American Manganese Production "When & Why"
Once again I find myself wondering in print why there is little to no public outcry from mining writers or industry pundits (or politicians) regarding the fact that America (& Canada) have “NO” domestic mine operations in Manganese. As I have previously outlined since 2007 in numerous Manganese related editorials, we no longer have any Manganese mines of our own. We have a Steel Industry that is as high tech and as capable as any to compete on the world stage but still (since 1985) America must remain at the mercy of imported Manganese and mostly from not so friendly nations or supply disruptions due to electrical issues of developing countries such as China & S Africa and not accounting for the fact that China is already bargaining for Australian Manganese.
We constantly read of late how China controls 93% of Rare Earth production worldwide and all of the fears that little detail encompasses. Well, how about the fact that China controls approximately 97% of the world’s supply of Electrolytic Manganese Metal (EMM). People need to wake up to the fact that Steel cannot be made for today’s world without adding 20 to 25 pounds of Manganese per Ton of Steel, mainly for de-sulphurization and alleviating brittleness of many steel products, not to mention that Manganese is now replacing Nickel in many Stainless Steel products due to cost cutting factors.
Manganese is used in many forms and applications today and one of the latest is in Cathodes for Lithium-Ion batteries for Hybrid vehicles. This is one reason where I ask “Why” when many are so concerned with Lithium supplies (there are literally mountains of this mineral in Bolivia & Argentina as well as minable deposits in the US and Canada) that little to nothing is being said about Manganese. The battery use form of Manganese is Electrolytic Manganese Dioxide (EMD) and both EMD & EMM must be supplied or produced from raw Manganese ore produced by outside Nations. Over the past 6 years the annual demand growth rate for Electrolytic Manganese has been an astounding 26% per year, primarily due to the steel market and here we are almost totally dependant on China for all the EMM/EMD used by American industry.
Some reading this commentary will recall a previous editorial I penned that outlined the fact that Manganese is listed as a “Strategic Metal” by the US Gov’t. (excerpt from that commentary)
“On Jan. 7, 1987, Manganese was certified by the U.S. Dept. of State as a Strategic Mineral essential for the economy and defense of the United States that is unavailable in adequate quantities from reliable and domestic suppliers. The problem created by this unavailability is aggravated since there is no satisfactory substitute for Manganese among its major applications and it has itself now become a substitute in certain alloy applications due to new and innovative metallurgical discoveries.”
* The US Geological Survey also states: there are no substitutes for Manganese in its major applications – the manufacture of steel, steel alloys, non-steel alloys, batteries (alkaline), fertilizers and animal feed.
Just to add insult to injury, the US Gov’t adds a 14% Import Tax on EMM to compliment the 20% Export Tax China imposes. Now as any person in their right mind can see, we are immediately placed at a major disadvantage to China when it comes to the wide uses of Manganese in our domestic industries.
Here are a few more pertinent statistics regarding Manganese. (EMM/EMD)
- Manganese is the world’s 4th largest traded metal behind Iron, Aluminum, and Copper.
- Manganese consumption worldwide is roughly 30 Billion Lbs per year.
- Electrolytic Manganese production has gone from 660 Million Lbs p/yr in 2002 to 2.6 Billion Lbs p/y in 2008.
- S Africa & China both facing metal production decreases due to electrical power shortages.
- Worldwide Manganese demand has been growing by 8% per year. (approximately 1.5 B lbs)
- Worldwide Demand for Electrolytic Manganese by Industry = 47% for Steel, 32% for Aluminum,
14% for Electronics, 7% for Chemicals etc.
- Military applications for Manganese are huge but on the extreme side of the spectrum and seldom mentioned.
Newly discovered applications for Manganese are constant. A recent one being a process developed by Kyoto University in Japan to reproduce the photosynthesis process using Manganese Dioxide to absorb large quantities of Carbon Dioxide (CO2) emissions. If these Kyoto scientists are successful one can only begin to imagine what excitement there will be from the Global Warming crew and media. Manganese could very well play a historic part in our earth’s green future. Rare Earths aren’t the only metals to get excited about to my mind. Yes, they are an extremely important part of the new world in mineral uses/discoveries, but soon we will see Manganese come much further to the forefront of N American miners and media as it should.
