© 2019 by Euro Manganese Inc.

 
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. Manganese is traded globally as ore, slag, ferromanganese, silico-manganese and in a variety of other forms, such as manganese salts, oxides and various purities of refined metal.  Europe, North America, Japan, Korea and many other countries import 100% of their manganese requirements as well as electrolytic manganese and manganese sulphate.  Manganese is a critical raw material to a multitude of industries, and large portions of the world economy depend on its reliable supply. 

Manganese is critical to the production of virtually every type of steel. This accounts for about 90% of annual manganese demand. On average, a tonne of steel produced contains 0.5 to 1% manganese, and some steel alloys can contain up to 15% manganese . The wide-scale and growing demand for steel makes manganese one of the most widely used elements in the world. Manganese is also used to make a

variety of specialty aluminum alloys, including aerospace materials and beverage can stock. Manganese is also used in welding powders, pigments, rust protection coatings, agricultural soil supplements and nutritional supplements. It is an essential element in maintaining human and animal health.

A notable function of manganese is in the storage and supply of electricity from batteries, including rechargeable lithium-ion batteries and non-rechargeable alkaline cells.  Manganese demand is rapidly increasing in the swiftly expanding field of rechargeable electrical storage, which enables safe storage of high-energy capacity – often recharged from renewable energy sources. Demand for high-purity manganese metal and high-purity manganese sulphate is expected to increase dramatically in the foreseeable future, driven largely by an expansion of electric vehicle production and grid storage devices capacity in Asia, Europe and North America. Variants of Nickel-Cobalt-Manganese (NMC) battery cathode chemistries are widely anticipated to be the dominant formulations in the rapidly growing market for electric vehicles.

"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 ENERGY MATERIALS

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 and 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.

LITHIUM ION BATTERY MARKET FORECAST

Global Battery Forecast

According to a market study prepared exclusively for EMN by CPM Group LLC, dated January 2019, lithium-ion batteries have recorded an extraordinary growth in demand: production of these batteries since 2010 grew at a rate of 25% per annum (CAGR), driven mainly for applications in electric vehicles (EVs). According to the CPM Group market study, demand for batteries for EVs is expected to grow at a CAGR of 35%between 2017 and 2027 and at a slightly slower rate (around 10% CAGR) for the period 2027-2040.

 

Most Li-ion battery chemistries are using manganese in their cathodes. Some require manganese in the form of Electrolytic Manganese Dioxide (EMD), but the vast majority require High-Purity Manganese Sulphate Monohydrate (HPMSM). 

 

Battery cell makers have a choice of either buying High-Purity Electrolytic Manganese Metal (HPEMM) and processing it to HPMSM inhouse, or to buy a readymade HPMSM from the third parties. CPM Group LLC expects that as the EV battery industry matures, purchases of HPMSM will increase and the demand for HPEMM will be lower from this sector, but for variety of reasons battery makers would still buy a certain proportion of manganese they require as HPEMM. CPM Group’s base case scenario for the year 2040, assumed 30% satisfaction of battery demand by HPEMM and 70% by HPMSM.

 

CPM Group’s forecast for manganese use in Li-ion batteries also includes other battery applications like Energy Storage Systems (ESS, grid-electricity storage, or renewable sources electricity storage) and consumer electronics. However, demand from batteries for EVs will account for about 84% of all manganese demand from the battery sector in 2037.

 

CPM Group and many battery experts like Cairn ERA expect the demand for manganese from the battery sector to grow over 80 times by 2037 (when compared to its use in 2017).

 

As indicated above, this demand can be satisfied by eitherHPEMM orHPMSM, or, most likely, by a mix of the two products. 

Manganese Demand from Li-ion Batteries

(NMC and LNMO battery chemistries only)

Source: Cairn ERA, CPM

  • Underlying the massive growth over the next ten years is the emergence of NMC as the primary cathode type for Li-ion batteries.

  • The capacity of batteries with NMC cathode chemistry is expected to grow from 13 GWh’s in 2017 to 58 GWh’s in 2020 and again to 389 GWh’s in 2026.

  • Other nickel-rich cathode chemistries, including Lithium Nickel Cobalt Aluminium Oxide (NCA) and Lithium Nickel Manganese Oxide (LNMO), both of which are also expected to see high growth.

  • The only cathode chemistry expected to decline in market size will be Lithium Manganese Oxide (LMO).

