Manganese on a Dual Path of Steady Growth and Rising Value
LOS ANGELES, February 13, 2018 /PRNewswire/ --
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While it continues to get attention for its use in green power technology, high-purity manganese appears to be on a dual growth path in both demand and value that also will help power food growth.
Companies on the supply side of manganese include Glencore PLC (LSE: GLEN), Ferroglobe PLC (NASDAQ: GSM), Anglo American PLC (LSE: AAL), and Maxtech Ventures (TSX: MVT) (OTC: MTEHF).
High grade, high purity manganese is used as a primary cathode material in lithium-ion manganese batteries or NCM batteries. Manganese of this kind is also used for many agricultural applications, mainly relating to the manufacture of fertilizer and new generation agrochemicals.
Miners that produce manganese have seen continued positive growth of global demand, followed by price increases. Majors including Glencore PLC (LSE: GLEN), a highly diversified company that produces significant manganese, Ferroglobe PLC (NASDAQ: GSM), a leading producer of manganese, and Anglo American PLC (LSE: AAL), a large miner of manganese worldwide, have all moved to expand manganese resources this year.
All producers are looking to acquire existing manganese resources, while one junior mining company is advancing manganese resources in Brazil through near term production. Maxtech Ventures (TSX: MVT) (OTC: MTEHF) is developing manganese with a prominent local distribution channel in place that could serve both the agricultural and technology markets.
GROWTH ON TWO FRONTS
When people think of the commodity markets, manganese doesn't typically feature high on the charts of star metals. However, as the world struggles with key disasters of climate shifts and an exploding population, manganese is one of the critical elements needed to design solutions.
With the world population set to surpass the 10 billion mark before the end of the century, the pressure on food resources will be higher than has ever been experienced.
At this point, current agricultural technology will hardly be able to meet the world's food needs. This has triggered a concerted effort by researchers across the globe to fund innovations aimed at increasing food production.
New generation of fertilizers will be key in this push, and manganese will be a major ingredient.
Among the solutions proposed by researchers include Foliar Blend developed by Sumitomo Corporation. This new fertilizer combines complex carbohydrates with essential plant micro-nutrients among them manganese.
Manganese plays an important role in photosynthesis in plants, and its deficiency leads to serious crop growth problems.
The type of manganese used in fertilizers is high-grade, since contaminants like arsenic and mercury are harmful to plants.
For example, Manganese has high demand in Brazil, because of the low manganese content of Amazonian soils. Soy beans, a major export for Amazonian states require high manganese content.
Production in the region is set to grow by 14.1% per year, putting manganese-rich fertilizer on a solid, continuous growth path.
Brazil is a good representation of conditions across the globe, indicating that global manganese demand for agriculture alone is expected to see strong increases over the next decade.
MINERS ARE MOVING ON DEMAND
The momentum surrounding manganese has sparked junior participation in this market including miner Maxtech Ventures.
Maxtech is in the unique position to participate in both segments: building a vertical mining operation, selling its manganese into high growth markets focused on renewable energy and crop fertility.
Canadian-based Maxtech has secured in excess of 540,000 hectares of potential high-grade manganese claims in Brazil and has an agreement to jointly explore manganese-specific projects with Brazil's Maringá Ferro-Liga S.A.
Brazil is expected to increase its demand for high purity manganese that should translate to an additional demand of 227,000 tonnes for use in fertilizers annually.
As a local supplier with a major distribution partner, Maxtech has a near perfect model to benefit from the increase in demand.
The company is planning to move to the cash flow stage by serving the fertilizer market locally immediately, then increase its resource capacity to answer the growing power cell and storage markets.
Manganese application in the manufacture of batteries has received more attention from commodity enthusiasts.
Electric vehicles, which are slowly taking over the roads, are heavily reliant on manganese as a battery component.
Tesla, the undisputed king of the EV revolution uses NCA and NMC batteries which both use high amounts of manganese. With many of the world's car manufacturers planning to switch to hybrids and all-electric vehicles, the demand can only accelerate further.
Tesla's stationary power storage generators, which are increasingly becoming a hit with national grid companies are also based on NMC battery technology, another avenue of manganese demand growth.
