THE SOVIET MANGANESE INDUSTRY: PAST PERFORMANCE AND FUTURE PROSPECTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01058R000507760001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 28
• Document Creation Date: December 22, 2016
• Document Release Date: January 5, 2010
• Sequence Number: 1
• Publication Date: July 1, 1985
• Content Type: REPORT

Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1 25X1
Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
The Soviet Manganese Industry: Past Performance
and Future Prospects
July 1985
Summary
The USSR is the world's largest producer of manganese ore,
but most of its high-grade ore is being depleted. Soviet
manganese ores, which have a lower metal content than those
normally mined in the West, could be completely exhausted at the
two major mining areas of Chiatura and Nikopol in nine and 20
years, respectively, leaving only even lower grade ores that are
much more expensive to process. The large Bolshoy Tokmak
deposit, which the Soviets are just beginning to develop,
consists almost entirely of low-grade ores.
The Soviets are the second largest exporter of manganese.
But reduced exports in 1983 and 1984 probably reflect increased
need at home for the little remaining high-quality ore and
reduced Western demand. Exports to the West were last reported
in 1978. Although still largely dependent on the USSR, some East
European countries have become more dependent on imported Western
manganese to supplement supplies of low-grade Soviet ore.
The poor quality of Soviet ore has contributed to ferroalloy
production problems. The average manganese content of
ferromanganese in the USSR is only two-thirds that used in the
West. In order to improve the quality of their manganese
ferroalloys, the Soviets ordered six Japanese electric furnaces
in 1977 and started buying high-grade ore from the West in 1983
for the first time in over two decades. We believe that the
Soviets started importing ore because the furnaces require high-
grade ore that the Soviets cannot readily obtain from domestic
reserves.
This memorandum was prepared by Office of
Soviet Analysis, with contributions by Office of
Global Issues, and Office of Imagery Analysis.
Comments and queries are welcome and may be directed to the
Chief, Economic Performance Division, SOYA,
ON FILE Department of the Interior RELEASE
INSTRUCTIONS APPLY
NGA Review Completed
25X1
25X1
25X1
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Although Soviet demand for manganese may level off because
of slow growth in steel production and modernization of the
industry, manganese will remain an essential ingredient in
steelmaking. If the USSR is to avoid sole reliance on its low-
grade ore, it will continue to have to import high-grade ore from
the West or obtain Western technology to develop production from
seabed nodules. The Soviets have been conducting exploration,
developing their own seabed mining capability, and attempting to
buy Western technology and equipment for deep-sea mining.
Although interest in this technology may be driven by several
factors, including military, we believe the USSR primarily is
interested in future extraction of minerals from the nodules.
The manganese ore extracted from nodules is of poorer quality
than that available from many international suppliers, but it is
superior to most domestic ores.
Any dependence on the West, however, is apt to remain small
because the Soviets probably can get by using their domestically
produced ore for the next 15 to 20 years for most applications.
New beneficiation techniques and methods for lowering the amount
of manganese necessary for steel production may alleviate some of
rade ores
l
.
ow-g
the problems associated with using
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Major Producing Areas
The USSR is the world's largest producer of manganese and
accounted for about 36 percent of global output in 1983 (see
table 1).1 According to Soviet statistics, annual output of
manganese concentrate grew from 6.8 million tons in 1970 to about
9.9 million tons in 1983 (see table 2). During the 1970s,
manganese concentrate production in the USSR grew at an average
annual rate of about 3.5 percent, reaching a peak of over 10
million tons in 1979. However, production since then has
stagnated. The Nikopol mining district in the Ukraine and the
Chiatura Basin in the Georgian SSR are the principal manganese
mining regions, accounting for over 90 percent of total Soviet
production (see figure 1). Other areas with some manganese
production include Kazakhstan and the northern Urals. In
addition, a large manganese deposit is under development near
Bolshoy Tokmak in the Ukraine.
