By Larry Reaugh, American Manganese Inc.
Rare Earths Elements (REEs) may grab most of the headlines when the topic is critical minerals, but 21st Century technology is hungry for far more than REEs; take the lithium-ion batteries that literally drive our Electric Vehicles, which require not only the lithium that gives them their name, but cobalt, nickel, graphite – and manganese.
In this current EV environment, what can the U.S. do to ensure a steady supply of critical metals to assist in their military build-out, steel manufacturing, and move ahead in the lithium-ion battery race?
Governments in the U.S. and Canada are working the problem. Canada’s new Critical Minerals List includes manganese, as does its American neighbor’s critical list from 2018. President Joe Biden’s February 2021 Executive Order directed a 100-day battery supply chain review, including the recycling of critical and strategic minerals. When the report emerged on the 100th Day – an unusually punctual event in the world of government – manganese was mentioned, and so was American Manganese Inc., by name.
The White House report rightly sees the growing volume of spent lithium-ion batteries as a resource too often lost to landfills or shipped abroad for recoveries. The report notes that ‘Domestic economical recycling could reduce exports of valuable resources and increase the quantity available to the U.S. battery supply chain’. This is the strongest statement to date that indicates momentum is building to bring public policy in line with private-sector innovation to meet the massive new needs for critical minerals.
The White House report included the following recommendations:
“To secure cobalt supply, and guard against price fluctuations, the United States could consider investing in battery recycling infrastructure and technology development. Immediate focus should include investment to increase capacity and scale-up of recycling facilities, and investigation of pathways for early Federal purchase of recycling waste streams to the furthest extent possible”.
That’s the good news. The bad news is that China noticed the criticality of manganese, more than a decade ago, and set about systematically to dominate the global manganese supply chain.
China controls this critical metal as a manufactured finished product, not the raw material. Manganese mining takes place in Gabon, Zambia and parts of South Africa. China owns or is partnered with manganese miners in all three countries.
Recently the price of EMM – Electrolytic Manganese Metal — rose 56%, touching levels last seen in 2012, when American Manganese issued our pre-feasibility study on the Artillery Peak manganese project in Arizona. But the price spike didn’t last long, as prices ebbed to levels that make it difficult to develop supply outside of China. That’s the advantage of pricing power that comes from dominating the global supply chain for any material.
China has always had a plan to produce advanced manufactured rare metals holding the rest of the world hostage. It dates back to China’s so-called 863 Program – the numerals referring to the year and month of the effort, March 1986. That was the moment former Chinese leader Deng XiaoPing approved the State High-Tech Development Plan, the precursor to Xi Jinping’s “Made in China 2025” strategy, which puts a priority on “new materials,” including advanced forms of manganese like EMM.
How important is that? Here’s what the Pentagon’s last publicly-released National Defense Stockpile Report had to say about EMM:
“Strategic Importance: Significant. There is no direct substitute for manganese in the production of aluminum alloys and steel alloys.”
If the US wants EMM and also manganese for EV Batteries, it has three choices: one is to import the nation’s needs through hostile countries at a severe disadvantage, and hope for the best. That’s a wish, not a strategy.
A second, short-term option would be to stockpile metals at one or more strategic locations – that is, of course, if you are currently producing any of those materials. In the case of manganese, this option doesn’t exist for the U.S., as there is presently zero manganese production – making manganese just one of a dozen minerals and metals deemed “critical” by the U.S. Government for which there is 100% import-dependency.
There’s a third option. My company and its technology partners have developed a technology capable of producing manganese from low-grade manganese resources, which the U.S. has in abundance. Currently, AMY is working with raw ore from the U.S. strategic manganese stockpile at Wenden, Arizona – a project funded by the DoD Stockpile “landlord,” the Defense Logistics Agency — to produce EMM utilizing our patented process for treating low grades of manganese from existing deposits thought to be near-useless until now.
It’s time for the U.S. and its allies to heed the new White House report as the wakeup call that it is. Consider a recent incident that illustrates how much geopolitics in the 21st Century will play out around the movement of critical and strategic metals and minerals – and the vulnerability of extended supply chains to disruption.
And it’s not just China that understands how much tech metals matter.
Russia recently held naval exercises in the Pacific Ocean that at one point reached 23 miles off the coast of Hawaii, well within the U.S.’s internationally recognized 200-mile Exclusive Economic Zone, and minutes from the 12-mile sovereign boundary for territorial waters. After years of well-founded worry that China’s territorial claims in the South China Sea might empower it to close a global shipping route and bring Western economies to a standstill, is it now Russia’s turn to flex its muscles to show the U.S. how easy it would be to block shipments of essential supplies of advanced materials? Whatever the case, policymakers in the U.S. – joined by the industrial democracies of Europe, Asia, Australia and Canada — need to take action to reduce the risk of continued dependence on potential adversaries for critical metals like manganese and dozens of others.
Larry Reaugh is CEO of American Manganese Inc.