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BC mining and exploration off to a strong start after tumultuous 2022
Manganese batteries market may face deficit in 2024 RESHORING
T
| Local supply needed to feed North American EV supply chain
BY BRUNO VENDITTI
he high-purity manganese market may face tight supply as early as 2024, according to industry experts. An essential component of the steel-making process, manganese has played an increasingly significant role in the battery market. The metal sulphate is an important stabilizing ingredient in the cathodes of batteries widely used in electric vehicles and electronics. Volkswagen, Mercedes, Tesla, and GM are among the companies that have announced intentions to use high-purity manganese in their cars. A Chevy Bolt, for example, can contain over 24 kg of manganese. “The reason nobody is talking about manganese is that it’s very cheap, and it’s taken for granted,” says Andrew Zemek, special adviser at CPM Group. While the lithium price has skyrocketed over the last couple of years, passing US$80,000 per tonne and other metals like cobalt and copper reached over US$8,000 per tonne, manganese sulphate costs less than US$1,000 per tonne in China. But rising demand from the EV industry and the subsequent deficit of high-purity manganese might impact the metal price in 18 or 24 months, according to Euro Manganese CEO Matt James. “There’s been a build-out of manganese sulphate capacity in China and that has been enough to feed the current demands of the battery industry,” James said in an interview. “But going forward, we’re going to see significant growth in both the European and North American battery industry. Both of those will require their own supply chains.” “As the market looks to source locally, in North America because of the Inflation Reduction Act (IRA) or Europe because of geopolitics, when they start to look at the high-purity capacity in both of
| Sector seeing strongest ever government support, says AME CEO
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BY HENRY LAZENBY
H An electric vehicle battery. AdobeStock
those regions, it is very, very small,” James said. “The Chinese price does not reflect a western price. The price today in Europe and North America commands a significant premium,” he said . People in the industry estimate the price will hit US$3,300 per tonne by 2027 — growing to US$4,000 by 2031 for Europe and North America, considering the cost of freight from China and costs with green credentials. Reliance on China Over 92% of high-purity manganese sulphate conversion capacity is in China. Currently, only two plants outside of China are in production, one in Japan and the other in Belgium. Nippon Denko in Japan, uses imported ore, as does Vibrantz Technologies in Belgium, which produces high-purity manganese sourced from South Africa, Gabon, and Brazil. Combined, those two facilities produce around 5% of the global high-purity manganese sulphate. “I don’t see a risk of shortage in
the short term because so much capacity is being built in China,” said Aloys d’Harambure, executive director of the International Manganese Institute. However, the market might have to adjust as the United States and Europe moves to build their own supply chain of battery materials. “The environmental, social, and governance procedures in China are sometimes not as strict as in... European and North American and some African countries. The cost of high manganese sulphate that you see from China is not realistic from the rest of the industry,” d’Harambure said. According to Sam Jaffe, vice-president of battery storage solutions for E Source, China can always “blow out” the North American and European competitors if it chooses to do so. But that dynamic is changing. “As we move to intra-continental supply chains, China remains a huge factor in the high-purity manganese market, but it’s not the single determinant of where those See MANGANESE / 9
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igh interest rates, high inflation and reduced access to finance made 2022 a challenging year for the mineral exploration sector. But unofficial financial numbers point to a solid start in 2023 for exploration activity in British Columbia, says Kendra Johnston, the Association for Mineral Exploration B.C.’s president and CEO ahead of the organization’s annual Roundup event in Vancouver on Jan. 23-26. “Our numbers are going to be quite strong this year,” she said in a recent interview. “Last year, we hit an almost-high of $660 million spent in the field, which was $8 million behind our previous high.” Johnston notes that 2022 was marked by numerous financings for exploration before the market began to dry up. During 2022, rampant inflation raised the cost of running exploration projects. “We look at the price of fuel and the war that’s happening overseas, there’s political upheaval in Peru, and most recently, it seems like there’s constant political upheaval to some degree in the United States. There’s just a lot going on in the world right now,” Johnston said. “And it’s all overlaid by this conversation of the energy transition and the green future and the need for critical minerals that creates a push-pull dynamic of being able to get out into the field and explore for the critical minerals.” Although the costs of exploration, including drilling and helicopter costs, were up this year, and financing was hard to capture, Johnston noted that the indus-
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AME BC CEO Kendra Johnston AME BC
try has never before had all levels of government aligned on the importance of minerals and metals for the energy transition, and with that, public support for the See ROUNDUP / 5
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