Nikopol Mining District
The Nikopol mining district is the world's largest producer
of manganese ore. According to Soviet estimates, this district
contained about 1,000 million tons of proved and probable
crude ore reserves in 1971. However, we estimate that,
1 This comparison is based on metal content rather than the amount of
manganese ore mined. According to the US Bureau of Mines, the term "ore" is
ambiguous because some of the material reported as ore actually is concentrate
or sinter. We believe that most of the material reported as ore in Soviet
reference sources probably has been concentrated.
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Table 1
Leading Producers of Manganese, 1983
Thousand tons metal content
USSR
2,976
South Africa
1,225
Brazil
1,000
Gabon
945
Australia
741
China
530
India
530
Source: US Department of the Interior, Bureau of Mines,
Mineral Facts and Problems, 1985 Edition, forthcoming.
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
USSR: Production of Manganese
Con cent rat ea
M
o
Metal Content
etal Content
f Concentrate
(percent)
1970
6,841
2,446
1975
8,459
2,951
1980
9,750
3,040
1981
9,150
2,761
1982
9,821
2,957
1983
9,876
2,976
a Although the Soviets present these data as manganese ore production, we
believe that the data more closely reflect the Western definition of
manganese concentrate.
Source: Narodnoye khozyaystvo SSSR v 1983 g., p. 154.
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
)Figure 1
Sup iet Manganese Mining Areas
Soviet Union
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
as of 1 January 1985, Nikopol deposits contained only 680 million
tons of recoverable crude ore.2 Recent Soviet references to the
Nikopol deposits suggest that the high-grade oxide ores there are
being depleted.
300 million tons of the remaining reserves consist of oxide
ores. At the current rate of production, we estimate that the
reserves at Nikopol will last 44 years; if only oxide ores were
mined, these relatively high-grade reserves could be depleted in
as little as 20 years.
The Soviets report that the manganese content of the ore at
Nikopol ranges from 12 to 30 percent. According to a Western
study, some of this ore can be used to make standard
ferromanganese after upgrading, but this product would be
expensive to produce in the West because of the extensive
concentrating and sintering steps that must be taken. It also is
high in impurities.
to six concentration plants in the area.
Chiatura Basin
Nikopol ore is sent
The Chiatura basin is one of the oldest manganese ore-
producing regions in the world but is now in decline. The
Soviets reported crude ore reserves of 218 million tons at
Chiatura in 1971, but we estimate that, as of 1 January 1985,
recoverable crude ore reserves amounted to about 75 million
tons. At the current rate of production, the basin could be
2 This estimate was determined by subtracting from published Soviet reserve
figures of 1 January 1971 all crude ore mined since that time. Ore production
was estimated by using published concentrate production figures and applying
historic concentrate-to-ore production ratios.
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
depleted in about nine years. The depletion of high-grade ore at
Chiatura is so severe that the Soviets are now using secondary
recovery methods.
approached a US firm in 1978 about the possible purchase of a
turnkey facility for the recovery of manganese ore by enrichment
of tailings.
The average grade of the ore currently being worked is only
about 30 percent manganese, and the overall average grade of the
remaining ore is about 24 percent. Although Chiatura ore rarely
was enriched in the past, five concentration plants now operate
in the region,
In addition to 25X1
declining ore grade, an Australian geologist who made some
studies at Chiatura in 1982 noted that the Soviets may be running
into metallurgical problems with this ore in the production of
manganese alloys because the ore contains impurities such as
tungsten and phosphorus.
Kazakhstan
The Dzhezdy mining area in Kazakhstan is the major supplier
of manganese for the region's metallurgical industries. Minor
amounts of ore may also be produced at mines in the Karazhal
region of the Karaganda Oblast. These deposits are low in
phosphorus and sulfur, making them well suited for ferroalloy
production. However, a Western study reports that the average
manganese content of the ore at Dzhezdy is only 11 to 17 percent,
resulting in a relatively high cost for concentrate. Soviet
literature has reported that capacity is being.added in
Kazakhstan--a new mining enterprise has been completed at
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Dzhezdy, and a new mine is under development at Ushkatin. The
ore mined in Kazakhstan is beneficiated at a plant in Dzhezdy.
