Up to date on Manganese? No? We’ll forgive you.
Manganese might be the most in-demand material you have never heard of
Recently, Clare Hanna of research firm CRU Group told INN that there is, in fact, more than a bit of fervor surrounding the trace mineral that is increasingly in demand from the electric vehicle industry.
“It was only in Q4 that we started to see prices begin to come off the peak, and even then not everywhere,” she said. “The US market with its high dependence on imports and its higher preference for contract over spot purchasing has been insulated from the falls elsewhere so far.”
Manganese metal price rises in 2021 rose a whopping 217 percent. What’s behind the rise and how could an investor benefit? We called in an expert.
Martin Kepman is CEO of Manganese X (TSXV:MN) which intends to provide a secure ethically sourced manganese supply by exploring and developing its manganese rich deposit near Woodstock New Brunswick, called the Battery Hill Project. He brings us up to speed on what he calls “the forgotten mineral”.
Martin, can you tell us how Manganese X Energy came together?
In 2016, we purchased a Manganese property strategically located in Woodstock, New Brunswick, Canada. This property consists of 1228 hectares with 55 claims and is one of the largest manganese carbonate properties in North America. It is strategically located, 5 km (3 miles) from the TransCanada highway and 12 miles from the Maine border with access to the St Lawrence Seaway and Great Lakes shipping channels. It has excellent access to railways and electricity. We were forward thinking, definitely ahead of the curve, as we envisioned that a high purity low contaminant manganese EV cathode product would become an integral part of the upcoming EV revolution. Noting at the time that manganese was the forgotten battery mineral Taking this all into consideration, we developed our mission statement of “striving to become the first publicly traded mining company in Canada and the US to commercialize EV Battery high purity manganese. Our vision was, and still is, that manganese is vital to the future of EV Battery cathodes, and its use will help protect the planet, as manganese is now being recognized as integral to the most optimistically heralded battery technology for EV and other applications.
The company has drilled 53 holes totalling 9,697 metres over a total strike length of approximately 2.0 kilometres at the Woodstock Battery Hill deposit. On July 7th, 2021, the company announced its initial NI-43-101 compliant mineral resource for the project. Sensitivity analysis of the Battery Hill deposit to cut-off grade indicates 12.25 million tonnes of measured and indicated mineral resources at 8.77 per cent Mn and 10.61 million tonnes of inferred mineral resources grading 9.05 per cent Mn, utilizing a cut-off grade of 7 per cent Mn.
How exactly does Manganese fit into the clean energy and electric car movement?
Over the past 5 years of extensive R&D, along with our research contractor Kemetco Research, we achieved a milestone of producing a 99.95% high purity manganese sulphate monohydrate, with EV Battery compliant contaminant levels. This product is in demand as a precursor to the cathode in battery construction. It is important to note that our manganese ore is a carbonate as opposed to manganese oxide ore, utilized by the majority of world producers. The carbonate process, which we use, is more environmentally friendly when compared to the oxide process. The metallurgical extraction methodology is a very intricate process as the technical specs/standards for EV battery usage are extremely stringent. There are few other manganese companies able to achieve this high purity standard. Also note that there is a worldwide movement to eliminate internal combustion engines in the near future. We are committed to produce an end product that is environmentally green, one that will contribute to the containment of climate change.
Navigant Research has recently forecast that the market for Lithium-ion car batteries will rise from US$7.8 billion in 2015 to US$30.6 billion by 2024. How do you plan to capitalize on this trend?
Yes, this is an impressive growth trend, which experts project will continue well beyond 2030. We definitely expect to bring our Battery Hill project to fruition within this timeframe. We are presently in the process of completing our Preliminary Economic Assessment (PEA). This will determine the economic and commercial viability to produce our high purity EV Battery compliant end products. We have engaged Wood, one of the foremost consulting engineering companies, to complete our PEA in the very near future. In addition to Wood, we are working closely with Kemetco Research, another highly regarded metallurgical research firm, and, as a result, we are very confident we will achieve a positive PEA enabling us to move forward rapidly. As published in our October 12, 2021 news release, “Manganese X Energy continues to improve Battery Hill processing for scalable and cost-effective production of high-grade battery material critical for EV / stored energy markets.”
We have also developed a game changing extraction process This process means major cost savings and innovative flow sheet processes integral to our PEA and pointing to its very positive completion.
It is important to note that our end product, high purity manganese sulphate, will be in high demand with a supply deficit anticipated within the next year. Not surprisingly, there has been a major price increase: $1,145 per metric ton in October last year, has more than doubled to $2,505 this October (data from the Korea Mineral Resource Information Service) a trend that appears to be continuing. Experts are predicting the supply deficit to reach a 5 times supply shortage to meet demand by 2030.