There’s no shortage of Manganese in the world, in fact there’s an abundance of it. The problem lies in having to depend on other nations to supply it. China wants us to buy finished products not raw materials. Raw materials such as Rare Earth’s and Raw Manganese Ore are already banned from sales outside of China and products like EMM & EMD are highly taxed and WILL become unavailable if and when they decide. These are turbulent times and Americans (and Canadians) need their own “In Country” supplies of this wonder metal. China is a voracious dragon in the mix and there is no part of the world unnoticed and few counties untouched in their search to secure mineral supply thru partial or direct ownership of mines and resources. As I often tell those who live in complacency with regards to our mineral wealth, “Natural resource minerals are Finite, not Infinite.”
Anyone who doubts China’s intent w/ respect to Manganese in particular and not just the current Rare Earth supply worries, definitely needs to read the following Asia Times article from last June…
Manganese Skirmish Takes on Global Hue
By John Helmer: June 2 /09 Asia Times:
MOSCOW - The world of manganese mining is so small, concentrated and dependent on China that if there are disputes, the reputation of the trade can be swiftly and seriously threatened, especially among the Chinese.
China rules the world of steel - biggest producer, biggest consumer and until this year, biggest exporter. Manganese is vital to steel production because it is an alloy that hardens the metal for most industrial applications. So China also rules the world of manganese, whose source is concentrated in Australia and two southern African countries; http://www.atimes.com/atimes/China_Business/KF02Cb01.html
Further Comprehensive Reports on the Future of Steel & Manganese:
Steel and Manganese Prospects To 2012 http://www.laplaceconseil.fr/LaplaceConseil/htdocs/admin/upload/File/Steel%20&%20Mn%20prospects%20to%202012.pdf
View on The Future of The Global Steel Industry; http://www.laplaceconseil.com/LaplaceConseil/htdocs/admin/upload//File/New%20steel%20Paradigm.pdf
Consider the scenario if/when China finally gives in to western pressure and revalues the Yuan at whatever higher rate it deserves. Now you have an industrial power base that not only has major control over a huge amount of mineral resources worldwide, but our costs to buy their added value products goes up and at the same time their buying power of resources increases.
As I’ve stated, we are in very turbulent times in many different ways and now I can only wonder “When” America will wake up and see the future for Manganese mines needed at home and not just sit complacently & patiently watching for a bulk carrier ship on the horizon that, one day, may or may not, come at all.
We now have the U.S. RESTART Act of 2009 (Bill) recently passed which allocates grants and loan guarantees for Rare Earth mining/production as follows. ($1.25 Trillion Dollars) http://www.usmagnetmaterials.com/wp-content/uploads/2008/05/Restart-Act-Final-10-09.pdf
To authorize the re-establishment of a competitive domestic rare earths minerals production industry; a domestic rare earth refining, purification, and metals production industry; a domestic rare earth metals alloying industry; and a domestic rare earth based magnet production industry and supply chain in the United States.
AUTHORIZATION OF APPROPRIATIONS. – There are authorized to be appropriated to the Secretary to carry out this section a total of $1,250,000,000 for the period of fiscal years 2010 to 2014 for the purpose of establishing a domestic rare earth supply chain to support the national security and renewable energy needs of the United States.
Maybe it’s time the US & Canadian Governments took a long hard look at their domestic future needs for Manganese and light a fire under a Manganese project or two in the USA and Canada as there is great potential for that to become a reality even without a RESTART program. They’re out there I just can’t speak of them here. I hope I’ve sufficiently outlined and answered the “Why” part of this commentary title, now all that remains is “When”. That answer may be needed sooner rather than later.
“You can’t make steel without Manganese and if you can’t make steel, the world stops”
Quote by Brian Gilbertson, CEO of Pallinghurst Resources Ltd. and former CEO of BHP Billiton as quoted by Bloomberg, Sept. 17, 2009.
As Always: Thanks for reading;
Ken J. Reser
Research & Investor Relations Consultant
Office Ph: 403-844-2914
Disclaimer: Mr. Reser is an independent Mining Research and Investor Relations Consultant currently contracted to Molycor Gold Corp as well as Rocher Deboule Minerals. No fees were paid for the writing of this personal view commentary and as such it is not a recommendation to own or buys shares. He may own shares a/o options in said companies from time to time. He is not an accredited investment adviser and the opinions expressed are his own.