Northern Urals
Manganese deposits in the northern Urals are numerous but
relatively minor. The small amounts of ore mined probably are
shipped to Nikopol for concentration. According to the Soviets,
most of the oxide ores have been extracted and lower grade
carbonate ores--with an average grade of only 21 percent--are
left. The Soviets report that beneficiation tests of these ores
show the possibility of obtaining quality manganese concentrates
for the production of manganese alloys, but demand by the Urals
steel industry is now being met with supplies from other mining
regions.
Bolshoy Tokmak
The Soviets plan to make Bolshoy Tokmak in the Ukraine the
base of a new ferromanganese production center. It is the
largest known manganese deposit in the USSR, and the Soviets
estimate its reserves at over 1,100 million tons.
96 percent of the deposit consists of carbonate
ores with an average manganese content of 24.5 percent and 4
percent are oxide ores with 34.3 percent manganese.
an open-pit mine began production in 1980 (see
figure 2). The Soviets also plan to develop five underground
mines at Bolshoy Tokmak, each with a capacity of 1.5 to 2 million
tons per year.
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Manganese Alloys
About one-half of all manganese ore is processed into alloys
(see inset). Ferromanganese and silicomanganese are the
principal manganese alloys used in the steel industry. The
Soviets have 10 specialized ferroalloy plants, but most manganese
alloys probably are produced at four of the plants--the Nikopol
and Zaporozh'ye Ferroalloy Plants in the Nikopol Basin, the
Zestafoni Ferroalloy Plant in the Chiatura Basin, and the Yermak
Ferroalloy Plant in northeastern Kazakhstan.
the chief of the Soviet ferroalloy
directorate reported in late 1984 that the USSR annually produces
1 million tons of standard ferromanganese and 1.4 million tons of
silicomanganese.
Much of the ferromanganese produced in the USSR does not
meet Western standards. Low-quality ore and a high percentage of
impurities result in an average manganese content of
ferromanganese in the USSR of only 52 percent, compared to 78
percent in the West. The use of low-grade ferromanganese
introduces inefficiency into the steel process. The Soviets must
use 30 to 40 percent more of their low-grade ferromanganese, and
more scrap must be added in the steelmaking furnace, which
results in heat loss and greater waste.
As part of a continuing effort to modernize their industry,
the Soviets ordered six Japanese electric furnaces--each with an
annual capacity of 120,000 tons--in 1977 for the production of
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
The Mission of Manganese
From 90 to 95 percent of all manganese produced is used in
metallurgy, primarily for steelmaking, with the remaining amount
going to the battery and chemical industries. In fact, no
satisfactory substitute has been found for the metallurgical uses
of manganese. In the steel industry, manganese is used as a
smelting aid in the blast furnace d1dded tomanufacture
blastofurnace
ferroalloys (see figure 3). Manganese a
charge can be in virtually any form or grade, such as ore,
sinter, slag, scrap, and manganiferous iron ore. It serves as a
desul f uri ze r and deoxi di zer, and it increases refractory lining
life. The International Iron and Steel Institute estimates that
about 45 percent of total managanese metal consumed from all
sources is used in the blast furnace.
Manganese is also used as an alloying agent in the form of
ferromanganese and silicomanganese to enhance toughness,
hardness, wear resistance, and overall strength of steels.
Ferroalloys are added to steel either in the furnace at the end
of the steelmaking process, or after the metal has been tapped
from the furnace into the ladle. The manganese content of most
steels range between 0.5 and 1.5 percent. However, certain wear-
resistant steels used in such applications as railroad tracks and
mining and crushing equipment contain about 10 to 14 percent
manganese.
We estimate that the Soviets use 44 to 53 kilograms of
manganese concentrate per ton of crude steel produced,
considerably higher than in other steel-producing countries. The
Soviets consume larger amounts of manganese because their iron
ores are low in manganese, they make greater use of high-
manganese steels, and the coke they use in steel production is
usually high in sulfur.
