The OM Holdings Limited (ASX: OMH) share price has been one of the best performers on the All Ordinaries on Friday.
In late morning trade the manganese producer’s shares are up 5% to 51 cents.
Why is the OM Holdings share price jumping higher?
Investors have been buying OM Holdings’ shares on Friday after it announced that its OM Manganese business has received approval to recommence in-pit mining operations at the Bootu Creek Manganese Mine.
Operations at Bootu Creek were suspended in August following a fatal accident in the Tourag Pit.
The Northern Territory Department of Primary Industry and Resources has given its approval for in-pit mining operations to recommence in a staged manner. Each stage will be subject to independent review and approval by nominated parties.
Though, at this stage there is no current proposal for any in-pit mining operations in the Tourag Pit.
Management advised that it: “recognises and acknowledges the Department of Primary Industry and Resources, Northern Territory Police and NT WorkSafe for their ongoing efforts and cooperation and will continue to work with all relevant authorities and stakeholders during the staged recommencement of mining process.”
The resumption of these operations will be a big positive for the company in 2020.
Although it has continued to operate its smelting at its Sarawak operation, it was only able to do so by sourcing substitutes to ensure the continuity of manganese alloy production.
Combined with the suspension of its production, this is expected to lead to a very disappointing half year result for OM Holdings in FY 2020.
As a result, it will be no surprise to learn that its shares have thoroughly underperformed this year. In fact, since the start of the year they had lost almost 62% of their value prior to today’s announcement.
Shareholders will no doubt be hoping that its performance improves greatly in 2020.
The post Why this ASX mining share is racing higher on Friday appeared first on Motley Fool Australia.
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