Mesa Minerals Limited
EMM Market Context


Overview

The pricing prospects for high purity electrolytic manganese metal (EMM) are in the main the same as those for high purity electrolytic manganese dioxide EMD. On the demand side, the end uses of EMD (namely specialty steels, Mn3O4 for magnetic materials, aluminium for alloys, electronics for ferrites and specialty alloys for welding) all are experiencing high demand and their producers are experiencing decreased ability to hold down building pressure for price increases in their inputs to production, such as EMM. On the supply side, the EMM producers wherever they are sited are experiencing huge increases in their ore and power costs and, when sited in the developing world, are also experiencing large increases in their labour and environmental costs.

China is the leading producer and exporter of EMM with around 60 plants having a combined capacity of approximately 300,000tpa. The route by which this industry position has been build over the last 25% years or so has been a tortuous one for China and many more problems lay ahead to be overcome if they are to consolidate their leading position:

  • Episodes of gross overproduction have induced periods of depressed prices resulting in painful plant closures;
  • Poor planning and underpricing of electricity resulted in the closure of large numbers of plants that were sited remotely from the sources of ore and power;
  • The use of southern China’s large reserves of manganese carbonate ores, without the necessary capital being invested in electrolyte purification and tailings impoundment, has resulted in many plants having poor quality products and bad environmental situations;
  • Power shortages and interruptions are becoming increasingly more common in the provinces where production is concentrated;
  • Over 90% of Chinese plants produce less than 10,000tpa and are unlikely to survive as they are uneconomic if the full cost of their production is counted; and
  • Any large new plants constructed (based upon manganese carbonate re feed) will need to recognise the true costs of ore, power, electrolyte purification and long term environmental management if they are to meet the higher standards now being required because of WTO membership, Central Government Policy, community pressure, customer demands, etc etc.

Outside of China, EMM is either made by the manganese carbonate route or by roasting high grade manganese oxide ore to reduce it to MnO before dissolving it in sulfuric acid to form the manganese sulfate electrolyte. The problems of roasting and the advantages of using the Mesa patented processes for utilising low grade manganese oxide ores and wastes are the same as for EMD production and are covered elsewhere on this website. Mesa technology can offer the same advantages to an EMM producer utilizing a manganese oxide ore source as it can to an EMD producer. (NB: Up to the point of conditioning the electrolyte before taking it to the cell house, the processes are identical.)

Looking forward into the next decade, Mesa expects to see an increasing shortage in overall production exacerbated by a severe shortage of high purity EMM’s required by the electronics industry for ferrite production, the magnetic materials industry for Mn3O4 prooduction and other industries for specialty products. Hence, as it does for EMD, Mesa expects to see increasing prices and increasing price differentiation for qualities. China has the manganese carbonate ore and the capital to lift production, but there are real questions over the power requirements, which are three times greater than for EMD, and the environmental issues, which are inherent in this route. We suspect that any new large scale production using this method will have to be fully priced if it is to get the requisite approvals from the numerous stakeholders.

Fortunately for China, some of its carbonate ore reserves tend to be overlain by low grade oxidized ores that could be used to produce EMM in the same low cost and environmentally friendly manner described for EMD production using the Mesa patented processes. These oxide ores must be mined to get at the underlying carbonate ores and are presently sold for very low prices, so it would make a lot more sense to use them for the production of manganese electrolytic products. The cost of retrofitting this technology at say the largest half dozen plants would be very modest when viewed relative to the cost, quality and environmental gains that would be achieved. The next decade will reveal whether China has the will to reform this industry or will again see it decline, this time from product quality, power shortages and environmental problems, rather than from any slump in emand or product pricing.


EMM Pricing and End Uses

Mesa does not profess to posses any particular expertise in the electrowinning of EMM or its market uses. Our interest is solely in the production of the electrolyte required to produce it. Accordingly we do not maintain a watch on EMM prices or end uses. Readers wishing to understand these matter in more detail will find the following web pages a good starting point:

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