EV Demand Sparks Revival of US Manganese Mining After Decades

  • In Business
  • 2022-10-04 04:42:18Z
  • By Bloomberg

(Bloomberg) -- South32 Ltd. aims to accelerate development of the first new US manganese mine for decades as carmakers rush to secure supply of the metal needed in electric vehicle batteries.

Most Read from Bloomberg

  • Trump Asks to Push Special Master Appeal Hearing to January

  • Elon Musk Sets Off Uproar in Ukraine by Tweeting His 'Peace' Plan

  • Credit Suisse Turmoil Deepens With Record Stock, CDS Levels

  • Stocks Rise From the Ashes in Best Day Since July: Markets Wrap

  • North Korea Fires Missile Over Japan for First Time Since 2017

Automakers are "super keen" to secure supply from the company's Clark Deposit in Arizona, which would become the only local source of the metal, Chief Executive Officer Graham Kerr said in an interview. "Probably the bigger challenge is can we get it to them quick enough?"

Demand for manganese from the battery sector is set to surge ninefold by 2030, the fastest growth rate of any of the industry's key metals, according to BloombergNEF. Prospects for production in the US are also being bolstered by efforts to reduce supply chain reliance on China under President Joe Biden's Inflation Reduction Act, or IRA.

Ford Motor Co. and General Motors Co. are among automakers aggressively adding new raw materials supply deals and seeking to accelerate development of local sources, stoking competition for commodities with rivals including Tesla Inc.

Read more: Joe Biden's Climate Bill Has the US Battery Industry Revved Up

South32's Arizona-mined manganese would be attractive to US carmakers because it would help them claim tax credits under Biden's IRA, Kerr said at the company's headquarters in Perth. The law, enacted in August, will grant credits for products with a percentage of materials extracted and processed in the US, or in nations that have a free trade agreement with Washington.

Discussions with prospective customers have included the potential to add refining in the US to deliver electrolytic manganese metal products, which would avoid the need to send raw materials to China or elsewhere for processing into specialist battery inputs, according to Kerr.

"It wouldn't be a high-end refinery from our side," he said in the interview last week. "It would be a relatively simple process."

South32 rose as much as 6.2% in Sydney trading Tuesday, outpacing gains in Australia's benchmark index.

South Africa, Gabon and Australia account for more than two-thirds of production of manganese, mainly used in the steel sector, and domestic output in the US -- which once had mines in states including Virginia -- ended in the 1970s. China currently dominates refining of the metal into materials used in the battery sector, accounting for 95% of manganese sulfate production capacity last year, according to BloombergNEF.

Development of the Clark Deposit at South32's Hermosa mine project could be accelerated under US legislation aimed at promoting fast development of clean energy and other infrastructure projects, Kerr said.

South32 has allocated $290 million of capital expenditure to work on Hermosa for the current fiscal year, including for a pre-feasibility study of the Clark Deposit. That work will examine potential plans for development and is expected to be completed this year, according to the company. The deposit contains an estimated 55 million tons of ore with a 9% manganese content.

The project may also be eligible for US government funding, Kerr said. US Energy Secretary Jennifer Granholm in July urged miners, including Australia-based companies, to explore potential support from agencies including the Department of Energy's loan programs office.

(Adds share price in 8th paragraph)

Most Read from Bloomberg Businessweek

  • Millions in Cryptocurrency Vanished as Agents Watched Helplessly

  • The Unstoppable Dollar Is Wreaking Havoc Everywhere But America

  • Maine Lobster Union Points the Way for Organizing Gig Economy Workers

  • Pfizer Needs to Prove It's Ready to Move On From Covid-19

  • As Home Prices Surge, Americans Are Moving to Cheaper Places

©2022 Bloomberg L.P.


More Related News

Geopolitical Rivalries Are Transforming the Contours of Trade
Geopolitical Rivalries Are Transforming the Contours of Trade
  • World
  • 2022-12-04 01:00:00Z

(Bloomberg) -- Reports of the death of globalization are looking greatly exaggerated.Most Read from BloombergLarry Summers Says Fed Will Need to Boost Rates ...

ECB's Chance to Guide Rate-Hike Views Won't Last Long: Eco Week

(Bloomberg) -- If European Central Bank President Christine Lagarde and her colleagues need to hone the guidance about their final interest-rate increase for...

Making EVs without China
Making EVs without China's supply chain is hard, but not impossible - 3 supply chain experts outline a strategy

Automaker GMC shows off its Hummer EVs at a plant in Detroit. Nic Antaya/Getty ImagesTwo electrifying moves in recent weeks have the potential to ignite...

Goldman Sachs Warns Traders Of Shrinking Bonus Pool Even As Trading Revenue Rises
Goldman Sachs Warns Traders Of Shrinking Bonus Pool Even As Trading Revenue Rises

Leading global investment bank Goldman Sachs Group Inc (NYSE: GS) recently announced a shrinking year-end bonus for traders, despite seeing its trading...

Ramaphosa Signals He Will Fight Back Over Cash-in-Sofa Scandal
Ramaphosa Signals He Will Fight Back Over Cash-in-Sofa Scandal

(Bloomberg) -- South African President Cyril Ramaphosa no longer plans to resign and will seek a second term as leader of the governing party, as he weighs...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Business