With respect to increasing Mn prices:While the bulk of the...

With respect to increasing Mn prices:

While the bulk of the world’s manganese alloy is produced in China and India in support of respective domestic steel production capacities, China’s diminishing primary manganese ore supply is typically of low grade and is insufficient to meet domestic demand, while India relies on imported manganese ore feedstock to augment constrained domestic ore sources. Declining Chinese manganese ore production is altering the supply and demand profile of manganese markets, with a clear opportunity emerging for production of lithium ion battery grade manganese products outside of China.

Falling domestic production, elevated extraction costs (on the back of stricter environmental regulations) and heightened demand is anticipated to sustain China’s growing reliance on manganese ore imports.

Demand for high purity manganese metal and high purity manganese sulphate is expected to increase dramatically in the foreseeable future, driven by growth in traditional end use markets but also a rapid expansion in electric vehicle production and grid storage devices capacity in Asia, Europe and North America. Nickel-Cobalt-Manganese (NMC) and Lithiated Manganese (LMO) battery cathode chemistries both contain significant amounts of manganese and are widely anticipated to be the dominant formulations in the rapidly growing market for electric vehicles and grid-storage.

Cost effective power sources in the form of wind and solar energy and inexpensive Butcherbird ore further enhance a strong case for first quartile costs of production. Electricity comprises a significant portion of EMM production costs, with the potential to leverage ~90% renewable energy in intermittent dynamic electrowinning (as opposed to an already strong base case of 100% natural gas – note a gas pipeline runs through the project) expected to exert downward pressure on E25’s cost base. Chinese producers are currently reliant on either high grade imported African ore or very low grade domestic ore on account of declining domestic production.