MANGANESE
MANGANESE
MANGANESE
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
battery industries.
High-purity manganese
sulphate Monohydrate
High-purity manganese
sulphate Monohydrate
High-purity manganese
sulphate Monohydrate
High-purity manganese
sulphate Monohydrate
High-purity manganese
sulphate Monohydrate
High-purity manganese
sulphate Monohydrate
(HPMSM >32.3% purity)
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The manganese product used by most lithium-ion battery makers
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Will account for approximately 2/3 of Chvaletice production
High-purity electrolytic manganese metal
(HPEMM >99.9% purity)
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Used by some precursor producers who prefer to make their own manganese sulphate solution
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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. The dominant Li-ion battery cathode chemistry used in EVs is nickel-manganese-cobalt (“NMC”), which accounts for nearly half of all Li-ion batteries produced, measured by megawatt hours ("MWh"). The amount of these metals can vary within the NMC family, such as NMC811, which is 80% nickel, 10% manganese, and 10% cobalt. With rising battery metal prices, battery companies are seeking ways to reduce the cost of batteries. As the least expensive battery metal, increasing the manganese content in batteries is gaining traction. Both BASF and Umicore have announced plans to scale up production of manganese-rich chemistries, with BASF's NMC370 battery, containing 30% nickel, 70% manganese, and no cobalt.
Additionally, high-purity manganese is now being added to lithium-iron-phosphate (“LFP”) chemistries, creating a new family of lithium-manganese-iron-phosphate (“LMFP”) chemistries with improved performance, with the manganese content of certain LMFP chemistries as high as 60%. Contemporary Amperex Technology Co., Limited ("CATL”), China’s largest battery producer and Tesla’s main battery supplier, has reported that they are planning to add manganese to their LFP chemistry, increasing the battery’s voltage, thus boosting its energy density by up to 20%.
In connection with the preparation of the Feasibility Study, the Company commissioned the independent research and consultancy firm CPM Group to provide an HPEMM and HPMSM (collectively described as "High-Purity Manganese" or "HPM") product market outlook study for the Project as follows:
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The market for HPMSM and HPEMM is forecast to be radically transformed as a result of the ‘EV revolution’. Most Li-ion batteries that power EVs are expected to use manganese in their cathodes and these manganese-containing battery chemistries are expected to dominate the battery market for the next two decades.
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CPM Group expects the demand for high-purity manganese to increase 13 times between 2021 and 2031 (from 90 kt to 1.1 million tonnes of Mn contained) and 50 times between 2021 and 2050 (to 4.5 million tonnes of Mn contained).
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The total Mn market in 2022 was approximately 22 million tonnes, with Mn use currently dominated by the steel industry, however, high-purity manganese suitable for the battery market makes up less than 0.5% of the global manganese market.
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The bottleneck in supply of HPMSM and HPEMM is the lack of high-purity refining capacity. Known expansions and new projects are unable to satisfy this demand. CPM Group forecasts the 2031 deficit to be 475 kt Mn equivalent. If battery demand continues to grow as expected and no additional new projects come to the market, the deficit would increase to 1 million tonnes by 2037.
GLOBAL BATTERY FORECAST
According to the International Manganese Institute, China retains its dominant position as a supplier of high-purity manganese products – more than 91% of the HPMSM suitable for the battery industry originating in China. However, 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.
The Company’s prospective customers 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.
In March 2023, the European Commission published the European Critical Raw Materials Act ("CRMA"), classifying battery-grade manganese as a strategic raw material and outlining targets for extraction, processing and recycling of critical raw materials within the European Union. Specifically, in order to reduce the European Union's reliance on a single supply country for certain raw materials, the CRMA would require that by 2030 no more than 65% of any strategic raw materials come from a single third country. The Chvaletice Project expects to deliver almost 50,000 tonnes of high-purity manganese metal per year when in full production, meeting approximately 25% of European demand and helping the EU reduce its trade reliance on this strategic raw material. In addition, the US Department of Treasury published a clarification to the Inflation Reduction Act on how manufacturers may satisfy the critical mineral and battery component requirements of the clean vehicle tax credit. Specifically, beginning in 2025 an eligible clean vehicle may not contain any critical minerals that were extracted, processed, or recycled by a foreign entity of concern.
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.