An even more manganese-dependent technology known as lithiated manganese dioxide is in the works. The technology, which is made of 61% manganese is said to be lighter and more efficient than lithium-based batteries.
Estimates suggest that 90% of manganese currently goes into the production of steel. And despite seasonal dips, the demand for steel keeps growing due to construction booms in emerging economies such as China and India.
With president Trump looking to institute a $1 trillion infrastructure plan, a demand surge in the US also seems likely, even if a bit protracted.
Overall, manganese demand has not been anywhere near that of other battery metals like lithium and cobalt, but it has still increased healthily over 50% since the beginning of 2016.
Indications are that manganese will take a dual path of growth, creating opportunity as it vaults into a valued commodity that helps both power and feed the future.
POTENTIAL COMPARABLES
Glencore PLC (LSE: GLEN)
Glencore plc engages in the production, refinement, processing, storage, transport, and marketing of commodities worldwide. It operates in three segments: Metals and Minerals, Energy Products, and Agricultural Products. The Metals and Minerals segment is involved in smelting, refining, mining, processing, and storing zinc, copper, lead, alumina, aluminum, ferroalloys, nickel, cobalt, and iron ore. The Energy Products segment activities include coal mining and oil production operations covering crude oil, oil products, steam coal, and metallurgical coal; and investments in ports, vessels, and storage facilities. The Agricultural Products segment engages in the farming, processing, handling, storage, and port facilitating of wheat, corn, canola, barley, rice, oil seeds, meals, edible oils, biofuels, cotton, and sugar. Glencore plc markets and delivers physical commodities sourced from its own production and third party producers to industrial consumers, such as automotive, steel, power generation, oil, and food processing industries. The company was formerly known as Glencore Xstrata plc and changed its name to Glencore plc in May 2014. Glencore plc was founded in 1974 and is headquartered in Baar, Switzerland.
Ferroglobe PLC (NASDAQ: GSM)
Ferroglobe PLC operates in the silicon and specialty metals industry in the United States, Europe, and internationally. The company offers silicon metals that are used in personal care items, construction-related products, health care products, and electronics, as well as used in the manufacture of silicone chemicals; silicomanganese, which is used as deoxidizing agent in the steel manufacturing process; and ferromanganese that is used as a deoxidizing, desulphurizing, and degassing agent in the removal of nitrogen and other harmful elements from steel. It also provides ferrosilicon products that are used to produce stainless steel, carbon steel, and various other steel alloys, as well as to manufacture electrodes and aluminum; silico calcium, which is used in the deoxidation and desulfurization of liquid steel, and production of coatings for cast iron pipes, as well as in the welding process of powder metal; nodularizers and inoculants, which are used in the production of iron; and silica fume. The company was formerly known as VeloNewco Limited. Ferroglobe PLC was incorporated in 2015 and is headquartered in London, the United Kingdom. Ferroglobe PLC is a subsidiary of Grupo Villar Mir, S.A.
Anglo American PLC (LSE: AAL)
Anglo American PLC is a global mining company. The Company has a portfolio of mining operations and undeveloped resources with a focus on diamonds, copper, platinum group metals (PGMs), and bulk commodities and other minerals. Its segments include De Beers, Platinum, Copper, Nickel, Niobium and Phosphates, Iron Ore and Manganese, Coal, and Corporate and other. De Beers is engaged in the diamond business. It holds interests in two copper mines: Los Bronces and Collahuasi in Chile. It has two ferronickel production sites: Barro Alto and Codemin. Its iron ore operations provide customers with iron content ore through assets in Brazil. It has metallurgical coal assets in Australia, and thermal coal assets in South Africa and Colombia. Under the Platinum segment, the Company has operations located in the Bushveld Complex in South Africa, with the exception of Unki mine on the Great Dyke formation in Zimbabwe. It holds interest in various other individual assets across the bulk commodities.
For a more in-depth look into MVT you can view the in-depth report at USA News Group: http://usanewsgroup.com/2018/01/21/manganese-potentially-the-most-important-energy-metal-needed-for-the-future-growth-of-clean-green-energy/
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