Elon Musk's new lithium-ion battery design sparks interest in manganese

Manganese has never really piqued the interest of investors like gold, lithium or even nickel despite being one of the most used metals in the world.

That perception might soon change.

Manganese has traditionally being linked to steelmaking with about 90 per cent of all manganese going into that sector.

The market for the metal has also been disrupted by the COVID-19 pandemic with Bryah Resources (ASX:BYH) managing director Neil Marston telling Stockhead that there are currently large stock piles in Chinese ports right now that have dragged on pricing to about $US4 per dry metric tonne unit (dmtu).

“However, as these stockpiles reduce back to normal levels, we would expect to see manganese ores trading above $US5/dmtu again in 2021,” he added.

The metals link to steel might be about to change with Tesla boss and all-round trailblazer Elon Musk recently unveiling an innovative new lithium-ion battery with a cathode that is 33 per cent manganese.

This has brought significant interest back into the metal with Marston noting that the price of specialty manganese products such as manganese dioxide should go up as battery demand grows.

Further support for this view came from Euro Manganese (ASX:EMN), which noted in its response to an ASX price and volume that Musk’s new battery design is expected to result in a material increase in high-purity manganese demand.

Here are what some of the ASX small cap manganese companies have been up to.

Exploration delivering manganese results

Bryah Resources’ recent reverse circulation drilling at its Bryah Basin Manganese JV project about 150km north of Meekatharra, Western Australia has intersected more potential direct shipping grade (+30 per cent) manganese.

Direct shipping refers to minerals that require only minimal processing such as crushing before they are exported, which keeps costs low.

Notable results at the Black Hill prospect include 4m at 31.1 per cent manganese, 4m at 35 per cent manganese and 2m at 36.3 per cent manganese, all of which start from surface.

Manganese mineralisation was also intersected in wide-spaced reconnaissance drilling at the Black Beauty and Chavel prospects.

Planning is currently underway for the resource drilling program that is expected to start in October or November.

“We expect to report some manganese resource estimates in the first quarter of 2021,” Marston added.

Bryah Resources (ASX:BYH) share price chart

Manganese project awaiting permits

Meanwhile, Element 25 (ASX:E25) continues to fast track the manganese concentrate export operation at its Butcherbird project near Newman, WA.

The company has lodged the Native Vegetation Clearing Permit, the Water Abstraction Licence and the Works Approval while approval for the mine access road design approval has been received.

Butcherbird has simple outcropping geology that allows for free-dig, low cost mining with simple mechanical beneficiation yielding a concentrate grading between 30 and 35 per cent manganese.

The project currently has an ore reserve of 50.6 million tonnes grading 10.3 per cent manganese.

Element 25 (ASX:E25) share price chart

Other manganese plays

Euro Manganese is looking to produce battery-grade, high-purity manganese products, including high-purity manganese metal from its Chvaletice project in the Czech Republic.

The project is a large anthropogenic deposit of manganese carbonate, contained in waste from an historical mining operation.

Gulf Manganese (ASX:GMC) is looking to develop a ferromanganese smelting business in West Timor, Indonesia, that will produce and sell medium and low carbon ferromanganese alloy.

The company is aiming to purchase and process more than 525,000 tonnes of manganese ore per annum to produce some 200,000+ tonnes of ferromanganese alloy, though operations are current on hold pending funding along with COVID-19 restrictions.

Jupiter Mines (ASX:JMS) has a 49 per cent interest in the Tshipi Borwa manganese mine in South Africa that produced a total of 840,469 tonnes of manganese in the quarter ended 31 August 2020.

The project delivered revenue of $154.1m during the quarter and net profit after tax of $51.5m.

OM Holdings (ASX:OMH) also has a 13 per cent interest in Tshipi Borwa and is earning up to 51 per cent in Bryah’s project.

It has already secured a 20 per cent stake in the Bryah Basin project through the funding of $1m in expenditure and has flagged its intention to increase its stake up to 30 per cent by funding another $500,000 of project expenditure.