July 2, 2017 | Last week’s other top-gaining TSXV stocks were E3 Metals, Yellowhead Mining, Garibaldi Resources and West High Yield Resources. … Read MoreGet Manganese Stock Investor Kits
Manganese is a brittle, hard gray-white metal that looks much like iron and is an essential additive to steel. The metal is also used for several other applications — dry cell batteries, aluminum cans, electronic printed circuit boards as well as fungicides and pesticides.
According to the International Manganese Institute (IMnI), about 90 per cent of global manganese is for producing steel and cast iron, for which no suitable substitute for the metal has yet been found.
In steelmaking, manganese is usually added in the form of a ferroalloy. This includes three grades of ferromanganese (FeMn) – one standard (high-carbon – HC) grade containing 65 to 79 percent Mn and 7 percent carbon, and two refined grades with medium-carbon (MC) and low-carbon (LC) – and silicomanganese (SiMn), which contains 60 to 77 percent Mn and around 2 percent carbon. Because it is indispensable in the production of steel, manganese is the fourth most-traded metal worldwide.
After steel, the battery sector is currently the second-largest consumer of manganese today. In addition, manganese is used in animal feed and fertilizers, colorants for various cosmetics, plastics and artists’ glazes, pigments for bricks, glass, paints tiles and textiles and water treatment chemicals.
Supply and demand
The demand for steel began to drop off following the recession in 2009 and has remained low since, mainly due to a slowdown in China due to tighter environmental regulation and a weak construction sector. However, the need for steel will always be there and the demand for manganese in particular is expected to increase, at least in certain countries.
The Indian Bureau of Mines put out its Manganese Ore: Vision 2020 and Beyond report in the fall of 2014, which explained that the country’s dependence on the metal is expected to increase marginally in coming years. The report warned that while the world may have global manganese resources in the billions of tonnes, proven reserves only stand at 540 million tonnes, meaning future global supply of manganese could be put under threat. India’s manganese production is expected to hover around 5 million tonnes by 2020, with demand forecast for 9 million tonnes per year. At that consumption rate, it means the country’s total reserves would dry up in 10 to 15 years.
While this lack of future supply could pose problems in the distant future, assuming that the proven reserves get used up, for producers and in turn, investors, this lack of immediate supply could be beneficial as it will allow for higher prices. In terms of where the global manganese supply is coming from, in 2014 South Africa took the number one spot as the top manganese-producing country with 4.7 million tonnes. It also has the highest recorded reserves and is sitting on 150 million tonnes. China came in second place, producing 3.2 million tonnes in 2014 and Australia followed closely behind with 3.1 million tonnes.
The US is one of the biggest consumers of this metal and with no indigenous mine at all, the country has to depend solely on imports. It has to rely on friendly countries and suppliers, many of whom may have to fulfill their own domestic consumption, leaving less for exports, thus hiking the prices. According to the US Geological Survey, manganese consumption in the US increased by 5 percent to 840,000 tonnes in 2014.
Innovative battery technologies
As mentioned, the second most-common use for manganese is in the battery sector and manganese oxides are currently used in the making of three types of batteries: alkaline, disposable lithium and rechargeable lithium-ion. Demand for the rechargeable lithium-ion batteries, which are used for powering electric cars, has made manganese oxide the fastest growing in the manganese sector.
Using manganese oxide as the cathode material in lithium ion batteries has results in the lithiated manganese dioxide (LMD) battery, which has higher capacities, a high energy density and a high life cycle. These LMD batteries were first used for power tools, but the success in that industry paved the way for the electric vehicle sector. Considering the growing popularity of both hybrid and battery electric vehicles, it also means the demand for manganese oxide will continue to grow.