How this Czech high-purity manganese project could help the EU meet its EV battery goals
Euro Manganese is aiming to establish itself as a reliable and sustainable producer of ultra-high purity manganese products for the European electric vehicle battery industry.
By Jason Smith
The European Union (EU) is making a concerted push to electrify its auto industry as rapidly as possible. That drive has led to a parallel effort to localize its EV and lithium-ion battery supply chains.
One battery raw material of particular interest is high-purity manganese (HPM), an essential input in nickel-manganese-cobalt (NMC) batteries, which are increasingly in demand for EVs.
Derived from a highly refined form of manganese metal, the high-purity manganese sulphate (HPMSM) used to produce NMC batteries has exacting purity requirements that can be challenging and expensive for producers to meet.
As Andrew Zemek, a senior metal market researcher with CPM Group notes, "There's no shortage of manganese and there's no shortage of manganese sulphate. It's the supply of high-purity manganese that's constrained."
He continues, "High-purity manganese is not a commodity like Grade A copper. Purity levels are king, and environmental footprint is important, especially in Europe, where buyers are willing to pay a premium for products that meet their ESG requirements."
Meanwhile, European governments and regulators are raising their standards. Battery raw materials must meet increasingly stringent sustainability criteria. For cost, ethical and corporate responsibility reasons, automakers are anxious to engineer every gram of cobalt they can out of NMC batteries. Given this trend, demand for comparatively inexpensive HPM is expected to grow, both due to increasing NMC battery production and a growing percentage of HPM used in those batteries.
Sam Jaffe, managing director of Cairn Energy Research Advisors, follows the battery market closely. He projects that the battery industry's demand for high-purity manganese will increase at a ten-year compound annual growth rate of 33.6 per cent. That's the highest rate of growth for any battery material.
It's this confluence of trends that sets up Canadian company, Euro Manganese (TSXV/ASX: EMN), to capitalize, thanks to its centrally located, environmentally friendly Chvaletice Manganese Project.
"Chvaletice is the EU's only realistic opportunity for local, large-scale primary production of battery-grade manganese." — Marco Romero, President & CEO, Euro Manganese Inc.
A recycling opportunity, not a mining project
Chvaletice's location in the Czech Republic puts it at the heart of Europe's EV and battery supply chain. Importantly, Chvaletice is a recycling opportunity, not a mining project.
It is an old tailings deposit from a decommissioned mine that has been impacting the local area's water supply for decades. The deposit happens to contain Europe's largest manganese resource. By processing these tailings, Euro Manganese will produce an estimated 49,000 tonnes per year of HPM and, at the same time, help to remediate the site.
The proposed Chvaletice Manganese Project entails re-processing Europe's largest manganese deposit, hosted in historic mine tailings.
That production level would make Chvaletice one of the world's largest producers of HPM.
Euro Manganese's President and CEO, Marco Romero, notes, "Chvaletice is the EU's only realistic opportunity for local, large-scale primary production of battery-grade manganese."
The company built and operated a pilot plant in 2018, which confirmed that reprocessing the tailings can produce battery-grade manganese products that meet the specifications of the most demanding HPM customers, using proven, commercial technology.
Also, the fact that Chvaletice can produce HPM in such a sustainable way has attracted the attention and support of EIT InnoEnergy, a European Union-backed body focused on accelerating the development of the EU's sustainable energy and battery supply chains.
Environmental Studies: groundwater sampling at the Chvaletice site.
A critical agreement
In February, Euro Manganese inked a deal with EIT InnoEnergy that secures support to accelerate the funding and commercial development of the Chvaletice Project.
EIT InnoEnergy manages the European Battery Alliance, a group created by the EU that includes almost the entire EV/battery ecosystem. Its mandate is to support industry stakeholders in developing a robust EV and battery supply chain within the EU. Members include auto and battery makers, along with cathode, precursor, component, technology and raw materials companies.
EIT InnoEnergy will provide initial funding to assist with the project's feasibility study and the development of its demonstration plant, both targeted for completion in late 2021. It has also agreed to help the company secure up to €362 million in project financing.
Funding could come from a combination of Europe-wide and regional grant programs as well as European project finance and economic development banks.
EIT InnoEnergy has spearheaded some of the most important recent developments in the EV and battery sectors. It helped Northvolt, a battery company founded by two former Tesla executives, to secure €3.1 billion to build the EU's largest battery plant in northern Sweden. The Northvolt plant is scheduled to begin production next year.
Given that the EU is laser-focused on reducing its supply chains' environmental footprint, Chvaletice's status as a waste recycling project has no doubt been a selling point for EIT InnoEnergy, the European Union and prospective customers.
