Australians set to charge into manganese battery space
Juniors are sitting out steel sector in the hopes of enjoying downstream windfalls
01 May 2024 Mining.News.net
Australia's manganese sector appears to be at an inflection point.South32's Groote Eylandt is offline for at least the rest of this year and probably into next year, and while the high-grade Woodie Woodie mine keeps going, OM Groups' Bootu Creek mine is done and dusted, while Element 25 has taken the decision to stop mining its Butcherbird operation.South32's pain has proven to be good for spot manganese prices, which have risen from six-year lows below US$3 per tonne in December 2023 to around $5 per tonne today, although they are still short of the $6.31/t high from April 2020.Groote Eylandt is the second largest manganese mine in the world, supplying 12% of all manganese demand.
Typically, the loss of such a major player would spark a rush into the market, both from swing producers and advanced direct shipping ore hopefuls, but that hasn't happened in Australia. Around 80-90% of all manganese is consumed by the steel industry, but according to industry veteran and new Firebird Metals managing director Peter Allen — Australia's "Mr Manganese" — that is set to change as more manganese is added to the chemical make-up of batteries, either as a key component or mixed in with nickel because manganese is much cheaper.
Differing strategies
Firebird and Element 25 are two of the most advanced manganese plays looking to tap into the emerging demand for manganese-rich cathode chemistries. Both have the same goals but different approaches, with Element 25 heading off to ‘capitalist' America and Firebird ‘communist' China. Allen was in China recently and told MNN there was a high level of interest in Firebird's plans to develop a high-purity manganese sulphate plant following a deal with state-owned China Chemical to collaborate on a plant at Jinshi in Hunan province. The aim is to position Firebird to capitalise on an expected change from lithium iron phosphate (LFP) to lithium manganese iron phosphate (LMFP) batteries. Reports suggest LMFP will replace 50% of the LFP battery demand by 2030, while blending with nickel-based batteries in China could reach 30% over the same period. The more traditional LFP cathodes have reached capacity, but with improvements offered by the LMFP chemistry, there's plenty of interest in next-generation batteries. Allen said there was around 3Mtpa of LFP capacity within 150km of the Jinshi industrial park. "Even if a fraction of conversion from LFP to LMFP is actioned, it will significantly exceed our production capacity," Allen said. Firebird is finalising a feasibility study for a 72,000tpa plant that could cost around $83 million to build and could produce 50,000tpa manganese sulphate and 10,000tpa manganese tetraoxide at costs Allen said should be some of the lowest in the world: $659/t. A pilot plant was constructed earlier this year to generate samples for potential customers and offtake parties and allow for the testing of other potential manganese-rich precursor cathode active materials. Allen said there was a "huge wave of demand" in China, and there were ready sources of the acids and reagents needed for processing."We think we will be the cheapest cost producer in the most competitive market, and we want to be in production in about two years," Allen said, "Our strategy is to catch the LMFP wave rather than joining mid-wave. "Firebird's longer-term plan is to develop a 100,000tpa plant somewhere in the West, potentially sourced from its Oakover project in WA. It could process third-party ore in the medium term and avoid the near-term need to plough capital into a new mine development.
Element 25 has already built, operated, and derisked its Butcherbird mine in WA, and it needs around A$50 million to increase capacity to around 1.1Mtpa.Its concentrate would be shipped to the US, where the government has added manganese to its critical minerals list and there are plenty of customers and incentives. Plans are being advanced to spend around $290 million to build an initial 65,000tpa manganese sulphate plant in Louisiana, supported by around $57 million in state incentives. It has offtake agreements with automakers General Motors and Stellantis, which have agreed to fund the plant to the tune of $115 million. Element 25 previously considered Malaysia for its first refinery, but US tax incentives — primarily Inflation Reduction Act funding — prompted it to change course. Managing director Justin Brown said the aim was to "design one, build many". As soon as the stage one plant achieves steady state, the company wants visibility on potential plans in Asia and Europe. Its resources in WA should support multiple trains with modest future investment.
The likes of Black Canyon and Resource Development Group are pursuing their own path. Black Canyon had advanced larger scale dense media separation studies for its Balfour project, with samples from the KR1 and KR2 deposits producing concentrate grades between 30-33%, an oxide product sought after in the high-volume medium grade manganese market segment. Black Canyon is finalising a 1.8Mtpa scoping study by the end of the quarter as it targets developing the Balfour field. Studies have confirmed that Balfour can also produce manganese sulphate, but Black Cayon is keeping its options open for both steel and battery sectors. It claims to have the second largest manganese endowment in Australia at 314Mt at 10.5%. The Balfour deposits are close to Butcherbird and the operating Woodie Woodie mine and should be able to grow with time given Black Canyon has only completed limited drilling. Resource Development Group is also quietly pursuing the same space and is developing a ‘micro-plant' to produce manganese sulphate from its 100%-owned Ant Hill/Sunday Hill deposits in WA for customer qualification. A commercial plant could be built at Port Hedland.
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