Euro Manganese to play “essential” role in European auto industry

Euro Manganese Inc (ASX:EMN) (CVE:EMN) (OTCMKTS:EROMF) (FRA:E06) is set to play a major role in the European auto industry’s efforts to electrify its fleet, with manganese demand to increase. Discussion around battery metals tends to focus on elements such as lithium, nickel and cobalt, but famed European carmaker Volkswagen flagged its intention to use high-manganese cathodes for the majority of its electric vehicles going forward, at its Power Day live stream on Tuesday. Volkswagen executives cited their lower cost and comparable range as reasons for the shift, compared with today’s state-of-the-art technology. The carmaker has bold plans to increase battery production in Europe, with the majority of those batteries being high-manganese, and it aims to own six battery cell factories by 2030. Euro Manganese CEO Marco Romero said its flagship Chvaletice Manganese Project could produce 50,000 tonnes per year. “High purity manganese is an essential raw material for batteries and will be required in the vast majority of European electric vehicles,” he said. “We have seen projected demand rise steadily over the past two years with current estimates pointing to a more than tenfold increase in global demand in 2030 compared to 2021.” Good timing Volkswagen’s announcement comes at the right time for Euro Manganese, which is busy developing its Chvaletice Manganese Project in the Czech Republic. Chvaletice entails re-processing a significant manganese deposit hosted in historic mine tailings, 90 kilometres east of Prague, and Euro Manganese’s hope is for it to become a leading and environmentally superior supplier of ultra-high-purity manganese products, serving the lithium-ion battery industry, as well as producers of specialty steel and aluminium alloys. The vast majority of mined manganese is used in steel production, but like all of its fellow battery metals, demand is rapidly rising for use in batteries. A mid-2020 report estimated the global market for manganese to reach 26.6 million tonnes by 2027. Demand in the European Union, which has strict targets it needs to meet and battery legislation on the verge of being modernised, is particularly high. Meeting European demand Few sources of manganese are suitable for the sustainable and economic production of high-purity manganese products and the demand for high-purity manganese products is growing rapidly. This is largely fueled by the Li-ion and electric vehicle (EV) markets, particularly in Europe where 100% of high-purity manganese products are imported. An announcement was made last week by the European Commission that it forged a €900 million partnership between Horizon Europe and the European Battery Alliance to foster research and innovation in the battery sector. Euro Manganese has worked closely with key global customers on product development and supply chain qualification and, based on the results of its pilot plant tests, it is confident that it can produce ultra-high-purity manganese products to meet demand. Investment locked in EIT InnoEnergy, the world’s largest sustainable energy innovation group, has made an initial €250,000 investment into Euro Manganese, with a further commitment to help it secure crucial funding for the Chvaletice project. It will also help Euro Manganese secure customer offtake agreements by leveraging its network of industrial partners, including the European Battery Alliance (EBA), for which it runs the industrial development program. EIT InnoEnergy CEO Diego Pavia said the potential of Euro Manganese’s Chvaletice project gave it the confidence it was backing the right horse. “It represents a unique opportunity for Europe to secure a measure of self-sufficiency in manganese, which is a critical battery raw material,” he said. “This project exemplifies the ideals of a sustainable, circular economy, by re-processing existing mining waste located in Europe, the project will have a much smaller environmental footprint than other existing sources of battery-grade manganese, which are typically mined and shipped from Africa, processed in China and then transported to Europe. “The project also stands to remediate the impacts of past mining activity by recycling industrial waste. These are significant environmental benefits. By fully integrating Chvaletice Manganese into the European battery value chain, we seek to strengthen the foundation of Europe’s green and electric future.” - Daniel Paproth