  • Other electrode chemistries, such as Lithium Iron Phosphate (LFP), Lithium Cobalt Oxide (LCO) and Lithium Titanium Oxide (LTO) are expected to see much more modest growth.

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 problems yet to be resolved (thermal instability and short life among others). Another problem worrying the makers on NMC batteries is the security of supply of cobalt and its price.

Battery Demand to 2040 by Chemistry

Source: Cairn ERA, CPM

​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 1/3rdof its weight (at mid-2018 metal prices).  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; hence the new designs like NMC-622, NMC-532 or NMC-811. The most cobalt efficient design yet is NMC-370 and NMC-271 announced in October 2018 by the German chemical giant BASF (both types have expected cobalt usage <5% and manganese use of 75%). BASF has not shared many details about this battery but is confident enough in its performance that it also announced the start of construction of the cathode material factory in Finland to be completed in two years.

 
ELECTROLYTIC MANGANESE
Electrolytic manganese is a refined manganese product created through the purification and electrolysis of a manganese-rich solution that is made by dissolving manganese carbonate ore or calcined manganese oxide ore. There are two primary forms of electrolytic manganese: Electrolytic Manganese Metal (EMM) and Electrolytic Manganese Dioxide (EMD).  
 

 

Electrolytic Manganese Metal (EMM) is principally traded in two specifications: 99.7% (selenium containing EMM) and 99.9% pure (selenium-free, high-purity EMM or HPEMM), with only about 2%of world production coming in the higher-purity form. Ninety eight percent of the world EMM production takes place in China, mostly via a process that uses selenium dioxide to modify the crystal structure of the electrodeposited metal and mitigate the effect of impurities that reduce electrical efficiency.  The use of selenium, a highly toxic element, results in lower production costs but also causes significant environmental impacts and is known to affect the quality of downstream products in manganese value chains, particularly for high-end applications such as lithium-ion battery production. High-purity EMM is sourced from South Africa and from China, where it is produced by a selenium-free process, which is attractive to demanding customers who require lower impurities and to those who prefer better health and environmental outcomes than those achievable with EMM containing selenium.  In addition to selenium, certain grades of EMM require the use of toxic potassium dichromate as a passivation reagent. 
Euro Manganese Inc. is targeting production of ultra-high-purity EMM with specifications exceeding the industry standard of 99.9% Mn, and using  a selenium and chromium-free process to ensure that the purity requirements for certain high-specification steel and aluminium alloys, used mostly in technologically advanced applications, can be met.
 

China is the largest producer and consumer of selenium and chromium-containing EMM, with most of the domestic production being used for the production of 200-series stainless steel, where the manganese substitutes the higher-cost nickel inputs. Chinese net exports of EMM have accounted for a relatively small portion of local production but can form a significant share of the global EMM market. Chinese EMM exports are also sold to customers in Europe, the Americas, Japan, Korea and elsewhere, where it is used for specialty steel and aluminum production, as well as welding powders.  Emerging markets are expected to account for an increasing proportion of manganese demand as value-added steel production capacity is developed, especially in countries such as India. Chinese EMM production is increasingly dependent on imported manganese carbonate ore, principally from Ghana.  Declining domestic manganese carbonate ore grades, much tighter environmental regulations, increasing labor costs and rising energy costs are expected to impact the cost of EMM production over the long run. 

 

EMD is the active ingredient of primary dry cell batteries, a mature industry that is expected to achieve moderate growth. EMD is also used to produce lithium-ion batteries that use Lithium Manganese Oxide (LMO) cathode chemistry, which are used mostly in electric bicycles and tools, as well as mobile phones, tablets laptops and cameras.

 
MANGANESE SULPHATE

High purity manganese sulphate monohydrate (HPMSM), generally having a 32% manganese content, and is a crystalline salt that has the very low impurity content required to produce high-quality lithium-ion batteries that use NMC cathode chemistry.  

HPMSM can be produced directly from manganese carbonate ore, synthetic manganese carbonate, from calcined manganese oxide ore or from HPEMM. Other grades of MSM are used for agricultural, medical and dietary applications that each require different levels of a suite of impurities.

 

Over the 25-year life of the Chvaletice Manganese Project, Euro Manganese expects to produce 1.19 million tonnes of HPEMM, approximately two-thirds of which would be converted into HPMSM.  The CMP HPMSM product is designed to contain no less than 99.9% manganese sulfate monohydrate (MSM), have a minimum of 32.34% manganese which exceeds the typical industry standard, will be sold in powder form, and will produced without the use of fluorine.