Manganese, which has recently become an important battery metal, has now joined the list of 23 elements that have been placed on the Critical Elements list by the US Government.
Leading companies in the manganese space have experienced a dramatic rise in interest including BHP Billiton Ltd (NYSE: BHP), Ferroglobe PLC (NASDAQ: GSM), Glencore PLC (LSE: GLEN), and Maxtech Ventures (CSE: MVT) (OTC: MTEHF).
The US is at the forefront of many of tech innovations, but much of the critical materials used in their manufacture have to be sourced very expensively from foreign competitors. In order to reduce the country’s reliance on imports for these minerals, the US government is moving to increase local exploration and mining efforts.
The value of manganese has been under the radar to date creating further upside for investment in the now classified critical element.
International miners that produce manganese are already on a path to increase production including BHP Billiton Ltd (NYSE: BHP) one of the largest diversified mining companies mining manganese worldwide, Ferroglobe PLC (NASDAQ: GSM), also a leading producer of manganese, Glencore PLC (LSE: GLEN), a diversified major producer that includes manganese.
One interesting prospect in the field is gaining favor for its potential for near term manganese; Maxtech Ventures (CSE: MVT) (OTC: MTEHF). Maxtech is possibly one of the producers of new manganese resources based on its Brazilian prospects.
TRUMP SIGNS PLAN FOR 23 ELEMENTS
Recently, President Trump signed an executive order aimed at charting a plan to reduce reliance on foreign supply of critical minerals.
The president’s directive came following the presentation of the US Geological Survey’s report on the analysis of the country’s critical mineral resources which started in 2013.
The report, which is the first one of its kind since 1973, indicated that the US depends on China for 20 out of 23 critical minerals.
Speaking at the signing, Trump said that it the US should not continue depending on competitors like Russia and China for critical minerals that are sensitive to many pillars of the country’s economic wellbeing. These critical elements find application in all kinds of tech from smartphones to weaponry.
The 800-page report found that the US has significant deposits of most of the critical elements, but still continues to source them from oversees. Until 1995, the US was the largest producer of these minerals in the world, but the scale has since tipped in favor of China.
Market considerations are largely to blame for the US taking a backseat, with companies preferring to mine in countries where labor and regulatory costs are cheaper.
Interior Secretary Ryan Zinke who has been pushing for expansion of mineral activities on federal land believes that self-reliance with regards to critical minerals should be a top policy priority for the White House. Relying so heavily on imports from China, Zinke believes, makes the US vulnerable.
This new ruling bodes well for North American companies who can supply the critical elements and is seen as strengthening the minerals’ value as a group.
MANGANESE PLAYS IMPORTANT ROLE
Among the 23 minerals identified as critical, manganese is one of the leading battery metals that has joined the list.
Amid the push for renewable energy, battery technology to power everything from electric vehicles to industrial complexes, is at the center this revolution. That’s alongside lithium and cobalt which have critical applications in various battery configurations.
The growth of electric vehicle production, particularly Tesla which uses NMC (lithium-nickel-manganese-cobalt) batteries, has seen the demand for the metal rise significantly in recent years. With this growth in value having largely flown under the radar of big multinational mining companies, it is smaller companies that have been laying the groundwork, getting ready to capitalize.
Maxtech Ventures Inc. is one of these companies, with its core exploration operations based in Brazil. Maxtech is a Canadian-based junior mining company with a pure play in manganese.
The company has future outlook for markets in Asia, Europe and North America. Morocco also offers attractive exploration opportunities due to its proximity to leading manganese markets like Europe and Asia.
Maxtech’s lead project is a land package of manganese mineral claims in the State of Mato Grosse, Brazil. At 540,000 hectares, the company’s interest is expected to be one of the world’s highest-grade, lowest-cost manganese operations.
That positions Maxtech Ventures perfectly to produce manganese for its other major use: fertilizer.
Manganese has unique qualities that enable providers to earn up to a 25%-30% premium on average pricing for this application and Maxtech is in an ideal location to offer its manganese to the local producers in in Brazil.
Experts predict a tight supply crunch in the next few years that will see the price of the metal rise to unprecedented levels.
That comes with an advantage however. With the price high enough to justify exploration and mining costs, more junior mining companies will enter the fray for local manganese deposits.
Manganese has performed impressively over the last year, with its price jumping nearly 50%, although significantly lower than other battery metals.
High grade manganese, which has a plethora of industrial applications including battery production will be in high demand especially with manganese batteries becoming more and more common. The Tesla Powerwall, which is highly reliant on manganese, is just one of the innovations expected to push demand even further.
Currently, 90% of the world’s manganese supply comes from four countries, but Trump’s new directive may lead to discovery and development of significant deposits in North America and strengthen US based manganese players.
POTENTIAL COMPARABLES
BHP Billiton Ltd (NYSE: BHP)
BHP Billiton Limited is an international resources company. BHP Billiton Limited discovers, acquires, develops, and markets natural resources worldwide. It operates through four segments: Petroleum, Copper, Iron Ore, and Coal. The company explores for, develops, produces, and markets oil and gas in the United States Gulf of Mexico, Australia, and Trinidad and Tobago. It also explores for copper, silver, lead, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and thermal coal. The company was formerly known as BHP Limited and changed its name to BHP Billiton Limited in July 2001. BHP Billiton Limited was founded in 1851 and is headquartered in Melbourne, Australia. BHP Billiton Limited is a subsidiary of BHP Billiton Group.
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.
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. 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/2018/01/21/manganese-potentially-the-most-important-energy-metal-needed-for-the-future-growth-of-clean-green-energy/
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