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Figure 3
Manganese Use in Steelmaking
~IIcclric
Ul1Jie
In the 1 L11118CC
;II the cn I of the
titcclmatiinv proce?1
()lien hlc;Irth
111111 :lie
Moltcn
,feel
( ontcnlionul (anti IoLI
I MCIII ICCI11llli C I,IIIIL
Inept hICJLdov111
mill
~I);I,ir IIvvecn
ILI 111 ACC or
Molten
,feel
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
ferroalloys.
furnaces were supplied to the Nikopol Ferroalloy Plant and the
other two will go to Zestafoni. two of
the furnaces were installed at Nikopol by mid-1983 (see figure
4).3 Some East European countries, particularly East Germany,
have contributed funds for the construction of the furnaces and
will be receiving some portion of the ferroalloy output as
repayment.
Turnaround in Trade
The USSR is the world's second largest exporter of manganese
concentrate, most of which originates in the Chiatura Basin. In
1984 the Soviets exported 1.1 million tons of concentrate or
about 10 percent of their total production--all to East European
countries (see table 3). According to Soviet data, the USSR last
exported manganese concentrate to the West in 1978.
the USSR terminated manganese and some other
metals exports to the West after a speech by Leonid Brezhnev in
late 1978 that identified national shortages in metallurgy and
energy.
3 Output from these two furnaces was presumably included in production
figures given by the chief of the Soviet ferroalloy directorate in late
1984. Annual output of manganese alloys could increase by about 600,000 tons
when the other four furnaces are installed and the two newly-operating
furnaces reach design capacity, unless the Soviets retire some older.
equipment.
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Table 3
USSR: Exports of Manganese Concentratea
1970
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
.otal
1,228
1,411
1,342
1,352
1,186
1,317
1,255
1,194
1,144
1,079
1,081
Communist countries:
Bul gari a
80
126
127
108
78
103
125
117
77
81
74
Czechoslovakia
153
341
356
320
373
423
397
372
346
295
300
East Germany
175
179
185
186
170
182
135
130
107
85
68
North Korea
21
20
20
11
21
21
29
15
28
20
21
Poland
365
484
482
502
446
518
490
493
535
539
549
Yugoslavia
31
30
26
34
17
27
36
38
31
32
35
West
403
195
89
115
19
0
0
0
0
0
0
Unspecified
0
36
57
76
62
43
43
29
20
27
34
a Although the Soviets report exports of manganese ore, we believe the product
exported is actually concentrate.
Source: Vneshnyaya torgovlya SSSR (annual issues).
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Decreasing Western demand for low-grade Soviet manganese is
probably a more likely explanation for the drop in trade.
Western steel producers prefer higher grade ore that is readily
available from Gabon, South Africa, Brazil, and Australia. The
terminating of exports to the West did not cost the USSR an
important source of hard currency. In 1978 the price of high-
quality manganese ore was only about $66 per ton, and with the
exception of the years 1980 and 1981, the price has remained
stagnant over the last decade.
The USSR traditionally has been largely self-sufficient in
manganese, with only small amounts imported from Hungary. In
1983, however, the Soviets made their first appearance in over
two decades as buyers in the open market by purchasing 200,000
tons of high-grade manganese ore from Gabon and Australia. The
Soviets bought a total of 300,000 to 350,000 tons of high-grade
ore from free market countries in 1984 and probably will purchase
345,000 tons in 1985.
Although a number of reasons may be behind the Soviets'
appearance in the open market for high-grade manganese ore, we
believe that they are importing Western ore for use in the
Japanese-built ferromanganese furnaces. These furnaces
reportedly require high-grade manganese ore that the Soviets
cannot readily obtain from domestic reserves. Moreover, imports
began during the year when the two new furnaces were installed at
Nikopol.
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
The USSR may also be importing ore to increase domestic
stockpiles. We do not know whether the Soviets stockpile more
manganese ore than needed to maintain concentrate and ferroalloy
operations. ore storage areas at some production 25X1
areas, and the Soviets may be stockpiling ore while waiting for
the installation of the remaining Japanese ferromanganese
furnaces.
