Investing in Manganese Shares: A Step-by-Step Guide
Manganese, a versatile mineral, plays a pivotal role in various industries beyond steel and EV batteries. Its applications extend to chemicals, making it an essential component in the transition towards clean energy.
In the current market, the EV battery industry stands as the second largest consumer of manganese. This trend is set to continue as several high-manganese rechargeable battery chemistries are expected to enter mass production in Q4 2023 and 2024. This potential surge could lift manganese prices from their current lows.
Manganese X Energy is one of the companies exploring this opportunity, with its Battery Hill manganese project in New Brunswick. The goal is to produce high-purity manganese for the North American market, aligning with the growing demand.
Meanwhile, RecycLiCo Battery Materials is recycling cathode materials from battery waste and upcycling them into lithium and battery cathode precursors. This circular approach not only addresses waste management but also ensures the sustainable production of critical materials for the battery sector.
The global manganese alloy market is projected to reach US$29.21 billion by 2030, driven by rising demand from the automotive industry and the Asia Pacific region. This forecast underscores the growing importance of manganese in the clean energy transition.
The long-term supply and demand of manganese are influenced by several key factors. The traditional steel industry's stable demand, providing a baseline, is counterbalanced by the rapidly growing EV battery production needs. Supply side factors, such as production capacity, regional concentration, operational disruptions, and the production of battery-grade manganese salts, also play a significant role.
Market dynamics and strategic positioning, regional geopolitical strategies, and critical raw materials regulations further complicate and enrich the manganese supply chain. Companies like Anglo American, ChemX Materials, Element 25, Giyani Metals, Euro Manganese, Firebird Metals, Jupiter Mines, Manganese X Energy, OM Holdings, and RecycLiCo Battery Materials are among those actively engaged in manganese production and recycling.
Investors are optimistic about the future of manganese, particularly in the context of lithium-ion batteries. Manganese is a component in the most common form of lithium-ion batteries, specifically nickel-manganese-cobalt (NMC) cathodes. Electrolytic manganese dioxide is also used as a cathode material in certain lithium-ion batteries.
Global manganese production reached 20 million metric tons in 2023, a slight decrease from 2022. Despite this slight dip, the overall trend points towards sustained growth, driven by the expanding EV market. Companies like Jupiter Mines, with operations in South Africa, are well-positioned to capitalise on this trend.
Efforts to recycle historical mining waste, such as Euro Manganese's project in Czechia, reflect a push for localised, sustainable supply chains. This approach not only reduces dependence on Asian suppliers but also enhances supply security for EV manufacturers.
In conclusion, the evolving landscape of manganese supply and demand is marked by the steady demand from the steel industry, the growing needs of the EV battery sector, and the complex interplay of supply conditions, market dynamics, geopolitical strategies, and regulatory factors. This shift, particularly the acceleration of EV adoption, is expected to increasingly direct manganese demand towards battery-grade material, while maintaining strong support from the steel sector.
Investors are showing interest in the future of manganese, particularly in the investing realm of lithium-ion batteries, as manganese is a key component in the most common form of these batteries, such as nickel-manganese-cobalt (NMC) cathodes.
In the coming years, the EV battery industry, which is the second largest consumer of manganese, is expected to continue its growth, potentially leading to a surge in manganese prices and increasing demand for high-purity manganese production, as companies like Manganese X Energy are aiming to do.
