Battery Tech Locked In A Not-So-Heavy-Metal Conundrum

As the number of mobile and stationary devices requiring battery power escalates at ever faster rates, the cost of materials reacts by also rising. According to a report that follows by the USA News Group, it appears that lithium, the most prominent source of battery metal, may have reached its ceiling, while other metals exhibited modest growth. Top of the moderate list is manganese.

 

Lithium is the early leader in the race to provide cells for electric vehicles (EVs) and in mass storage applications, but manganese is another vital battery component that is gaining ground on a steady curve. As a result, recent reports indicate manganese is also one of several crucial metals headed for a supply crunch. This puts the onus squarely on miners to come up with more manganese. The call has gone out for much more investment in exploration in order for supplies to keep up.

Several public companies are in the manganese business and stand to benefit from the rise including Glencore PLC, Ferroglobe PLC, BHP Billiton Ltd, and Maxtech Ventures. Glencore PLC is highly diversified, but major producer of manganese while Ferroglobe PLC is a leading producer of manganese, and BHP Billiton Ltd remains a giant diversified mining company and likely the largest miner of manganese worldwide.

The larger producers of manganese are taking the growth in stride, but one smaller mining company gaining traction for its entry into manganese. That company, Maxtech, could become the next near-term producer of manganese in Brazil.

 

No US Reserves

 

Manganese is primarily used in steelmaking, accounting for about 90% of all demand. It is also used in lithium-ion and other battery technologies suited to the new applications such as electric vehicles. South Africa and Australia are the primary suppliers of manganese imported into the United States for use in lithium-ion batteries.

 

The U.S. currently depends 100% on manganese imports from other countries and at present no producing mines. It also holds no official manganese reserves.

 

Demand Up = Prices Up

 

Last year, South Africa was the top manganese-producing country globally, reaching total production of 4.7 million MT. Australia came in third place with total output of 2.5 million MT. Brazil placed fifth among world suppliers.

 

Several of the major producers of manganese are increasing their production and refining capabilities, but even they will not be capable of keeping pace with added demands for manganese, according to recent figures. Large producers are also not sensitive to local markets with specific needs.

 

Unlike steel demand, which is typically steady, the supply of manganese is declining. The price of pure manganese has risen to roughly $2,800 a tonne (metric ton), nearly double what it was in 2015. The demand for electrolytic flake manganese - the kind used in batteries - is now outpacing supply by about 25,000 MT. There has rarely been more opportunity to enter the manganese supply chain than at this point.

 

Maxtech Ventures Is On Track

 

Maxtech Ventures, a Canadian-based junior mining company, has a land package of manganese mineral claims in the State of Mato Grosse, Brazil. At 540,000 hectares, the company's interest is expected to be one of the world's highest-grade, lowest-cost manganese operations.

 

Their target this year is a projected 11,500 tonnes of manganese. They expect to scale up to full production at 80,000 tonnes per annum by 2020 -perfectly timed to catch the upswing in global manganese prices.

 

To bolster its prospects, Maxtech has entered into an agreement with Maringá Ferro-Liga S.A., a subsidiary of Grupo Maringá (the second largest manganese ferroalloy producer in South America) to enable the joint evaluation, exploration and potential acquisition of project specific manganese assets in Brazil. That positions Maxtech Ventures perfectly to produce manganese for its other major use: fertilizer.

 

Manganese has unique qualities that enable providers to earn up to a 25% to 30% premium on average pricing for this application and Maxtech is in an ideal location to offer its manganese to the local producers in in Brazil. Maxtech's prospect is right in the heart of one of the world's leading soybean growing regions.

 

The flurry of activity in battery metals has reached a near fever pitch this year and the global expectation of a shift to electric vehicle fleets is becoming a real possibility. Obviously, this new reality is bearing on the associated materials. Lithium and cobalt may have pushed to new highs, but manganese has experienced somewhat of a quieter path, mostly flying under the radar. It's expected that will change in the very near future, making manganese the remaining battery metal with major growth potential.

 

Comparisons

 

Glencore PLC

 

Glencore plc engages in the production, refinement, processing, storage, transport, and marketing of commodities worldwide. It operates in three segments: Metals and Minerals, Energy Products, and Agricultural Products. The Metals and Minerals segment is involved in smelting, refining, mining, processing, and storing zinc, copper, lead, alumina, aluminum, ferroalloys, nickel, cobalt, and iron ore.

 

The Energy Products segment activities include coal mining and oil production operations covering crude oil, oil products, steam coal, and metallurgical coal; and investments in ports, vessels, and storage facilities. The Agricultural Products segment engages in the farming, processing, handling, storage, and port facilitating of wheat, corn, canola, barley, rice, oil seeds, meals, edible oils, biofuels, cotton, and sugar.

 

Glencore plc markets and delivers physical commodities sourced from its own production and third party producers to industrial consumers. The company was formerly known as Glencore Xstrata plc and changed its name to Glencore plc in May 2014. Glencore plc was founded in 1974 and is headquartered in Baar, Switzerland.

 

Ferroglobe PLC

 

Ferroglobe PLC operates in the silicon and specialty metals industry in the United States, Europe, and internationally. The company offers silicon metals that are used in personal care items, construction-related products, health care products, and electronics, as well as used in the manufacture of silicone chemicals; silicomanganese, which is used as deoxidizing agent in the steel manufacturing process; and ferromanganese that is used as a deoxidizing, desulphurizing, and degassing agent in the removal of nitrogen and other harmful elements from steel.

 

It also provides ferrosilicon products that are used to produce stainless steel, carbon steel, and various other steel alloys, as well as to manufacture electrodes and aluminum; silico calcium, which is used in the deoxidation and desulfurization of liquid steel, and production of coatings for cast iron pipes, as well as in the welding process of powder metal; nodularizers and inoculants, which are used in the production of iron; and silica fume.

 

BHP Billiton Ltd.

 

BHP Billiton Limited is an international resources company. BHP Billiton Limited discovers, acquires, develops, and markets natural resources worldwide. It operates through four segments: Petroleum, Copper, Iron Ore, and Coal. The company explores for, develops, produces, and markets oil and gas in the United States Gulf of Mexico, Australia, and Trinidad and Tobago. It also explores for copper, silver, lead, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and thermal coal.

 

For a more in-depth look into MVT, view the in-depth report at USA News Group.

 

 

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