Manganese could be wiser pick than geopolitically problematic cobalt and pricey nickel

Manganese could be firming as a replacement for cobalt and nickel, with the electric vehicle industry’s needs a major driver.

Manganese is an essential ingredient in steel making, where it is used to harden steel and remove impurities from iron, like oxygen and sulphur.

That market accounts for more than 80% of end user demand, but increasingly manganese producers are looking to find a niche in supplying high purity stuff to the EV market, where the metal is a major component in long range nickel-cobalt-manganese batteries.

–

For the latest mining news, sign up here for free Stockhead daily newsletters

–

Fastmarkets reported that the price of 44% Mn ore closed at US$7.80/dmtu CIF China at the end of March 2022, a significant 39.3% increase from US$5.60/dmtu CIF China at the end of December 2021.

And the silicomanganese (SiMn) price increased from US$1,535 to US$1,775 per metric tonne CIF Japan.

The increase in price for manganese ore and SiMn was mainly attributed to the Ukraine-Russia conflict, with Ukraine a large exporter of manganese alloys in 2021.

But it’s still a lot cheaper than the other components in the NCM batteries, with nickel currently trading around $US28,400/t and cobalt at US$81,695/t.

A replacement for geopolitically problematic cobalt?

Bryah Resources’ (ASX:BYH) CEO Ashley Jones says while the main use is for steel making, the growing use is high purity manganese sulphate in battery cathodes.

“We think pricing and demand will increase as the world changes geopolitically,” he said.

“We believe the highest value futures is the change to electric vehicles, and manganese sulphate as a replacement for the more geopolitically problematic cobalt which mostly comes from the DRC.

“Elon Musk is chasing down manganese sulphate batteries, and at the moment, it’s not changing the market, but it’s definitely changing the focus for investors.”

Jones says the focus is definitely more ESG centred, and that supply chain security is more important than ever.

“Especially with what’s happening in Ukraine, people are getting more nationalistic in terms of looking at where their critical minerals supply chains are coming from.

“We’re seeing that with food security as well with wheat in Ukraine and vanadium and a few other minerals like manganese – it’s quite a big producer – which is having an impact globally.”

More manganese needed to meet EV sales forecasts

And manganese also has to keep up with projected EV sales, according to Black Canyon (ASX:BCA) executive director Brendan Cummins.

“If you look at the stats around EV sales, you’re looking at going from 3 to 5 million currently up to 60-70 million vehicles by 2040 – that’s a 20x increase in electric vehicles across the board,” he said.

“And manganese sulphate contributes to these vehicles. The nickel, cobalt, manganese chemistry accounts for about 70% of global sales and within those nickel cobalt manganese batteries, the manganese can be 10-30% of the battery, depending on the chemistry, which is 90kg depending on the vehicle.”

–

Visit The Australian’s Stockhead page, where ASX small caps are big deals

–

If a carmaker wants energy density, they’ll put more nickel in the battery – but if they want thermal stability, they have to add more manganese.

And it also comes down to cost.

“Manganese is a heck of a lot cheaper than the nickel,” Cummins said.

“Tesla don’t want to pay for the nickel or cobalt, so they’re strongly looking at manganese in their batteries going forwards.”

Aiming for ‘critical mass’ at Brumby Creek

Bryah recently wrapped up drilling at the Brumby Creek joint venture with OM Manganese, a subsidiary of manganese producer OM Holdings, and released a maiden mineral resource of 1.84MT at 21% Mn.

“Our stuff is a little bit different than from what other people have been bringing out to the market within the last few years,” Jones said.

“We’ve got quite a high-grade manganese. The cut off for our resource is 15, and you’ll see a lot of other resources come out with a cut off at seven or eight and they’re coming out with manganese resource grades of 11%.”

Jones says the mine could get into production in 18 months with the backing of OM, which wants product for its smelters.

“Manganese is a little bit about timing as well, the market does go up and down, so it’s about aiming your run rate and getting that at the right time,” he said.

“We need a few more tonnes to hit a critical mass, but I think we’re moving there quickly.

“We’ve got a partner who’s just finished mining, they’ve got equipment, they’ve got knowledge, they’ve got logistics all in place and we’re going to leverage off them to get this thing started.’

A 600% resource increase at Flanagan Bore

But Bryah isn’t the only one hunting a large resource.

BCA just announced last month it boosted resources by ~600% — to 104 million tonnes at 10.5% manganese — at the ‘Flanagan Bore’ JV project with Carawine Resources (ASX:CWX) in the Pilbara.

“We only drilled just over 4000m, so pretty good economy, and then we got 104 million tonnes at 10.5% manganese all from surface which is fantastic,” Cummins said.

“That just helps the economics as we look towards the scoping study.”

And Cummins says there are several other manganese targets that have only been partly tested or remain untested such as FB1, FB5 and FB6 “with the potential to deliver significant additional tonnage to the project”.

“We are by no means the largest but in terms of grade, I think with that core mineralisation – which is at surface outcropping at 33 million tonnes at 12.8% – is also something that distinguishes us from the rest,” he said.

Black Canyon is planning to complete a scoping study looking at producing a manganese mine with the majority of products sold to steel mills, but also with a portion for manganese sulphate.

“We’re looking at downstream, more of a vertical integration of the process from the pit to battery production in the long term,” Cummins said.

This content first appeared on stockhead.com.au

At Stockhead we tell it like it is. While Bryah Resources is a Stockhead advertiser, it did not sponsor this article.

SUBSCRIBE

Get the latest Stockhead news delivered free to your inbox. Click here