Demand for High Grade Manganese Growing With EV Market

LOS ANGELES, November 8, 2017 /PRNewswire/ --

It appears that lithium is not the only metal to feel the pull of the Electric Vehicle market demand. The need for high grade, high purity manganese is also rising quickly.

Manganese companies on investors' radar as a result of this unique situation include Ferroglobe PLC (NASDAQ: GSM), Anglo American PLC (LSE: AAL), Glencore PLC (LSE: GLEN), and Maxtech Ventures (CSE: MVT) (OTC: MTEHF).

High grade, high purity manganese is used as a primary cathode material in lithium-ion manganese batteries (NCM batteries). The lithium-nickel-cobalt manganese (NCM) formulation of batteries is the slated as the next generation of battery cathodes after the lithium-nickel-cobalt-aluminum design (NCA) battery, and offers superior efficiencies, high power and low cost.

Large producers of manganese are adding production, but one smaller mining company is being highlighted for its efforts to vastly expand manganese resources in Brazil. Maxtech Ventures (CSE: MVT) (OTC: MTEHF) is already positioned for near-term production of manganese with an immediate path to local distribution.

International miners that produce manganese are experiencing positive growth of global demand 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 products.

MANGANESE: A SLEEPER 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; the remaining 10% is used in specialty chemical and agricultural applications.

But thanks to the newly added requirements for technology markets, Manganese is now one of several crucial metals headed for a tight supply crunch, a recently published report says.

After looking at projected demand for manganese and other minerals, the researchers believe that, "much more investment in exploration is needed for supplies to keep up."

Other metals listed as crucially needed in the future are cobalt, another component of lithium-ion batteries, and rare earths, which are used in high-performance magnets.

Indium, tellurium and gallium are also listed due to their use in solar power technologies.

The researchers point out that if nothing changes, lack of supply could cause prices for these metals to spike and lead to serious global challenges.

AUTO GIANTS ROLLING 

In answer to technology needs, battery and automotive manufacturing giants are developing their own NMC supplies and formulations.

Already 3M has patented its own NMC battery, which is used by LG Chem in the Chevy Volt and Nissan Leaf. BMW has also selected the NMC battery, while General Electric has selected a lithium-manganese battery.

GM has declared that its entire future in manufacturing is headed toward an all-electric vehicle fleet.

Tesla meanwhile has signed a five-year exclusive agreement with prominent NMC battery researcher, Dr. Jeff Dahn to help reduce the costs of its batteries.

All of this can really only mean that the supply for manganese, along with its star counterpart lithium, will continue to increase dramatically.

FERTILE MARKETS 

Manganese is also used in fertilizer and is a necessary nutrient. It cannot be substituted as it is needed chemically for photosynthesis to occur.

So, as an application for crop fertility, its importance can't be underestimated. The micro-nutrient market is poised to grow at 8% CAGR to $7.7bn by 2020.

With the world's growing population base and a decline of arable land, food scarcity is becoming 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.

Maxtech is expected to focus its energies squarely on these two areas: the company aspires to build a vertical mining operation, selling its manganese into high growth markets focused on renewable energy and crop fertility.

MAXTECH THINKS LOCAL AND GLOBAL 

As a Canadian-based mining company Maxtech Ventures has a unique vantage point to act on the manganese market.

Maxtech 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, translating to an additional demand of 227,000 tonnes for use in fertilizers.

Maxtech is in a prime geographical location to offer its manganese to the local producers in one of the world's leading soybean growing regions in Brazil.

As a potential local provider, with a local partner, it stands to reason that Maxtech should benefit greatly from this demand.

In this way, Maxtech Ventures has a direct opportunity to move to the cash flow stage by tapping the fertilizer market locally immediately, while growing its resource capacity to answer the growing power cell and storage markets.

The markets like this model of cash flow combined with significant growth potential.

The opportunities for manganese appear very positive. Initiatives to increase production to answer needs in the EV market, as well as energy storage are advancing. The price of pure manganese has risen to roughly US$2,800 a tonne, nearly double what it was in 2015.

While some companies are exploring for manganese in the US and elsewhere, data indicates that exploration is not keeping up with future demand. The US depends completely on manganese imports from other countries, since it has no producing mines and no official manganese reserves.

Notably Maxtech is one of very few publicly listed North American companies devoted to developing a pure manganese focus, and potentially the only one with near term production.

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.

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.

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.

For a more in-depth look into MVT you can view the in-depth report at USA News Group: http://usanewsgroup.com/2017/11/06/manganese-the-third-electric-vehicle-metal-no-one-is-talking-about-3-2/

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