A Base Metal
No More….
+
The
fears about
Cobalt's viability in Lithium Ion Batteries were long only
price-oriented but now the most crucial fear is on strategic access
grounds
+
Increased
Manganese weighting in new LiB formulations is driving a refocusing
on the potential of this metal
+
Manganese in
not problematical due to its image of being "cheap" and "not
difficult" on the supply-side. These are in fact
its two main virtues
+
The wild
gyrations in Vanadium's price has made Manganese look like a
tempting option to replace, in part, Vanadium in Redox Flow Batteries for
mass storage
+
Lack of
Manganese production or resources in North America, makes the few
deposits that exist, interesting as crucial assets in the hunt for
non-Chinese supply chains for LiBs
-
Cobalt is down, but not out
for the count, as a Lithium Ion Battery component
-
There is a
perception that Manganese (somewhat like Nickel) is prolific and
thus "nothing to worry about"
Manganese
– The Road Less Travelled in Battery Metals
The pace of
change in the battery space has shifted
up a few gears
since a
small group of developers moved
into the
Manganese space in 2016/7. Lithium plays first
proliferated (and then came tumbling back to earth) and then Cobalt
became the word on everyone's lips as the Cobalt crisis moved into
centre stage and focusing minds on supply issues in the battery
space. Manganese was regarded as the
worry-free component of the Lithium Ion Battery formulations,
however this ignored the fact that there is almost no production of
the metal in North America.
Now, however,
the metal is receiving increasing
attention for its potential to reduce the Cobalt component in
various battery types using that metal via the rebalancing of the
relative weightings of elements in the battery cathode
formulations, particularly Nickel/Cobalt/Manganese in NMC
batteries.
A
Blizzard of Technologies
Battery
technologies have been proliferating in recent years like mushrooms
after the rain. Most of the buzz in the mainstream media is about
battery options that extend the life of cellphones or laptops and
other PDAs or with regard to hybrid- or all-electric vehicles.
However, the really great economic
leap forward has to do with mass storage devices which mesh with
energy grids to provide off-peak storage of electricity. Industrial
or natural gas has been stored since its inception in the
industrial revolution in massive tanks, caverns or gasometers,
while a solution to massive electricity storage has been much more
elusive. With conventional dry-cell battery using two electrodes
separated by an electrolyte, it would require thousands of
individual cells, the size of soft drink cans, to be strung
together in a massive installation to create a mass storage battery
of any usefulness to be attached the grid.
The relevance
of this has been heightened with the burgeoning of alternative
energy sources (wind and solar) that are irregular in their
generating periods and do not always coincide with peak
demand. While Elon Musk muses on
giving his auto-batteries a life-after-death as Powerwalls, the
real mass storage device
catching attention is Redox Flow Batteries (RFBs), with Vanadium (hitherto)
being the main beneficiary
of investor
enthusiasm. However, this has overlooked the different ways in
which Manganese can be mobilized for battery and mass storage
technologies.
A Case
Study: Manganese X Energy
Like many
other companies, Manganese X (TSX-V:MN,
OTC: MNXXF) was launched upon the tide
of the second Battery Wave in the middle years of the last decade.
Many of the other names, particularly in Cobalt and Lithium ended
up grounded, on the rocks or sunk.
Though
financing was almost non-existent across the swathe of battery
metal juniors, the management at Manganese X Energy battened down the hatches and
stayed the course. Now that a certain confidence has returned to
the broader mining markets it has had a firming effect on even the
battery metals. However, the emphasis has shifted.
Lithium still remains central to the LiB story
but
cobalt has
fallen into deep disdain.
The market cap
is
up, and financing more
available, enhanced
potential to
finally kick up the resource calculation, potential mine
development and moreover implementation of a demonstration
plant prompt us to
maintain
a LONG
stance on
Manganese X Energy with a 12-month target price of
$1.10.
Conclusion
The
issue at the root of all
this though is the availability
of metal supplies. Lithium seemingly has a supply situation with
little in the way of constraints for a long way out.
Cobalt though
is relatively scarce, moreover with the Chinese having cornered the
supply, as least as it pertains to the largest producer, the
DRC. With no current supplies of
Manganese in the US or Canada,
and battery-grade
Manganese
processing capacity
under
Chinese
control, the US ambitions in the EV
space are essentially at the mercy of China.
The US is
reduced to the status of a Manganese scavenger unless it has access
to not only non-Chinese sources of ore, but also, and more
importantly regional Manganese
Sulphate
(MnSO4)
sources.
With the
strategic stockpile starting to have EMM added
again, for the first time since
2004, there is clearly rising concern in Washington.
It needs a
complete North American supply chain.
Combined the
rise of EVs and the possibility of Manganese muscling in on
Vanadium's turf in the VRB space and the developers in the EMM
(mining) space are few and far between. Increasingly the hunt for
enhanced economics in EV production will mean that cheaper, more
secure and more efficient battery formulations will be required and
Manganese might well be the secret sauce to make EV economics more
palatable to the mass market.
Sector Review
Christopher
Ecclestone
See complete
research report at:
http://hallgartenco.com/pdf/Battery/Manganese_Batteries_Sept2020.pdf
© 2020 Hallgarten & Company,
Ltd. All rights
reserved.