We are already being contacted by interested parties inquiring about production; as a result, we are looking to accelerate our time frames. Our estimated time frame to complete our PEA will be in approximately between 60-90 days This will be quickly followed by a detailed feasibility study and commencement of the permitting process for development of the Battery Hill project.
Why focus on the Battery Hill manganese deposit in New Brunswick? What is the history of the region and what do you think is the potential?
See #1 plus #2 concerning the economic advantage of manganese carbonate ores. In addition, the Battery Hill project is strategically located to provide an ethically sound, secure supply source to the North American and European markets.
How do manganese enhanced batteries compare to cobalt?
Manganese is “the forgotten mineral”. The NMC (Nickel Manganese Cobalt) battery chemistry has been in existence for over 10 years. Cobalt made up approximately 60% of the price of the cathode. Reducing the cobalt content will bring big cost savings to battery manufacture.
The majority of cobalt comes from the politically unstable Congo employing child labour with inhumane working conditions. Not only is cobalt very toxic to the environment but its price fluctuates wildly. Our manganese production will utilize the highest standard of labour and other ESG practices. It is a well-known fact that EV manufacturers are trying to engineer cobalt out of EV batteries. For example, in September 2020, Tesla came out with a mid-level EV utilising one-third manganese and two-thirds nickel in its battery, notably making this vehicle more robust, density driven, able to go longer distances and, as well, more economical when compared to the cobalt battery chemistry.
The trend continues. In March 2021, Volkswagen debuted its EV models utilizing one-third manganese and two-thirds nickel battery chemistries and experimented with a combination of fifty percent Manganese and fifty percent nickel in its batteries. And, in September 2021, Stellantis, the merger of Fiat and Chrysler, started utilising Manganese/ Nickel chemistries in their batteries. Together, Tesla, Volkswagen and Stellantis, produce 16 million vehicles per year. Projections are that by 2030, 70-80% of their increasing number of vehicles will be EV. Also, in the USA, there are five giga factories for EV battery production with an additional 12 giga factories in the pipeline.
Graphano recently began trading in Canada. Why did you spin it out as a separate company from Manganese X?
To enable Graphano to focus on graphite exploration and development while Manganese X continues its manganese development and other interests.
In a report issued last year on Manganese X, Hallgarten and Company analyst Christopher Ecclestone said “Lithium seemingly has a supply situation with little in the way of constraints for a long way out. Cobalt, though, is relatively scarce, moreover with the Chinese having cornered the supply.” Do you think the political climate supports the exploration of Manganese in North America?
First of all, a dominant 90% of high purity manganese sulphate monohydrate precursor to the cathode (which we have already successfully prototyped in bench tests) is produced by China. It is obvious that there are major supply problems with China which will most likely continue. Containers from China have increased in price by three to four times with major delivery delays of 6 months or more and predictions are that these major shortages will continue for some time.
It is obvious that the world does not want to be held up by China and its dominance which creates a vulnerability in their controlling so much supply. It is also very obvious that in the near future, there are going to be major shortages of high manganese purity sulphate monohydrate.
In February 2021, the White House signed an Executive Order intended to strengthen and secure U.S. supply chains with various incentives to incorporate a Canada/ US mining supply chain in order to be less reliant on China. We believe Manganese X is very well positioned to take advantage of this situation and we are aiming to be the first publicly traded company in Canada and the US to commercialise production of high purity manganese materials.
We are also an active member of the Battery Metals Association of Canada whose purpose is to build a strong and enduring battery metals industry in Canada, as well as developing a Canadian supply chain. As well, we are a member of Propulsion Québec, Québec’s cluster for electric and smart transportation. Its team works to mobilize the entire sector around joint projects aimed at positioning Quebec as a global leader in developing and implementing smart and electric modes of ground transportation.
Who does Manganese X ultimately sell to?
Simply put, we will ultimately sell to any battery manufacturer, for EV or backup storage energy which requires a 99.95% high purity manganese sulphate monohydrate, with EV compliant contaminant levels. In addition, our market may also include agriculture, utilizing our product for animal feed and
Fertilizers. We have already signed NDAs with major worldwide cathode producers as well as a Major North American agriculture supplier.
What does your balance sheet look like? Will you have to go back to the market again for the cash to complete your business plan?
We are presently well-financed and are approached on a regular basis by various institutions wanting to provide additional financing. Upon successful completion of our upcoming PEA, we will evaluate our options. Obviously, putting a significant mine into production is a big endeavor, so ultimately the answer to your question must be “yes”. But we expect to do so only at share price levels well above where we are today.
What do you want to accomplish in the next twelve months?
Basically, our PEA will be completed approximately between 60-90 days which should confirm the economic and commercial viability of the Battery Hill project. This will be quickly followed by commissioning a feasibility study and commencing the permitting process required for the development of the Battery Hill deposit.
Disclosure: Managnese X is an annual sponsor of Cantech Letter