China’s Manganese Stockpiles Create Market Opportu
China’s Manganese Stockpiles Create Market Opportunity
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Spotlight Companies — Spotlight Companies @ 11:10 am
World markets for rare earth metals have been rocked over the last year as China flexed its market muscle. China, a country that is responsible for over 90 percent of the world’s rare earth supply, drastically reduced exports and created a market bubble that drove up prices around the world. Rare earth metals, though, are not the only strategic metal that is dominated by Chinese mining efforts. For over 30 years, manganese is listed as a strategic metal by the U.S. Department of Defense. Manganese is a necessary component in making steel due to its sulfur-fixing, deoxidizing, and alloying properties. It’s also crucial to creating a corrosion resistant aluminum alloy. However, the United States still fails to produce large quantities of the metal in its own borders, depending on exports from China, South Africa, and Mexico among other counties.
EMM Critically Under-produced in North America
The issue is even clearer when one considers electrolytic manganese (
EMM), an important alloying element. Electrolytic manganese is used in batteries and copper and aluminum alloys and, at present, over 95 percent of global supply can be sourced to China. China’s hammerlock on the global supply could easily become a concern if the Central Government decides to engage in price fixing and market manipulation efforts like those employed in the rare earth sector, making it all the more essential that a viable source of the metal is created on this side of the Pacific. Canada’s
American Manganese (AMY.TSXV) is making the effort to do just that, acquiring Arizona’s Artillery Peak Manganese Properties in June of 2007 and British Columbia’s Black Prince, Junction Creek and Olson Manganese Properties that July. Reports show that the Arizona properties have over 7.5 million tons of indicated reserves and over 1.75 million tons of inferred reserves.
Increasing Demand Means a Prime Opportunity
As American Manganese prepares to ramp up production, it is entering into an increasingly receptive global market. As China ramps up its production of steel, which requires 30 kg of manganese ore per tonne of crude steel, global demand continues to increase. Since the start of 2007, the price for one ton of manganese has gone from $1,225 to over $3,500. In this climate, American Manganese has the properties in their control to help alleviate the lack of supply in the United States and ensure that international markets can’t create a critical shortfall in the element at home.