Is EMN’s manganese play set to have a major role in Europe’s EV future?

The most notable trend related to the transition to electric vehicles (EVs) over the last 12 months is the acceleration in electric car sales in Europe.

EV car sales in Europe now outstrip China and other Asian countries that have been active in developing lithium-ion batteries.

In a recent article published by The Driven, European auto market analyst Matthias Schmidt was referenced in relation to his European Electric Car Report for the seven months to July 2020.

Schmidt noted that during this period there were more plug-in electric car sales in Western Europe than in China, a country that in previous years had been considered the world’s largest electric car market by volume.

It should be noted China’s electric vehicle market is still strong. EV sales in China grew for the first time in 13 months in July 2020, due to a government extension of financial incentives and Tesla’s local production.

The China Association of Automobile Manufacturers reported sales of EVs last month jumped 19.3 per cent on the year to 98,000 units.

However, sales of EVs in Europe are projected to exceed one million units in 2020 and to grow rapidly in the years to come. Europe has increased its market share to 26 per cent, growing by 44 per cent since 2019.

Part of this growth can be attributed to Europe’s policy initiatives that have the overarching aim of making Europe climate neutral by 2050.

Government, corporates and consumers are all on board and focused on making the switch. Euro governments have introduced stimulus plans to provide momentum for electric vehicle adoption. This means tightening emissions standards and subsidies to drive consumer demand.

Over €24 billion ($39.1 billion) in investments in European EV and battery supply chains are underway right now, and the continent has emerged as a major EV production hub.

Furthermore, the likes of Shell has called on the UK to “make a bold move to ban petrol and diesel vehicles by 2030. Even Australia is being urged to follow in the UK’s footsteps to ban fossil fuel cars by 2035.

While we know lithium is a major driver of EV growth, high purity manganese is another battery metal that will play a key role in the transition.

EuroManganese (EMN), a $15 million capped company is capturing investor attention by developing a waste recycling operation to extract high purity manganese (HPM) products for the manufacture of lithium ion batteries.

These batteries are being produced in increasing quantities in Europe and EMN could be the only primary producer of these materials in this region.

Effectively, EMN will be waste recycling from historic mines, delivering high purity manga-nese to EU battery makers, whilst at the same time cleaning up what is currently a polluted site for the local community.

Put simply, EMN will be recycling waste to produce highly refined manganese metal and salts. These are the finished products that producers of lithium-ion battery cathodes require.

The company recently raised $C4.1 million ($4.2 million) and will be investing this to advance permit-ting and to continue advancing the project.

It also plans to get its demonstration plant (DP) up and running, which will showcase the quality of EMN’s manganese to customers. This is expected to cost $US2.5 million ($3.4 million), plus $US1.5 million installation and commissioning costs.

Most of the output for the first year of production has already been allocated to several Tier-1 customers, as a prelude to potential offtake agreements.

Of further note, the preliminary economic assessment of its Chvaletice manganese project (CMP) indicates the net present value after-tax of nearly $600 million.

EMN ideally located

The European location of the CMP is of high importance.

EMN noted that 30 battery and battery precursor and cathode factories, with no fewer than 25 electric car factories are already operating, under construction or have been announced in Europe recently. Europe currently imports 100 per cent of its manganese requirements.

Europe is expected to become the second most important centre (after China) of the global electric car and battery industries.

At least six large battery factories that will consume manganese inputs are located between 200 kilometres and 500 kilometres of the CMP. Others are being built across Europe.

Several prospective customers have expressed interest in procuring high-purity manganese products from the CMP, and in conducting supply-chain qualification of the products of the proposed Chvaletice demonstration plant.

EMN has already signed five memorandums of understanding with major customers, which are intended to evolve into long-term offtake agreements.

EMN has reported that these customers are attracted by the strategic European position of Chvaletice, by the incomparable environmental footprint of the project (no mining or new solid waste generation) and by the exceptional purity of the products that EMN has produced in previous pilot plant trials.

EMN sees the Chvaletice manganese project as becoming an important and environmentally-sustainable part of the international and European lithium-ion battery supply chain.

The company expects to become the only primary producer of high-purity manganese in the European Union, where 100 per cent of manganese requirements are currently imported.

That would be a significant achievement as investors begin to focus on the growth of the electric vehicle manufacturing and related battery industry,  especially as countries such as France and Germany become central to a multi-billion post-COVID Euro economic recovery based on sustainable action.

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