Rather than requiring fewer commodities, the green economy, and its resulting technological developments, will actually require more commodities, says specialist mining services provider Ukwazi business development director Spencer Eckstein.
Consequently, mining companies, including manganese players, need to adequately position and prepare themselves to maintain a competitive advantage going forward, he notes.
Commitments after COP26 and the global drive to create a low-carbon future present new opportunities that the mining industry can capitalise on; however, such opportunities require new business models, effective capital allocation and data-driven innovation.
From an alternative-energy perspective, many industries have made an active move towards battery-powered technology, which largely depends on cobalt, adds Eckstein.
However, manganese has the potential to essentially displace cobalt in lithium-ion batteries, although further research is required.
For example, automotive and clean energy company Tesla has found that using manganese in electric vehicle (EV) batteries can potentially make them less combustible, ensuring that the batteries last longer.
Eckstein says manganese’s current and future popularity can be attributed to three factors: affordability, its ethical value chain and a lack of substitutes.
With manganese having historically been mined using openpit methods, it has been less expensive than commodities that require underground equipment and infrastructure. For lithium-ion battery manufacturers, this lower price point allows for more funds to be allocated to refining the technology for a safer and better-functioning product.
Further, with increased focus being placed on how companies practise good governance, along with intense scrutiny from investors, government and civil society, stakeholders want to ensure that every touchpoint of the value chain is compliant, transparent and fair.
Moreover, there is currently no substitute metal or mineral available to replace manganese in steel manufacture, according to scientific agency US Geological Survey.
Eckstein says the steel and EV battery industries are the largest consumers of manganese today, and demand is set to increase substantially in future, owing to the growing EV industry.
Despite growth opportunities for the manganese sector, Eckstein notes that, at a macroeconomic and geopolitical level, the industry is still recovering from the Covid-19 pandemic and the subsequent logistical and supply chain disruptions.
He adds that manganese prices depend on steel demand in China and, to a lesser extent, India and Vietnam, who are the major global steel producers.
Additionally, the impact of the war in Ukraine is yet to be determined.
Further, the three main African countries that contribute towards global manganese production are South Africa, Ghana and Gabon.
Although South Africa hosts 75% of the world’s manganese resources, Gabon holds 25% of the world’s high-grade manganese reserves. South Africa’s manganese production in 2021 amounted to only about 37% of global output, that of Gabon about 18% and Ghana’s about 3.2%.
Eckstein explains that the main challenges for African producers include power reliability, security of supply, logistical challenges related to rail and harbour inefficiencies, as well as water availability.
Environmental, social and corporate governance considerations, particularly regarding the rainforests in Gabon, are standards that require strict compliance.
However, some of the main challenges going forward will be identifying and mining replacement reserves, as well as additional exploration, says Eckstein.
As the mines begin to age, there is likely to be a shift from openpit to underground mining, with concomitant risks.
Further, the higher oil price is likely to impact on operational costs, particularly on mines’ diesel costs.
Eckstein explains that, in South Africa, one of the main challenges is streamlining manganese export logistics, which depends heavily on road infrastructure.
State-owned rail, port and pipeline company Transnet has said that it will relocate its manganese ore facility from Gqeberha to the Port of Ngqura, both in the Eastern Cape, in 2027, which will benefit producers in South Africa, as rail is cheaper than road freight.
Eckstein adds that, in South Africa, Ghana and Gabon, issues pertaining to local content and local partnerships as part of the social licence to operate will remain a challenge.
He concludes that, while South Africa and Gabon have had to contend with many challenges, owing to the demand for manganese, production in these countries has been steadily increasing, mainly owing to improved mechanisation and cost control, as well as better-than-expected commodity prices.