Tesla's New Truck Adding to Battery Supply Chain Demand

LOS ANGELES, November 20, 2017 /PRNewswire/ --

The battery technology supply market got another push this week as automaker Tesla (NASDAQ: TSLA) unveiled its long awaited electric freight truck. News of the addition signaled further future supply demands on lithium and other battery materials, including the need for high grade, high purity manganese.

Several manganese mining companies are gaining interest as a result including Ferroglobe PLC (NASDAQ: GSM), Anglo American PLC (LSE: AAL), Glencore PLC (LSE: GLEN), and Maxtech Ventures (TSX: MVT) (OTC: MTEHF).

High grade, high purity manganese is used as a primary cathode material in lithium-ion manganese batteries (NCM batteries). The lithium-nickel-cobalt manganese (NCM) formulation of batteries is slated as the next generation of battery cathodes, after the lithium-nickel-cobalt-aluminum design (NCA) battery, and offers superior efficiencies, high power and low cost.

Large producers of manganese are moving on news of more demand, and one smaller mining company is gaining attention its move to expand manganese resources in Brazil. Maxtech Ventures (TSX: MVT) (OTC: MTEHF) is on track for near-term production of manganese with a promising revenue plan for local distribution.

Miners that produce manganese are seeing increased global demand and include Ferroglobe PLC (NASDAQ: GSM), a leading producer of manganese, Anglo American PLC (LSE: AAL), a large miner of manganese worldwide, and Glencore PLC (LSE: GLEN), a diversified materials company producing significant manganese products.

LITHIUM DEMAND PUSH ADDS WEIGHT 

In 2016, the top 13 battery makers boasted annual production capacity of 29 gigawatt-hours (GWh) of energy-storage products. By 2020, those same companies are expected to grow production capacity to 171 GWh, with Tesla's first Gigafactory representing 35 GWh.

That was prior to Tesla's new announcement to enter the freight game.

With the Semi, unveiled this week and due out in 2019, Tesla is promising a vehicle that can travel 500 miles on a single charge-enough to cover most regional freight deliveries-and is cheaper to operate than diesel trucks.

So the already heavy demand on lithium is now about to add a whole new layer that is pushing lithium and all battery materials suppliers into a near frenzy.

According to Frost & Sullivan, the global market for Li-ion batteries doubled to $22.5 billion in 2016 from $11.7 billion in 2012.

Suddenly other materials used in battery technology are becoming very attractive.

In answer to technology needs, battery and automotive manufacturing giants are developing their own NMC supplies and formulations.

Already 3M has patented its own NMC battery, which is used by LG Chem in the Chevy Volt and Nissan Leaf. BMW has also selected the NMC battery. General Electric has selected a lithium-manganese combination battery.

In fact, GM has declared that its entire future in manufacturing is headed toward an all-electric vehicle fleet.

Tesla meanwhile has signed a five-year exclusive agreement with prominent NMC battery researcher, Dr. Jeff Dahn to help reduce the costs of its batteries.

All of this can really only mean that the supply for manganese, along with its star counterpart lithium, are on a rising demand path that won't be slowed.

MANGANESE FOLLOWING LITHIUM  

Manganese is mined worldwide, but not in North America. Due to demand for innovation in battery technology markets, Manganese is now one of several crucial metals headed for a tight supply crunch, according to analysts.

Virtually all manganese production is used in the manufacture of steel with only about 10% used in specialty chemical and agricultural applications.

After looking at projected demand for manganese and other minerals, reviewers state plainly that much more investment in exploration of manganese resources is needed for supplies to keep up.

Other metals listed as crucially needed in the future are cobalt, another component of lithium-ion batteries, and rare earths used in high-performance magnets.

A leading report points out that if nothing changes, lack of supply could cause prices for these metals to spike and lead to serious challenges in battery development.

MAXTECH VENTURES READY TO GO 

The junior Canadian-based mining company Maxtech Ventures has taken a stealthy tact to enter manganese market.

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 by 4.8% CAGR, translating to an additional demand of 227,000 tonnes.

Brazil is one region that relies on manganese for use in fertilizers and Maxtech has located its mining prospect in a perfect geographical location to offer its manganese to the local producers in one of the world's leading soybean growing regions in Brazil.

As a potential local provider, with a local partner, it stands to reason that Maxtech should benefit greatly from this demand.

Maxtech's smart move is to move directly to the cash flow stage by tapping the fertilizer market locally immediately, while growing its resource capacity to answer the growing power cell and storage markets.

Investors looking at innovation like the fact that Maxtech can be producing revenue right away, but maintains the significant growth potential of supplying battery technology markets.

The opportunities for battery supply chain materials appear very positive and are increasing with each new announcement from automakers and power supply innovators. Initiatives to increase production of lithium and manganese to answer needs in the EV market, as well as energy storage are advancing. And that's driving demand and pricing.

As an indication, pure manganese has risen to roughly US$2,800 a tonne, nearly double what it was in 2015. Lithium is soaring.

Companies are exploring for manganese in the US and globally, but data shows exploration is not keeping up with future demand. The US depends 100% on manganese imports from other countries. At present there are no producing US manganese mines and no official manganese reserves.

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.

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.

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.

For a more in-depth look into MVT you can view the in-depth report at USA News Group: http://usanewsgroup.com/2017/11/19/manganese-the-third-electric-vehicle-metal-no-one-is-talking-about-3-2-2-2/

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