U.S. Set to Restart Manganese Mining After Decades Amid Growing Demand

Australian miner South32 aims to accelerate development of the first new U.S. manganese mine for decades as EV makers race to secure supplies of the metal used in electric vehicle (EV) batteries. The company said the automakers were keen to acquire manganese from its Clark Deposit in Arizona, which would become the only source of the metal. The company acknowledges that it could become a challenge to supply it quickly enough.

Forecasts suggest that demand for manganese is set to increase nine-fold, fastest among any battery metal. Production in the United States is also supported by Biden’s Inflation Reduction Act (IRA) as Washington aims to reduce reliance on China.

Ford and General Motors have been particularly active recently to strike new material supply agreements and look to accelerate development of local sources.

South32’s U.S. operations would be attractive for automakers because it would help them claim tax credits under the IRA. The law, enacted in August, will grant credits for products with a percentage of materials extracted and processed in the U.S., or in nations that have a free trade agreement with Washington.

South32’s discussions with potential customers include potentially developing refining in the United States to deliver electrolytic manganese metal products, which would end the need to send raw materials to China or another country for processing.

South Africa, Gabon and Australia account for more than two-thirds of production of manganese, mainly used in the steel sector, and domestic output in the US, which once had mines in states including Virginia, ended in the 1970s. China currently dominates refining of the metal into materials used in the battery sector, accounting for 95% of manganese sulfate production capacity last year.

South32 hopes its accelerated development at Clark Deposit will be bolstered by U.S. legislation aimed at promoting quick development of clean energy and other infrastructure projects. The company has so far allocated $55 million of capital expenditure to work on the mine for the current fiscal year and expects to begin a pre-feasibility study before mid-2023. The company estimates the deposit contains 55 million tons of ore with a 9% manganese content.

The project may also be eligible for U.S. government funding. U.S. Energy Secretary Granholm in July urged miners, including Australia-based companies, to explore potential support from agencies including the Department of Energy’s loan programs office.

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