The impact of China’s future demand for raw materials on the global manganese industry

The research problem that this research addresses is to investigate the impact of China’s future demand for raw materials on the global manganese industry.The general resources boom that the world is experiencing is largely driven by the role played by China in market dynamics. In recent years (2003 – 2006) the growth in the Chinese economy has been approximately 10% (IMF, World Economic Outlook, 2006). The manganese industry has concomitantly seen an injection in commodity prices through the increased demand for manganese to feed the production of steel in China. Looking towards the future, the question remains for how long will the Chinese demand for raw materials last? Are there factors that could slow down the demand or increase it? Is China insulated from economic downturns in the US and West?The research paradigm adopted in the research was qualitative and quantitative in nature and takes the form of fuzzy cognitive mapping simulation study. Ten in-depth interviews were conducted using a draft fuzzy cognitive map. Using the respondents input the draft fuzzy cognitive map was revised to produce an enhanced validated fuzzy cognitive map on which simulations could be run.The research results show that the economic outlook for China looks positive with GDP growth of between 8-10% continuing for the foreseeable future. Risks to this growth profile have been identified and include the un even distribution of growth across the geography of china, periodic macro economic instability and the environmental impact of China’s rapid industrialisation. Policies have however been put in place to address these issues. A key external risk was China’s exposure to the US which was brought to the forefront with the present financial crisis. The Chinese economy though is expected to recover fairly quickly from this as its economic growth is largely domestic demand driven.The research results did not deviate far from literature on China and its raw material requirements. The respondents did however impart key insights on the more recent thinking regarding the Chinese economy and how it has overcome its previous impediments. The implications for this research are key to allowingiimanganese producers to position themselves to take advantage of the demand for manganese stemming from China and also to be aware of the potential risk issues that may manifest.