Categories: Base Metals / Energy / General Market Commentary
Topics: General Base Metals / General Energy / General Market Commentary

Manganese - the third electric vehicle metal no one is talking about

Manganese – the third electric vehicle metal no one is talking about

 

A Brief Manganese Primer

Highlights

• Manganese is a critical and irreplaceable element used in steel production;
• The steel industry is poised to continue growing, providing a steady source of demand for manganese;
• Significant additional upside will come from clean-energy applications;
• Vertically-integrated companies will be primary drivers of the forward momentum in the manganese industry, which at this point is concentrated and in need of disruption.

Lithium and cobalt have been on an absolute tear, riding the wave of Tesla and the broader electric revolution. There is another metal, however, used widely as a battery component that has received less notice from the markets. That metal is manganese (Mn), a chemical element that is normally found together with iron.

 

Introduction – Manganese Is Critical

Manganese is an essential ingredient in steel. And according to the US Geological Survey’s (USGS) Mineral Resources Program, the United States is completely dependent on manganese imports; it has no production facilities of its own. The US needs about 500,000 tons (1.1 billion pounds) of manganese per year, the majority of which is consumed by the steel industry.

Acutely aware of this situation, and the fact that most of the world’s manganese is produced by just a few countries (some of which are risky jurisdictions), the USGS has deemed manganese a “critical mineral.” A critical mineral is one defined as being essential to the economy, as well as being at significant risk of incurring supply interruptions. The USGS has also singled out manganese because of its importance due to its increasing use in emerging technologies.

Solid Growth In Demand

In steel production, manganese serves the important function of removing oxygen and sulphur when iron ore is converted into iron. It is also used as an alloy that increases both the strength and flexibility of steel. In ore production, about 30% of the manganese is used to refine ore and about 70% is used as an alloy in the final product.

Manganese is not on the radar of many investors, but it is widely used in metallurgy. In fact, it is the fourth most commonly used metal by tonnage – after iron, aluminum, and copper. And during the past ten years, the world has generally produced increasing amounts of steel every year.

Between now and 2020, the International Manganese Institute projects that the global steel industry will continue growing at a clip of about 2% annually.

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