While its easy to focus on the glamour projects - EV...

While its easy to focus on the glamour projects - EV manufacturing plants and Battery gigafactories these final manufacturing facilities are useless without a reliable source of inputs. These inputs involve both purified raw materials and processed inputs like foils, and precursor mix's. Creating purified materials requires sources of the unpurified product and the purification process. There's a lot of hidden elements to producing EV's and at the moment the supply chain into the EV's is less developed than plans for battery plants and EV manufacturing plants. While many gaps exist key gaps are lithium supply chains that don't involve China purification to battery grade, Graphite and HP Manganese.

The US department of energy (DoE) has been working through the supply chain for EV's and looking to award grants to help fill gaps. The goal being to get at least some participants creating non-Chinese supply for each part of the supply chain. One of the items in the supply chain that is currently problematic is high purity manganese. The commentary below indicates that 96% of world supply of HPMSM came from Chinese producers in 2023 and there were only two projects outside of China. One of these is in Belgium which aligns with the Eramet/Vibranz comments above.



https://mmta.co.uk/battery-demand-reshaping-the-manganese-market/
Battery demand reshaping the manganese market - MMTA

The NMC style of batteries needs HP Manganese. The evolution pathway LFP is heading which is to LMFP needs HP Manganese. The US will not have a China independent supply chain unless western supply chain sources of HPMSM (High Purity Manganese Sulphate Monohydrate) emerge.

The DoE is aware of this HP Manganese problem and that a solution is ideally needed in a short period of time. To help resolve this problem they have awarded a grant (not a loan) to E25. The potential award size was US$50m to US$200m so E25 has secured a grant at the upper end of the potential range. I'd note that DoE have also awarded a grant of the same size to S32 so they are punting on at least two horses hoping that at least one will get to the finish line. These are generous grants at US$166.1 and US$166m but the DoE has little choice because it needs Manganese to complete the supply chain. Multi-billion dollar projects requiring Manganese may well stall if they can't source a suitable supply of material. The two non-Chinese suppliers are not going to meet the world's demand for non-Chinese supply so new projects are required.

One of the alternative projects involves Vibranz and the French company Eramet as a source of material. While reliance on the French wouldn't be ideal, its better than reliance in the Chinese. The difficulty is if you look one layer deeper at where Eramet sources its Manganese from, you find that its from the African country G a b o n (I've no idea why HC dislikes this country but it always *'s). G a b o n is not the sort of country you want to build a critical supply chain around. It might be ok as a secondary source of supply but not a primary source. G a b o n is in the top third of countries on corruption indices and are a country with fairly recent civil war's and Military Coup's.

Projects like E25 that involve only Australia and USA as the ore source to the processing plant using a process confirmed in two USA labs and also has a conversion process with good carbon credentials start to look very appealing. Its still appealing even if it means backing a small ASX listed company and effectively gifting their shareholders a lot of money. MESC anticipates the awards would be complete by January 2025. Their estimation is also that 65ktpa of HPMSM capacity is sufficient for 260Gwh of battery capacity. Some forecasts are for 1,200 GWh of capacity by 2030. This indicates the USA HPMSM market size could be ~300ktpa by 2030. I'd also note that this capacity requirement would increase if high manganese LMFP emerges as a significant battery combination.