Exxaro Resources has held talks with the owner of one of South Africa’s largest manganese mines about buying the asset, as the coal producer seeks to diversify its business, according to people familiar with the matter.

Johannesburg-based Exxaro has discussed the potential acquisition of the Tshipi Borwa mine, said the people who asked not to be named as the information is private. The operation belongs to Tshipi e Ntle Manganese Mining, a joint venture between Australia-listed Jupiter Mines Ltd. and closely held Ntsimbintle Mining.

There’s no guarantee the talks will lead to a deal, said the people. Tshipi’s owners could consider other options and buyers for the asset, one of the people said.

One of South Africa’s biggest coal miners, Exxaro has been trying to add other minerals to its portfolio but lost out on a copper project in Botswana that sold for almost $2-billion last year. CEO Nombasa Tsengwa – who was suspended earlier this month – told Bloomberg in October that the company is prioritizing manganese, which is primarily used in steelmaking.

Exxaro doesn’t “discuss deals due to the nature of their confidentiality,” a spokesperson said by email, while confirming that the company is “hard at work in the market engaging potential targets in earnest.”

Tshipi e Ntle didn’t respond to a request for comment. Jupiter, which owns 49.9% of Tshipi, and Ntsimbintle, which controls the balance, also didn’t respond.

The current market value of Jupiter – whose only asset is the Tshipi stake – is A$265-million ($161-million).

South Africa is the world’s largest exporter of mid- to high-grade manganese ores. South32, Anglo American, African Rainbow Minerals and Assore Group are shareholders in other major mines that are concentrated in the Northern Cape province.

Tshipi’s output in 2022 was 3.3-million tons of ore, making it the country’s second-biggest producer in that year, according to a recent presentation by Jupiter.

While the steel industry accounts for above 90% of manganese demand, batteries – including those used in electric-vehicles – will triple their share of consumption to more than 7% by 2040, according to Project Blue, a Cape Town-based consultancy.

Announcing Tsengwa’s suspension on Dec. 4, Exxaro said it will continue pursuing “a measured and responsible transition” away from being a coal-dominated business.