According to CLS.CN on 4th January, high-purity manganese sulfate, one of the key materials for batteries, could face a shortage as early as 2024 as the electric vehicle industry in the United States and Europe continues to grow and both countries seek to establish their own battery supply chains.
Manganese has always been an important part in the steelmaking process and is currently used primarily in the steel industry. And data shows that global manganese consumption exceeded 20 million tons in 2021, with more than 95 percent of that used in steel metallurgy. However, in recent years, manganese has also been gaining ground in the battery market, with manganese sulfate being an important stabilizing component in the cathodes of batteries that are widely used in electric vehicles and electronics.
Companies such as Volkswagen, Mercedes-Benz, Tesla and General Motors have all stated their intention to use high purity manganese in their automotive batteries. For example, a Chevrolet Bolt may contain more than 24 kilograms of manganese.
Andrew Zemek, special advisor to CPM Group, said, “The reason no one is talking about manganese is that it's very cheap and taken for granted.”
Manganese is much less expensive compared to other battery metals. Lithium prices have soared over the past few years to more than $80,000 per ton, and cobalt and copper are over $8,000 per ton. But in China, the main producing area of manganese sulfate, it costs less than $1,000 per ton.
Matt James, chief executive of Manganese Europe, warned that growing demand from the electric vehicle industry and the ensuing shortage of high-purity manganese could affect metal prices within 18 or 24 months.
“China is expanding manganese sulfate capacity and it is sufficient to meet current battery industry demand.” James said, “But looking ahead, we will see significant growth in demand from the European and North American battery industries, both of which need their own supply chains.”
He added that due to the Inflation Reduction Act in the U.S. and geopolitics in Europe, the European and American markets are looking to source important materials locally, but there is very little capacity for high-purity manganese in these two geographic areas.
According to James, “Prices in the Chinese market do not reflect prices in the West, and today there is already a significant price premium in Europe and North America.”
An industry insider estimates that, given the cost of transportation and green certification costs for importing from China, manganese sulfate prices will reach $3,300 per ton by 2027 and rise further to $4,000 per ton in both Europe and North America by 2031.
Currently more than 92% of the world's high-purity manganese sulfate conversion capacity is in China, with only two plants producing outside of China, one in Japan and the other in Belgium.
Vibrantz Technologies produces high-purity manganese in Belgium, with ore from South Africa, Gabon and Brazil. Nippon Denko in Japan also uses imported ore. These two plants produce about 5% of the world's high-purity manganese sulfate.
Aloys d'Harambure, executive director of the International Manganese Institute, said, "I don't think there is a risk of a shortage in the short term because China is building so much capacity." However, the market may have to start adjusting as the U.S. and Europe begin to build their own battery supply chains.
Harambure noted that while it is cheaper to produce high-purity manganese sulfate in China, this does not apply to other countries.
North America is expected to need more than 200 KT (200,000 tons) of high-purity manganese per year by 2031, but the continent does not currently have the processing capacity for high-purity manganese to feed the large number of battery plants and cathode plants under construction.
Australian coal and metals mining company South32 is developing the first new manganese mine in the United States in decades. In Europe, European Manganese is developing its Chvaletice project in the Czech Republic, the only sizeable classified manganese resource in the EU.
Both European and North American battery industries are growing at an alarming rate, and both will need their own supply chains in the future, including a manganese supply chain, according to Sam Jaffe, vice president of Battery Storage Solutions.
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