Romero elaborates, "We have a great opportunity at Chvaletice because we don't have to deal with any of the impacts of hard rock mining. We will simply be reprocessing waste and making essential raw materials for electric vehicles. There is no other opportunity like this in the world today."
Likely because of these environmental benefits, the Czech Ministry of the Environment has already completed a favorable initial screening on the project and greenlighted Euro Manganese to proceed with the preparation of its Final Environmental Impact Assessment.
Demonstration plant to come online in late 2021
In developing its pilot plant for Chvaletice, the company worked closely with leading Chinese experts involved in the country's HPM supply chain. Euro Manganese will continue to lean on their unmatched expertise as it builds out a demonstration plant on site. The demonstration plant is a seven-times scale-up of the pilot plant the company built in 2018.
Meeting in China.
"Since 2016, we have been fortunate to have a close technical collaboration with some of the most experienced designers and builders of HPM plants in China. Their hands-on know-how exists nowhere else in the world. China has entirely dominated this industry for decades," says Romero.
The plant will serve three purposes.
First, it will provide potential customers with multi-tonne samples for supply chain qualification. This process is key to product acceptance, as chemical, battery and auto makers demand consistent, sustainable and very high raw material purity from their suppliers. This is very challenging to achieve.
Not all manganese deposits are suitable for this purpose and the demonstration plant is expected to provide further evidence of Chvaletice's suitability, building on years of prior metallurgical test work, process design and engineering studies.
Secondly, as a small-scale but faithful replica of the main commercial plant, the demonstration plant will be a training ground for the local workforce that will eventually run the commercial operation.
Finally, the demonstration plant will serve as a research and development facility for projects that could help Euro Manganese seize new HPM market opportunities.
An exciting future for Euro Manganese and its investors
Looking ahead, the company is making progress on several fronts at the project level.
Permitting with the Czech Ministry of the Environment continues apace. Management is targeting the end of 2021 for submission of its Final Environmental Impact Assessment for Chvaletice.
That will be followed by a review process that includes the Ministry, local and regional governments and the public. So far, the company says the project has enjoyed good support from local communities.
Another key is the demonstration plant, which should begin production by early next year.
The Project's definitive feasibility study should also wrap-up within the next twelve months.
An artist rendition of the proposed Chvaletice commercial plant layout.
The EU, like the rest of the world, depends largely on Asia (and China, specifically) for most of its battery raw materials supply. China alone currently accounts for around 93 per cent of the global market share in battery-grade manganese products.
The Chvaletice Manganese Project has the potential to provide up to 50 per cent of projected European demand of high-purity manganese for batteries in 2025, and 28 per cent of anticipated 2030 requirements. The remaining demand will need to be satisfied by imported manganese.
If all goes according to plan and Chvaletice proceeds to full-scale commercial development, it would offer Europe a measure of self-sufficiency for its battery supply chain.
For that reason, Romero says he expects to find a receptive audience as he looks to secure further financial support and customer commitments for the project.
Recently, Volkswagen Auto Group, the world's largest automaker, announced its intention to move to high-manganese batteries with less nickel, and no cobalt, for its vast fleet offering of high-volume electric vehicles. The move is expected to significantly reduce battery production costs, while achieving performance in line with today's state-of-the-art batteries. It should also accelerate HPM demand, which could be a game-changer for Euro Manganese.
At its first Power Day event held earlier in March, Volkswagen announced that it is aggressively moving ahead with its electrification plans, including the construction of four additional gigafactories in Europe to meet its own EV battery requirements.
That's in addition to close to 50 new EV and battery manufacturing facilities already in the works across the continent, including a giant battery plant being built by Tesla in Germany, where it intends to use one-third manganese and two-thirds nickel in the battery cathodes for several of its most popular models.
"The Chvaletice Project's location in the heart of Europe puts it in an ideal position to become the biggest supplier of high purity manganese products to serve this once-in-a-century industrial transformation," says Romero.
As Euro Manganese proceeds with the Chvaletice Manganese Project, the company is in excellent financial health. On March 22, 2021, the company announced an AUD$30 million private placement offering.
In the announcement, Romero notes, "We now have the funds required to install, commission and operate our Demonstration Plant and to finalize our Definitive Feasibility Study and Final Environmental Impact Assessment."
He continues, "This financing will allow us to complete all site and technical work required for a final investment decision expected in 2022."
With the stage getting gradually set for the development of Chvaletice, and as EV battery demand and production accelerates in Europe, Euro Manganese appears to be in the right place at the right time.
Watch the latest project update below to learn more.
To learn more about Euro Manganese, visit their website here.
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