Editor: Dave Jackson
If you don’t know a lot about high-purity manganese (HPM) and its strategic importance to the global economy and its powering of the New Green Revolution – specifically the electric vehicle (EV) boom – you’re not alone and this is the article is for you. And, you’ll learn a lot about a Company that stands to be at the forefront of sustainable production of this critical metal in its most refined form. Euro Manganese Inc. (EMN) (TSX-V.EMN, Forum) is a well-positioned company that is currently developing its Chvaletice manganese resource in the business-friendly jurisdiction of the Czech Republic. The Vancouver, BC-based company is focused exclusively on the development of a new high-purity manganese production facility, based on the reprocessing of a tailings deposit strategically situated in the heart of Europe. This would be critical metals production, without the adverse impacts of mining or the generation of new solid waste. About High-Purity Manganese (HPM) The world’s industrial and economic future will be closely tied to lithium-ion batteries and battery metals, and the fact is, the vast majority of lithium-ion batteries use manganese in their cathodes and require HPM. Manganese is extensively used in steel manufacturing and, increasingly so, the fast-growing EV industry. Fact is, by tonnage, the metal is the fourth most traded…just after iron, aluminum, and copper, but that is the commodity side of the business. What is little known is that the demand for the highly refined form of manganese metal and its related chemicals is what stands to grow dramatically, driven by surging demand from the lithium-ion battery industry. This is precisely what EMN plans to produce. As industry giants like Tesla shift to increased manganese usage in their batteries, companies like Euro Manganese surge. Until its announcement at their Battery Day on September 22nd, 2020, manganese did not feature materially in the vast majority of Tesla batteries. Their new Tesla nickel-manganese battery cathode will contain one-third manganese. This could be a game-changer for the HPM industry. While China produces very little manganese ore, it controls a huge part of refining and processing of the metal and its battery grade derivatives. Today, China produces around 93% of the battery-grade HPM in the world and largely relies on manganese ore imports from Africa for this industry. They then use the resulting refined manganese products for local battery manufacturing or export it to other parts of the world. Europe, North America, Japan and Korea, the key lithium-ion battery manufacturing centers outside of China, are 100% dependent on manganese imported ore for the manufacturing of their batteries. EMN stands to become Europe’s first and only primary producer of HPM. The Chvaletice Manganese Project is globally-significant and strategic for Europe. Euro Manganese Inc’s strategically located position in Central Europe cannot be underestimated. Like a robust real estate market, it’s all about location, location, location. And as the slide below indicates, EMN is in a prime neighborhood with easy access to some of the world’s biggest battery tech manufacturers and HPM consumers. Europe is going all out in developing its electric vehicle and lithium ion battery supply chains. Over €60 billion have recently, are currently or are planned to be invested in developing what stands to become a major global electric vehicle hub. All the European automobile companies are pushing ahead with major investments to electrify their fleets, including the Volkswagen Group, Daimler Mercedes, PSA, Fiat Chrysler, Jaguar-Land Rover, Volvo, BMW, and others. Several are also deploying major investments in battery and cell manufacturing as well. What remains to be seen is where are the required battery metals will come from, including lithium, nickel, cobalt and manganese. About the Company and the Chvaletice Project Euro Manganese holds 100% of the rights to Europe’s largest manganese deposit, located in the Czech Republic, ideally located amidst a major emerging cluster of EV, cathode, and battery plants. EMN’s stated goal is to become the supplier of choice of sustainably produced ultra-high-purity manganese products for the lithium-ion battery industry and for producers of specialty steel, high-technology chemicals, and aluminum alloys. Chvaletice is an environmentally unique resource development. The manganese resource is contained in three adjacent flotation tailings piles that were emplaced on flat terrain immediately below the site of a flotation mill site, adjacent to the former Chvaletice open pit mine. The tailings consist of sandy to fine greyish material containing approximately 7.3% manganese, mostly occurring as easily soluble manganese carbonate minerals. EMN plans to reprocess or recycle this waste and to produce exceptional quality products here, without the impacts of mining or any significant waste generation. It also expects to stop ongoing pollution of this former mine site and to remediate the site, leaving it in significantly better condition than it is today and in compliance with Czech and European Union regulations and standards. Infrastructure for the project is excellent. The proposed Chvaletice process plant will be located on industrial-zoned land, next to an 820 megawatt power plant, and a few hundred meters across the highway and rail line that runs along the south boundary of the tailings. Producing good quality HPM is challenging and not all ore types are technically, economically and environmentally suitable for the sustainable production of these ultra-high purity battery materials. EMN has been working for five years and invested over $25 million to bring its Chvaletice Manganese Project to its current, advanced stage of evaluation and development. It has fully drilled its resource – 98.3% of the resource is classified as Measured, under the NI 43:101/JORC 2012 codes. Details of the project’s mineral resource estimate, evaluation and planning, and PEA can be found here. The company has conducted extensive metallurgical test work, process design and engineering, and also built a successful pilot plant that confirmed the tailings can be converted to exceptional quality products, using conventional and commercially available technology. EMN has also completed over three years of environmental baseline and impact studies and, in June 2020, filed its Environmental Impact Assessment notification, triggering Chvaletice’s permitting process. It commenced the project’s feasibility study in late 2019 and recently announced that, following a successful $11.4 million equity offering, the company will immediately place the order for a Demonstration Plant (seven-times scale-up of the pilot plant) to begin producing multi-tonne samples for customers’ supply chain qualification. EMN is targeting commercial production by 2024 and expects to produce just under 50,000 of high-purity electrolytic manganese metal (HPEMM), two-thirds of which would be converted into high-purity manganese sulphate monohydrate. If it was in production today, Chvaletice would be the largest HPEMM producer in the world – over 65% larger than the next one on the list. Yet, by the end of the decade, Chvaletice will only be supplying a minor portion of the world’s demand, which has been varyingly forecast to reach between 500,000 and 650,000 tonnes per annum, excluding any incremental demand from Tesla for their recently announced nickel-manganese batteries. In the News: EMN CEO Marco Romero Comments on the US Election and its Effect on the Battery Metals’ Market “President Donald Trump and his administration were climate change skeptics, at best, and did very little to encourage EV sales. President-Elect Biden and a new Democratic administration can be safely expected to renew combat against anthropogenic climate change and to refocus the US Government on the decarbonisation of the American economy. This will no-doubt accelerate investment in renewable energy, electric vehicles and lithium-ion battery production. Given the scale of the US economy, the effects of this policy change on the lithium-ion battery supply chain will be global in scope. Joe Biden has also committed to rejoin the Paris Treaty on the day of his inauguration. The incoming Biden administration is also expected to invest lavishly in the deployment of a vast national network of EV fast-charging stations, to restore full EV purchase tax credits, and to tighten fuel consumption standards. This should result in a strong increase in US EV sales in coming years, fuelling further demand growth for battery raw materials like nickel, lithium, graphite, and high-purity manganese.” The Bottom Line Savvy metals & mining investors know more than just a good company when they see one – they see value, opportunity, and importance to world markets. In September alone, EMN saw its share price more than double on renewed interest in its Chvaletice Manganese Project and excitement about Tesla’s anticipated new HPM demand. Right now, one of the best ways to join the EV revolution is through investment in companies that are in a great position to extract and process critical battery raw materials, like manganese, where an existential squeeze is happening. It’s clearly the right space at the right time and Euro Manganese is in the final stretch of its plan to set the stage for the strategic and sustainable European production of these valuable high-purity manganese on a global scale.