Manganese is the twelfth most abundant element in the earth's crust. Currently, the bulk of the world’s production of manganese ore occurs in South Africa, China, Australia, Brazil, India and Gabon. While manganese is a common metal in many parts of the world, it is very rare in the European Union.
Manganese is an important raw material to a multitude of industries, and large portions of the world economy depend on its reliable supply.
High purity manganese products are essential raw materials needed by the EU’s fast-growing electric vehicle and lithium-ion battery industries. The term “High-Purity Manganese” (HPM) refers to a suite of highly refined finished products that are essential to most lithium-ion batteries. Its use and demand are increasing rapidly, particularly in Europe.
Europe, North America, Japan, Korea and many other countries import 100% of their manganese requirements, including high purity electrolytic manganese metal (HPEMM) and high purity manganese sulphate monohydrate (HPMSM), which are essential raw materials used in the production of lithium-ion EV batteries.
High-purity manganese products are essential raw materials
needed by the EU’s fast-growing electric vehicle and lithium-ion
(HPMSM >99.9% purity)
(HPMSM >99.9% purity)
The manganese product used by most lithium-ion battery makers
Will account for approximately 2/3 of Chvaletice production
High-purity electrolytic manganese metal
(HPEMM >99.9% purity)
Used by some precursor producers who prefer to make their own manganese sulphate solution
Will account for approximately 1/3 of Chvaletice production
Manganese demand is rapidly increasing in the swiftly expanding field of rechargeable electrical storage, which enables safe storage of high energy capacity - increasingly recharged from renewable energy sources.
MANGANESE AS A BATTERY RAW MATERIAL
Research and development effort into innovative materials for the manufacture of high performance lithium ion batteries have intensified in recent years. High-performance Nickel-Cobalt-Manganese (NMC) lithium-ion batteries are increasingly being used in electric vehicles and other energy storage applications. These batteries store more energy, take a shorter time to charge, last longer and are considered safer than other commercially available battery technologies. As a result, manganese has emerged as an important cathode material and is increasingly being used as a primary ingredient in the production of electric vehicle, electronic and grid storage batteries.
Due to factors such as reliability and the cost of raw materials, NMC battery chemistry is widely expected to be the dominant technology for producing electric vehicles in the foreseeable future. Early adopters of NMC lithium-ion (Li-ion) battery technology for electric vehicle (EV) batteries include, amongst others, Volkswagen, General Motors, Nissan, Fiat-Chrysler, BMW, Jaguar, Kia, Mercedes-Benz, Hyundai, Renault, Ford and Volvo.
The manufacturing processes and formulations for Li-ion batteries require reliable, high-purity manganese and other battery raw materials to ensure that the batteries meet increasingly demanding performance, safety and durability standards. They also require precision in battery cell assembly, ensuring battery chemistry is free of impurities. The introduction of microscopic metal particles or other impurities can trigger a short-circuit leading to malfunction, overheating and potential explosion. Some NMC cathode producers use nanotechnology to blend high-purity manganese, cobalt and nickel sulphates to prepare cathode surface coatings for lithium ion battery cathodes. The absence of harmful impurities and consistency of these materials is imperative in the high-quality NMC cathode manufacturing process.
The manganese raw materials for the precursor cathode materials of NMC batteries can be supplied in the form of high-purity manganese metal or high-purity manganese sulphate.
HIGH PURITY MANGANESE MARKET OVERVIEW
High-performance NMC Li-ion batteries are being increasingly used in electric vehicles (EVs) and other energy storage applications. In 2020, this battery chemistry accounted for nearly half of all Li-ion batteries produced, if measured by MWh. The manufacturing processes and formulations for Li-ion batteries require reliable, high purity sources of manganese and other battery raw materials to ensure that the batteries meet increasingly demanding performance, safety and durability standards. The high-purity manganese materials for the precursor cathode materials of NMC batteries can be supplied in the form of HPEMM and HPMSM.
Demand for high purity manganese products continues to increase rapidly around the world, driven by the overall growth of EV sales and the required lithium-ion batteries, as well as the increased use of manganese in each battery. In the second half of 2020 and the first three quarters of 2021, four major EV manufacturers -- Tesla, Volkswagen, Stellantis and Renault -- made public commitments to high manganese content-based batteries for their mass market vehicles going forward, causing a major upward revision of the demand projection forecasts for high purity manganese.
