Manganese

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Curious about how to invest in manganese? Here’s a brief overview of the manganese industry, from supply and demand to how to invest.

Manganese is an important industrial metal. More than 90 percent of global consumption is closely tied to the steel and construction sectors, and China is a major user of the metal.

Despite its solid demand base, the manganese price has been a victim of volatility in the past few years.

In recent years, significant growth in manganese production in Africa paired with an increase in Chinese port stocks led to oversupply in the market, placing downward pressure on prices. During the early days of the COVID-19 lockdowns, manganese operations slowed production, leading to rebounds in the price of the metal.


Since then, China has seen a strong infrastructure-focused economic rebound, making demand from the Asian nation central to the outlook for manganese.

Read on for a closer look at manganese supply and demand dynamics, and for an overview of why the metal could be a compelling investment choice in the coming years.

How to invest in manganese: Supply and demand

As mentioned, the steel sector accounts for most manganese demand, using it as a deoxidizing and desulfurizing additive and as an alloy constituent. Among other things, manganese can improve the strength, toughness and stiffness of steel. In turn, the steel sector is a key driver of the manganese price.

According to a report from Research and Markets, the global manganese alloy market is projected to reach US$21.23 billion by 2027; its growth will be driven largely by “rising demand from the automotive industry and growing usage of steel,” but could be limited by factors like market volatility.

The electric vehicle (EV) battery industry represents the second largest consumer of manganese today, and many market watchers believe that demand from this sector could be set to increase in the future.

Manganese dioxide has long been used as a depolarizer in alkaline batteries, but this is not the manganese battery market that is now the most interesting. Attention is being drawn to lithium-ion battery chemistries that require manganese — such as lithium-manganese oxide batteries and lithium-nickel-manganese-cobalt oxide batteries.

In these batteries, electrolytic manganese dioxide is used as a cathode material. Many investors who believe that battery sector demand for manganese will increase are optimistic that lithium-ion batteries that require manganese will become more common in the future.

CPM Group Special Advisor Andrew Zemek told the Investing News Network he sees a huge deficit of high-purity manganese for the battery industry. “When we look at the project pipeline, it's very thin. There are very few projects which are close to production; there are a few more which are early stage exploration,” he said.

“The deficit is going to be so big that to fill it by 2030 the global production of high-purity manganese products, which is mostly the sulfate, will need to grow more than 10 times to meet that demand.”

While the steel and EV battery industries are the top consumers of manganese, other uses of manganese exist as well, with the metal turning up in chemicals and more.

Looking at supply, major producers have manganese-mining operations in Australia, Gabon, Ghana and China, as well as South Africa, which holds 80 percent of the world’s reserves. Global manganese production reached 20 million metric tonnes in 2021, an increase of 1.1 million metric tonnes from 2020, as per the US Geological Survey.

How to invest in manganese: Large and small stocks

Investors looking to jump into the manganese market may find it challenging to gain exposure to the metal. While a number of large companies are involved in manganese production, it is difficult to find major manganese producers that are not listed privately.

Major mining companies that have some exposure to manganese include: South32 (ASX:S32,OTC Pink:SHTLF), Eramet (EPA:ERA), Anglo American (LSE:AAL,OTCQX:AAUKF) and Vale (NYSE:VALE).

Investors interested in smaller manganese companies may want to look at junior manganese stocks trading on Canadian, American or Australian exchanges:

This is an updated version of an article originally published by the Investing News Network in 2017.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: American Manganese, Giyani Metals and Nevada Silver are clients of the Investing News Network. This article is not paid-for content.

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