It is unlikely that the Soviets emerged as importers of
high-grade ore to take advantage of low prices during a time of
decreased demand. Any short-term cost advantage from using low-
priced ore would be more than offset by higher production costs
if the Soviets returned to total dependence on low-grade domestic
ore. changing the percentage of 25X1
manganese in the ferroalloy mix necessitates a complete
reprogramming of the production operation, which is both costly
and time consuming.
We also do not believe that the USSR entered the manganese
market because of i nabi l i ty to meet both domestic and East
European ore requirements. Hard currency shortages forced some
East European countries to cut back on Western manganese imports
in the early 1980s and turn to the USSR to make up the
difference. But some of the countries having hard currency
problems, such as Romania and Poland, are again purchasing
manganese ore from the West largely on a countertrade basis.
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
The Seabed Mining Option
The Soviets have had a longstanding interest in locating and
analyzing ocean-bottom mineral deposits, especially manganese
nodules (see inset). They first reported the recovery of nodules
in 1957 from the Pacific Ocean. Subsequent surveys in the
Indian, Pacific, and Atlantic Oceans, as well as in Soviet
coastal waters, have provided increasing information on the
location, composition, and origin of the nodules.
we believe that the Soviets have not yet developed the technology
needed for the collection of the nodules. This judgment is
supported by the attempts that Moscow has made to buy a
submersible nodule-mining vehicle, an oceanographic camera
system, and a seabed miner built on a drillship hull from Western
companies
We believe that the Soviets are interested in seabed mining
technology to obtain minerals from the nodules, probably because
of their need for higher grade manganese ore. Manganese ore
extracted from nodules is of poorer quality than that available
from many international suppliers, but it is superior to most
domestic reserves. The USSR's interest in manganese nodule
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Seabed Mining of Manganese Nodules
Manganese nodules consist mainly of manganese and iron
oxide, but they also contain copper, nickel, cobalt, aluminum,
titanium, lead, vanadium, molybdenum, zinc, and chromium. Of
most economic interest are nickel (used primarily in steel
production), copper (widely used in electrical equipment), cobalt
(used in the electrical and aerospace industries), and
manganese.
Deposits of these small, dark brown, irregularly shaped
nodules are normally found at depths of 4,000 to 6,000 meters.
The distribution of nodules is uneven, but the largest deposits
are thought to be in the Clarion-Clipperton zone, an area of the
Pacific Ocean that extends from central America to south of
Hawaii. Nodules from prime sites in this area contain an average
of 25 percent manganese, 1.5 percent nickel, 1.2 percent copper,
and 0.25 percent cobalt.
Many Western countries, including the United States, Japan,
the United Kingdom, Canada, and West Germany, have been actively
involved in studying the potential of commercial seabed mining.
However, development has been slowed by continuing legal,
economic, and technical questions.
The Law of the Sea (LOS) treaty, signed by over 100 nations
in 1982, formed a regulatory agency and outlined some
controversial conditions for seabed mining. The treaty, however,
has not been signed by the United States and several other
Western countries. It is unclear what will happen when claims
filed with the regulatory agency conflict with mining rights
claimed outside the LOS framework.
Economic questions also hamper the development of seabed
mining. A recent US Bureau of Mines study estimates that a four-
metal mining project that processes 3 million tons of nodules
annually would require an estimated $2-billion capital investment
and operating expenses of $150 per dry ton and would yield a rate
of return after taxes of 6.6 percent. Most Western investors
would require a rate of return of about 20 percent before
undertaking such a risky venture. We do not have any direct cost
comp 9risons for land-based versus seabed mining of manganese
The markets for metals produced from the seabed are fairly
uncertain, but the technology for mining and processing is even
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85TO1058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
less clear. Four major components are involved--a mining system,
a mother ship to provide the focus of mining operations, ore
transporters, and processing plants. The weakest link in the
chain is the mining system. Systems that include either self-
propelled or towed collection apparatus with lifting devices
attached to a continuous line bucket have been tested on a pilot
basis.