In the third quarter of 2021, industry analysts Cairn ERA and CPM Group updated their forecasts of total rechargeable lithium-ion battery demand, as well as high purity manganese demand, which is now expected to grow from 37,000 tonnes in 2020 to more than 900,000 tonnes in 2030. To satisfy this demand, the global production of high purity manganese products needs to grow more than 10 fold in just 10 years.
This is creating a growing forecast deficit gap between projected supply and demand.
Most European automakers are committed to using manganese in their batteries. Secure supply chains and ESG compliant sources of raw materials are extremely important to them. As the EU accelerates its green transition and promotes investment in the electrification of mobility, the OEMs are looking for locally sourced raw materials that are produced by environmentally and socially responsible suppliers.
Only certain manganese ores can feasibly and sustainably be used for the specialty, high end products of the battery industry. A critical factor is availability of the right quality ore in the right location. Carbonate ores, which are rare, are preferred for the production of high-purity manganese, although oxides can be used after roasting or chemical treatment using current commercial processes, resulting in a higher cost of reagents and energy, which can also cause environmental issues.
In the third quarter of calendar 2021, Cairn ERA and CPM Group updated their forecasts of total rechargeable (or secondary) Li-ion battery demand, as well as HPM demand, which is now expected to grow from 36,800 tonnes in 2020 to 780,000 tonnes in 2030. The supply/demand gap, both globally and in Europe, is illustrated in the charts below.
GLOBAL BATTERY FORECAST
According to the International Manganese Institute, China produced only 4.2% of the 2021 global output of manganese ore (down 28% from the previous year), while retaining its dominant position as a supplier of high-purity manganese products – more than 91% of the HPMSM suitable for the battery industry originated in China in 2021. China relies heavily on imported ore, mainly from South Africa, Australia, Gabon and Ghana. At present, only about 2.5% of HPMSM suitable for the battery industry is produced in Europe.
Prospective customers for Euro Manganese’s future production are increasingly interested in diversifying their strategic raw material sourcing and wish to promote the creation of independent, local supply chains, particularly in regions such as Europe, where the automobile manufacturing industry employs over 14 million people directly and indirectly and where the automotive companies have made strong commitments to the electrification of their fleets.
Europe is rapidly becoming a major hub in the global electric car and battery industries, with 7 battery cell gigafactories (defined as >1GWh/annum of battery production) in operation now. Local supply chains are being built in Europe and apart from the convenient logistics, companies located within the European single market benefit from frictionless trading and additional benefits (e.g. 5% EU import tariff on imported manganese sulphate monohydrate has been only temporarily suspended until the end of 2023).
According to announcements from the battery makers, by 2030 Europe should have 56 battery gigafactories, with more than 1,458 GWh of production capacity installed (30% of global capacity, second after China). CPM Group believes that the entire planned output of the Chvaletice Manganese Project can be consumed by the growing lithium-battery sector in Europe.
BATTERY CHEMISTRIES USING HPEMM/HPMSM
The NMC chemistry is further subdivided into categories named after the proportion of the three metals used: at present the dominant chemistry is NMC-111, in which Ni, Mn and Co are used in equal parts (by weight). Chemistries gaining ground are NMC-622, NMC-532, and NMC-811, nicknamed ‘the battery of the future’ as it carries a great promise of a long range for EVs (500+ km on a single charge), but at the same time presents many challenges yet to be resolved (thermal instability and short life among others). Another issue worrying the makers of NMC batteries is the security of supply of cobalt and its price.
The vast majority of production (and reserves and resources) of cobalt come from the Democratic Republic of Congo – a very unstable African country. In the currently dominant NMC-111 batteries, cobalt accounts for nearly 80% of the cost of materials needed to make a cathode, despite being only 1/3 of its weight. These two factors are driving the efforts of battery designers to ‘engineer cobalt out’ of the battery chemistry or at least significantly reduce its use.
The charts below illustrate how lower-cost EV battery chemistries are driving an increase in the proportion of high purity manganese content per KWh.