Battery Tech Creating More Metals Shortfalls, Driving Prices Higher

LOS ANGELES, October 26, 2017 /PRNewswire/ --

USA News Group -The recent rush to fill the demand for lithium is having an unexpected side effect: other metals used in new battery and storage technology, especially manganese, are also seeing increased demand large enough to create a shortfall that could spike prices.

Companies in the manganese business that are capturing interest from the spark in demand include Ferroglobe PLC (NASDAQ: GSM), BHP Billiton Ltd (NYSE: BHP), Glencore PLC (LSE: GLEN), and Maxtech Ventures (TSX: MVT) (OTC: MTEHF).

While lithium is the marquee resource used in Li-ion cells for Electric Vehicles (EVs) and in green power storage applications, manganese is an equally vital battery component that is being sought after to fill the new demand.

Manganese is one of several crucial metals headed for a tight supply crunch, according to a recently published peer reviewed report.

After looking at projected demand for manganese and other minerals, the researchers concluded that "much more investment in exploration is needed for supplies to keep up."

International miners that produce manganese are gearing up to increase manganese production including Ferroglobe PLC (NASDAQ: GSM), a leading producer of manganese, BHP Billiton Ltd (NYSE: BHP), likely the largest miner of manganese worldwide, and Glencore PLC (OTC: GLNCY) (LSE: GLEN), which is highly diversified, but a prolific producer of manganese in its various forms.

And while the large producers of manganese are moving at a predictable pace, one smaller mining company is getting attention for its immediate moves to expand manganese interests: Maxtech Ventures (CSE: MVT) (OTC: MTEHF) is already positioned for near-term production of manganese in Brazil.

SHORTAGE ON THE HORIZON 

In a peer-reviewed paper, an international team of researchers led by Saleem Ali, professor of energy and the environment at the University of Delaware, warns of possible supply shortfalls for manganese and other commodities, particularly those with tech applications.

Manganese is primarily used in steelmaking, accounting for about 90% of all demand. It is also used in the lithium-ion and other battery technology suited to the new applications such as electric vehicles.

The paper lists South Africa and Australia as the primary suppliers of manganese imported into the United States for use in lithium-ion batteries.

The U.S. currently depends 100% on manganese imports from other countries as it has no producing mines. It also has no official manganese reserves.

While a number of forward thinking companies are exploring for manganese in the US and globally, the study shows that exploration is not keeping up with future demand. It also points to the fact that recycling alone will not be able to meet the significant demand either.

SHORTAGE OR NOT, MANGANESE RISING  

China's new automotive mandate to ban gas and diesel powered cars, together with expansion plans by automakers BMW, Mercedes, Volkswagen, Tesla, Volvo and others to dramatically increase EV fleets have sent the expected demand for lithium soaring. The cross-over effect is a direct draw on manganese and cobalt that gives rise to greater use.

Last year, South Africa was the top manganese-producing country globally, reaching total production of 4.7 million MT. Australia came in third place with total output of 2.5 million MT. Brazil placed fifth among world suppliers.

Several of the major producers of manganese are increasing their production and refining capabilities, but even they will not be singularly capable of keeping pace with added demands for manganese. Large producers also not sensitive to local markets with specific needs.

Whether this situation will lead to a shortfall of manganese will be shouldered by the efforts of the industry to increase supplies. In the meantime, manganese continues to rise.

The price of pure manganese has risen to roughly US$2,800 a tonne, nearly double what it was in 2015. The demand for electrolytic flake manganese used in batteries is now outpacing supply by about 25,000 MT.

MAXTECH VENTURES' SMART PLAY  

As a Canadian-based junior mining company Maxtech Ventures has a smart play on the manganese market.

Maxtech's leading project is a land package of manganese mineral claims in the State of Mato Grosse, Brazil. At roughly 540,000 hectares, the company's interest is expected to be one of the world's highest-grade, lowest-cost manganese operations.

Their announced target this year is a projected 11,500 tonnes of manganese, scaling up to full production and 80,000 tonnes per annum by 2020.

To further strengthen its prospects, Maxtech has entered into an agreement with Maringá Ferro-Liga S.A., a subsidiary of Grupo Maringá (the second largest manganese ferroalloy producer in South America) to enable the joint evaluation, exploration and potential acquisition of project specific manganese assets in Brazil.

Here's where Maxtech Ventures has an ace in the hole.

Manganese is also used as an excellent fertilizer additive. Its unique qualities can mean that manganese providers can look to earn up to a 25%-30% premium on average pricing for this application.

Maxtech is in a prime geographical location to offer its manganese to the local producers in one of the world's leading soybean growing regions in Brazil.

It seems that Maxtech Ventures could move quickly to the all-important cash flow stage by tapping the fertilizer market locally, while growing its resource capacity to answer the growing power cell and storage markets.

In perspective, the opportunities for manganese seem to be very positive. Initiatives to increase production to answer needs in the EV market, as well as energy storage are advancing. The producers and near-term producers of lithium are getting a lot of attention.

As one of a very select few public companies devoted to developing a pure manganese play, Maxtech Ventures presents a unique situation. Manganese and this developing situation will likely put the "must have" note on a lot of speculative investors list.

POTENTIAL COMPARABLES 

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.

BHP Billiton Ltd (NYSE: BHP)

BHP Billiton Limited is an international resources company. BHP Billiton Limited discovers, acquires, develops, and markets natural resources worldwide. It operates through four segments: Petroleum, Copper, Iron Ore, and Coal. The company explores for, develops, produces, and markets oil and gas in the United States Gulf of Mexico, Australia, and Trinidad and Tobago. It also explores for copper, silver, lead, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and thermal coal. The company was formerly known as BHP Limited and changed its name to BHP Billiton Limited in July 2001. BHP Billiton Limited was founded in 1851 and is headquartered in Melbourne, Australia. BHP Billiton Limited is a subsidiary of BHP Billiton Group.

Glencore PLC (OTC: GLNCY) (LSE: GLEN.L)

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. 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.

For a more in-depth look into MVT you can view the in-depth report at USA News Group: http://usanewsgroup.com/2017/10/23/why-outlook-has-turned-positive-for-manganese-2-3/

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