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Manganese is having a tough time keeping the market’s attention recently, with prices on a steady decline in recent weeks. Weathering the storm is junior exploration company American Manganese, which recently received a patent for its manganese extraction process.
According to Metal-Pages, China’s electrolytic manganese (EMM) market is lingering at 2009 levels, with the expectation that prices are still headed lower. EMM prices are down to RMB12,200-12,400 per tonne from a March price of RMB14,000.
Weak prices have resulted in Korean Steel company, POSCO, cutting its order for EMM flake. POSCO, who had originally ordered 3,000 tonnes of the material for June, however has scaled back the order to 1,200 tonnes as prices keep going lower. An industry source speaking with Metal-Pages explained that POSCO’s final price was $2,080-2,090/tonne CIF South Korea, “much lower than current mainstream export prices, which are in the range of 2,070-2,120/tonne FOB.” The insider commented that the lower prices indicate that POSCO forsees prices on a downtrend for the future.
Aiming to race itself against the falling manganese prices, American Manganese (TSVX:AMY) is looking to keep its Artillery Peak project in Arizona “alive and intact” CEO Larry Reaugh told AMM. The company is currently negotiating lease payments for the site, but is struggling, like many junior companies, in attracting financial interest.
“Like all of our peers, the market is not coming forth with any money for us. If you look at the TSX (Toronto Stock Exchange), shares of all these companies are trading for pennies. Our objective over the next year is to keep our project intact and alive. I expect we’re at the bottom of the market now and will see some improvements by fall.” Reaugh told AMM. The company is working to reconfigure the Arizona land package in order to reduce costs and streamline future endeavours.
American Manganese achieves significant milestone with patent
But despite current market conditions, American Manganese has put out some encouraging news in recent weeks. The company, which is looking to produce electrolytic manganese dioxide (EMD) or chemical manganese dioxide (CMD) from Artillery Peak project located in Arizona, recently received a patent for its manganese recovery process, which will allow it to economically recover low grade ore.
The patent for the recovery process is an important step for American Manganese who will now be able to recover manganese from a low grade resource with significantly less energy and environmental impact than conventional extraction methods. American Manganese partnered with Kemetco for research on lithium manganese oxide technologies in early 2011. To date the research has returned that the process can compete with other forms of EMM and EMD, yet maintain production in the lower percentile of costs.
Norman Chow, President of Kemetco Research explained in a statement that “[t]he hydrometallurgical process developed by the Company is capable of producing high purity electrolytic manganese dioxide (EMD) and chemical manganese dioxide (CMD) critical for improving performance and safety of high tech lithium ion batteries. The invention by-passes steps known to introduce metallic impurities when producing these materials using conventional mining processes.” Conventional processes to produce manganese dioxide for batteries can potentially contaminate cathode materials with metallic impurities, Chow explained. The impurities could result problems down the line such as internal short circuits.
The project is still sensitive to EMM prices, followed by operating costs and capital costs. Reaugh expects that it will be another two years before the market sees the recovery of EMM prices, however he is confident that American Manganese does not need to make the metal, only the dioxide for the battery industry. “”It only takes a small amount of energy to produce EMD, so that would save a lot of costs in pre-feasibility on supply installation, and we would have a reduction in free agents used, a reduction in mining size, a reduction in overall plant size.” Reaugh told AMM.
American Manganese is confident that the future is bright for EMD, and views the market as quickly growing, particularly with demand from electric vehicles.
Securities Disclosure: I, Vivien Diniz, hold no investment interest in any company mentioned in this article.
Editorial Disclosure: American Manganese is a client of Investing News Network. This article is not paid-for content.