operations fully halted in November. The strike also forced the suspension of silico-manganese production at the Zestafoni smelter, a key facility for Georgian Manganese.

Chiatura Management (CMC), the operating contractor, failed to install cost-saving technology upgrades due to the unrest. During the shutdown, CMC continued paying workers, incurring loans worth 83 million lari ($29.9 million) to meet union obligations. These costs have now caused "colossal losses," according to CMC director Maxim Mazurenko.

US Exports Decline as Market Prices Fall

Georgia has long served as a major silico-manganese supplier to the United States, exporting 78,692 metric tonnes in 2023, or 22% of U.S. imports. However, shipments ceased in October, though some volumes still entered in November and January.

Meanwhile, spot prices for silico-manganese have fallen sharply to 56–60¢/lb, a 64% drop from the March 2022 peak of $1.50–1.70/lb, based on SUPERMETALPRICE. Prices remain in a tight band due to long-term contracts covering most U.S. steelmakers.

Georgian Manganese’s decision signals deeper challenges in the global manganese supply chain, especially for regions reliant on export-dependent alloy production.