The demand for high grade, high purity manganese sparked by its application in new power storage and battery technology is creating a shuffle among suppliers as its large players look to acquire more resources.
Manganese companies affected by the changing landscape include Ferroglobe PLC (NASDAQ: GSM), Glencore PLC (LSE: GLEN), Anglo American PLC (LSE: AAL), and Maxtech Ventures (CSE: MVT) (OTC: MTEHF).
Manganese offers a safe new material for rechargeable batteries, and the markets are showing that they’re preparing to handle the soon-to-come onslaught of demand for manganese.
High grade, high purity manganese is used as a primary cathode material in lithium-ion manganese batteries or NCM batteries. The NCM formulation of batteries is the slated as the next generation of battery cathodes, after the lithium-nickel-cobalt-aluminum design (NCA) battery.
Large producers are shifting to acquire existing manganese resources, but one smaller mining company is moving to expand manganese resources in Brazil through near term production. Maxtech Ventures (CSE: MVT) (OTC: MTEHF) is well positioned with to develop manganese with a prominent local distribution channel in place.
International miners that produce manganese have seen positive growth of global demand and price increases. Majors including Ferroglobe PLC (NASDAQ: GSM), a leading producer of manganese, Anglo American PLC (LSE: AAL), a large miner of manganese worldwide, and Glencore PLC (LSE: GLEN), a highly diversified company that produces significant manganese, have all moved to expand manganese resources this year.
PRICING CREATING OPPORTUNITY
Positive pricing in the manganese market has set the stage for movement for both big and small players. One of the biggest business deals going on in the manganese market today involves Ferroglobe’s purchase of Glencore’s assets. It’s indicative of a market in motion.
Just this month, Ferroglobe announced that they had purchased Glencore’s European manganese plants. These plants, which are located in France and Norway, have positioned Ferroglobe to double their global manganese alloy capacity. This makes Ferroglobe one of the world’s biggest producers of ferromanganese and silicomanganese.
Ferroglobe is already one of the world’s largest producers of silicon metal and other silicon/manganese-based alloys. They serve clients around the world, serving markets ranging from automotive to solar to construction and among others.
The purchase of these plants will also help Ferroglobe grasp a further reach and strategically target more European clients.
MANGANESE A MUCH NEEDED METAL
Manganese is a relatively abundant metal that is mined worldwide, but not in North America.
Roughly 90% of all manganese production is used in the manufacture of steel with the remaining 10% used in specialty chemical and agricultural applications, such as fertilizer.
Manganese is currently being sought after for large scale rechargeable battery applications. For instance, electric vehicles (EVs) can use manganese batteries.
Since it is used widely in steel production, and with the steel demand growing, there’s inevitably going to be greater demand for the mineral.
Clean-energy applications are also on the uptick, and this is also going to increase the demand for manganese.
Over the past year, manganese has seen a 40%+ price increase. That is significant for the world’s fourth most used metal by tonnage.
Researchers are already telling us that without new sources and increases in production, a lack of supply could cause prices for these metals to spike and lead to serious global challenges.
ADDITIONAL GROWTH MARKETS
Manganese is also used in fertilizer and is a necessary nutrient. It cannot be substituted since it’s needed chemically for photosynthesis to occur.
Its importance as an application for crop fertility is significant. The micro-nutrient market is poised to grow at 8% CAGR to $7.7bn by 2020.
The world’s growing population base and a decline of arable land are causing food scarcity to become an increasing reality.
Experiments conducted in Brazil show that the addition of a small amount of manganese can increase crop yield by around 30%, and because of this characteristic, high purity, high grade manganese could fetch as much as 25-30% premium pricing at market.
SMART MONEY FOLLOWS BIG DEALS
Maxtech Ventures is a junior miner playing off of the momentum in manganese markets. Maxtech is focused two areas: building a vertical mining operation, selling its manganese into high growth markets focused on renewable energy and crop fertility.
As a Canadian-based mining company, Maxtech has a unique entry point; the company
has secured in excess of 540,000 hectares of potential high-grade manganese claims in Brazil and has an agreement to jointly explore manganese-specific projects with Brazil’s Maringá Ferro-Liga S.A.
Brazil is expected to increase its demand for high purity manganese by 4.8% CAGR. That will translate to an additional demand of 227,000 tonnes for use in fertilizers.
It stands to reason that as a local supplier with a major distribution partner, Maxtech should benefit greatly from this demand.
Maxtech has set its sights on a direct opportunity to move to the cash flow stage by tapping the fertilizer market locally immediately, then increasing its resource capacity to answer the growing power cell and storage markets.
Based on the acquisition of Glencore’s assets by the market leading Ferroglobe, the opportunities for manganese are likely to increase this year. Initiatives to expand production to answer needs in the EV market, as well as energy storage are advancing.
New applications for manganese are among the most promising.
Leading-edge lithiated manganese dioxide batteries (LMD) offer a safer, more thermally stable, and higher outputting rechargeable battery as opposed to their lithium-ion counterparts.
Manganese as a valuable battery material is on the move and finding a strong position with industry giants and junior miners alike.
POTENTIAL COMPARABLES
Ferroglobe PLC (NASDAQ: GSM)
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. The company was formerly known as VeloNewco Limited. Ferroglobe PLC was incorporated in 2015 and is headquartered in London, the United Kingdom. Ferroglobe PLC is a subsidiary of Grupo Villar Mir, S.A.
Glencore PLC (LSE: GLEN)
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, such as automotive, steel, power generation, oil, and food processing industries. 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.
Anglo American PLC (LSE: AAL)
Anglo American PLC is a global mining company. The Company has a portfolio of mining operations and undeveloped resources with a focus on diamonds, copper, platinum group metals (PGMs), and bulk commodities and other minerals. Its segments include De Beers, Platinum, Copper, Nickel, Niobium and Phosphates, Iron Ore and Manganese, Coal, and Corporate and other. De Beers is engaged in the diamond business. It holds interests in two copper mines: Los Bronces and Collahuasi in Chile. It has two ferronickel production sites: Barro Alto and Codemin. Its iron ore operations provide customers with iron content ore through assets in Brazil. It has metallurgical coal assets in Australia, and thermal coal assets in South Africa and Colombia. Under the Platinum segment, the Company has operations located in the Bushveld Complex in South Africa, with the exception of Unki mine on the Great Dyke formation in Zimbabwe. It holds interest in various other individual assets across the bulk commodities.
For a more in-depth look into MVT you can view the in-depth report at USA News Group: http://usanewsgroup.com/2017/11/30/cobalt-and-lithium-markets-projected-to-grow-due-to-the-demand-of-batteries/
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