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
mining could also be driven by several other factors:
o A desire to prevent other countries from cornering the
market in manganese nodule mining.
o National pride because the United States and Japan have
developed and tested prototype systems for manganese
nodule mining.
o A desire to obtain Western seabed technology for
military applications.6 25X1
The Soviets probably are over 20 years away from full-scale
seabed mining operations. In addition to the technological
barriers, some workable, legal framework for mining the seabed
needs to be established. The Soviets almost certainly will
depend on Western equipment and technology, particularly for the
mining phase of the operation. Although the processing of
manganese nodules is similar to that used in land-based
6 The technology involved in mining operations at depths down to 6,000 meters
is directly applicable to deep-ocean military activities such as the
implantation and retrieval of weapons and antisubmarine warfare sensors.
Because of possible military applications, the Soviets have been unable to
seabed mining equipment and technology.
7 As a pioneer investor. the USSR i s guaranteed a m' site on the seabed
staked a claim in the Clarion-Clipperton region in t e
h
t
i
ave
s
e
the Sov
Pacific, but most of the area claimed by the Soviets overlaps claims of other
countri es.
25X1
25X1
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
operations, major environmental problems will likely arise from
processing manganese ore containing high concentrations of barium
and other toxic materials. Because the nodules also contain high
percentages of nickel and copper--undesirable in ferromanganese
production--the nodules must undergo a meticulous cleaning and
separating operation.
If the Soviets obtain the technology and undertake seabed
mining operations, the effect on international metals markets
could be dramatic. According to Western studies, an annual 3-
million-ton operation might not only yield 500,000 tons of
manganese ore, but also an estimated 40,000 tons of nickel and
7,000 tons of cobalt. Some of the nickel and cobalt probably
would be sold on the international market in direct competition
with cobalt from Zaire and nickel from Cuba.
Outlook
The USSR will almost certainly continue to rely on its vast
low-grade reserves for the bulk of its manganese requirements.
To have higher quality manganese available for use in ferroalloy
and steel production, the Soviets could continue importing from
Western countries or initiate costly deep-sea mining
activities. Additionally, the Soviets may improve their
manganese enrichment technology to be able to produce higher
quality alloys from their own ore. The sources chosen
undoubtedly will depend on the future demand for manganese ore in
the USSR. The two factors that most affect the demand for
manganese are the level of steel production and. the amount of
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
manganese used to produce a unit of steel.
Slowdown in Manganese Demand
A Western study of the world steel outlook reports that the
use of steel has been steadily declining because of substitution
of alternative materials and conservation. The Soviet press also
reports that similar substitution--through use of other
structural materials such as plastics, aluminum, glass, and
reinforced concrete--is currently taking place in the USSR. As
the quality of structural materials improves and their
manufacturing costs decline, we foresee continuation of the
substitution trend. But conservation of steel--despite the
priority Soviet officials are giving to saving metals--is making
little headway and is not likely to substantially reduce demand
in the future.
A Western econometric study estimates that--allowing for
substitution and conservation--Soviet crude steel production will
only grow at an annual rate of about 1 percent in 1986-90 and at
less than 1 percent in the 1990s, similar to projections of
Western steel output. This compares to average annual production
increases in the USSR of 2.1 percent in 1971-80 and 0.9 percent
in 1981-84.
In addition to slow growth in steel production, we expect
that the amount of manganese used to produce a unit of steel in
the USSR will drop, but manganese will remain an essential
ingredient in Soviet steelmaking. Such a decline in manganese
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
consumption occurred in the West during the 1960s when open-
hearth furnaces and Thomas and Bessemer converters were replaced
by basic oxygen and electric furnaces. As the Soviet steel
industry continues to modernize, through the use of newer
steelmaking techniques such as external desulfurization and
combined-blowing converters and expanded use of continuous
casting, it may realize some of these same savi ngs.8
Domestic Production
Despite the poor quality of their ore, the Soviets will
almost certainly continue to rely on domestic, land-based
production of manganese as their primary source for the next 15
to 20 years. The main source probably will be the remaining
oxide ores at the Nikopol and Chiatura Basins. Secondary
recovery of oxide ores, which is now taking place at Chiatura,
probably will not occur at Nikopol. The Nikopol mining area is
being extensively reclaimed to return the land to agricultural
use. No large, unexploited deposits of oxide ores are left in
the USSR, but some oxide ores may remain in small deposits that
can be mined for use in local steel plants.
Large deposits of lower grade carbonate ores remain at
Nikopol and Chiatura and make up the bulk of the reserves at
Bolshoy Tokmak. The Soviets are currently mining some carbonate
ores at Nikopol and at the new mine at Bolshoy Tokmak. Although
8 According to a US trade journal, the industrialized countries' weighted
average manganese metal content fell from 6.1 kilograms per ton of steel
F_ I
produced in 1981 to 5.5 kilograms in 1983.
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
relatively abundant, carbonate ores are harder and more expensive
to process than oxide ores, and carbon dioxide gas is given off
when the ores are used to make ferroalloys in an electric
furnace. A buildup of too much gas pressure can blow out the
sides of the furnace. Carbonate ores can be sintered to remove
the carbon dioxide, but this is an energy- and capital-intensive
operation.
New beneficiation techniques and methods for lowering the
amount of manganese necessary for steel production may help
reduce the impact of using low-grade Soviet ore. Research
currently is being conducted in these areas in the West, and we
believe the USSR also is examining improved beneficiation
techniques. According to the Soviet press, a small experimental
plant for chemical enrichment of manganese ore went into
operation at Nikopol in 1982, but the use of effective new
beneficiation techniques on a large scale probably will not occur
for several years.
Continued Trade
We believe that the Soviets will increase their imports of
high-quality manganese ore from the West by approximately 4
percent per year for the foreseeable future. First, the Soviets
appear to have committed themselves to imports for use in new
ferromanganese furnaces despite their traditional philosophy of
self-sufficiency. Second, if the Soviets grow more dependent on
carbonate ores, they may need to mix them with higher grade
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
imported ore. Mexico, for example, currently sinters its
carbonate ores and then blends them with higher grade ores. In
addition, the Soviets may choose to reduce exports to Eastern
Europe to preserve their dwindling supplies of oxide ores. 25X1
25X1
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
 Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1
Glossary
Ben efi ci at ion Enrichment of ore for smelting by drying,
flotation, or magnetic separation.
Concentrate Ore that has been enriched by removing waste.
Ferroalloy A substance composed of iron and one or more
other chemical elements used as an agent for
introducing these elements into molten metal.
It is added to effect changes in the mechanical
or physical properties of steel.
Ferromanganese A ferroalloy that is classified primarily on
the basis of manganese metal and carbon content
into standard or high-carbon, medium-carbon,
and low-carbon grades. Standard ferromanganese
is the most commonly used manganese alloy. The
standard ferromanganese used in the West
contains 74 to 82 percent manganese and 7.5
percent carbon.
Manganese nodules Spherical masses of minerals, mainly composed
of iron and manganese, that cover extensive
areas of the ocean floor. These vary in size
from extremely small to some 6 inches in
diameter and may prove a useful source of
minerals.
Manganese Ore The US Bureau of Mines uses the term manganese
ore for those ores containing 35 percent or
more manganese. Oxide and carbonate ores are
the most common commercial ores. Oxide ores
include pyrolusite (Mn03), psilomelane
(MnO*MnO2*2H20), and manganite (MnzO3*H2O).
Rhodochrosite (MnCO3) is the principal
carbonate ore.
Metal content The amount of pure metal contained in ore or
concentrate.
Silicomanganese A commonly used ferroalloy that normally
contains 65 to 68 percent manganese, 1.5 to 3
percent carbon, and 16 to 32 percent silicon.
Tailings
A mass of fine particles that has been heated
for a prolonged time below the melting point.
Waste remaining after mining or concentration
or beneficiation of ores
Sanitized Copy Approved for Release 2010/01/05: CIA-RDP85T01058R000507760001-1