SA’s Manganese refining pioneer set to electrify West’s quest to diversify from China – CEO Louis Nel

A manganese refinery near the Kruger National Park, referred to as the Manganese Metal Co (MMC), is poised to take advantage of the West’s desire to remove itself from China’s supply. Found in the rural town of Mbombela, MMC is among simply a handful of refiners of battery-grade manganese outside China. MMC CEO Louis Nel informed Biznews in an interview that the rapid development of lithium-ion batteries in electrical automobiles boosts the potential customers for the business and has actually led to a stable circulation of Western car manufacturers knocking on its doors, aiming to decouple from China. He did not wish to discuss whether it consists of Tesla however stated that many pre-eminent automobile manufacturers have actually come calling. When it concerns cost, Nel stated that it was tough to take on China, however there was a market for an alternative item with a smaller sized ecological footprint.– Linda van Tilburg

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Appropriate timestamps from the interview

00:11– Introduction
00:31– Overview of Manganese Mining Company
01:18– Demand for Manganese Metal from Automakers
02:21– Competition from Junior Miners
03:25– Price Competition with China
03:57– Unique Selling Point of Manganese Metal Company
06:00– Legislation and Incentives in the United States and Europe
07:37– Customer Base and Premium Pricing
08:54– Challenges of Operating in South Africa
10:35– Government Support and Beneficiation
13:24– Interest from Automotive Producers
14:37– Conclusion

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Excerpts from the Interview

The only genuine competitors outside China, electrical car transformation increases development potential customers

Over the previous years, we’ve observed a substantial shift in our item portfolio towards battery sales, particularly lithium-ion batteries for electrical cars. The potential customers are appealing. In the next 10 to 20 years, we prepare for rapid development in the electrical automobile sector. We are among a couple of manganese refiners beyond China, and as such, numerous Western manufacturers are looking for to minimize their dependence on China for their supply. They have actually restricted alternatives when trying to find improved manganese.

There are a number of junior miners raising capital, establishing demonstration centers, and making statements. We are more than going to work together with these juniors. The world requires more non-Chinese supply. Presently, about 95% of all manganese refining takes place in China. Till we have more refiners beyond China, OEMs will stay greatly depending on China. We invite the introduction of these juniors and are open to working together with a lot of, if not all of them. We see this as healthy competitors. We are the incumbent beyond China, and our 50-year performance history puts us in a strong position.

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Can’t Compete with Chinese Prices, however Western customers are prepared to pay the premium

If I were to determine our special selling point, it would be that we are a non-Chinese manufacturer. We securely think that we make the very best manganese metal offered worldwide. Our item is 99.9% pure manganese metal, produced through a procedure that does not include selenium. The majority of, if not all, Chinese manufacturers utilize selenium in their procedure, which provides a substantial energy benefit, most likely making them about 30% more effective. The selenium is taken in into the item and makes its method into the last item as well as the production procedure. We produce the world’s finest manganese metal, running according to Western organization concepts.

We have close relationships with our clients throughout different geographical areas. We do not offer specifically through representatives. Rather, we use a business-to-business marketing design where we comprehend the requirements of our 120 consumers, and what they utilize the item for, and after that customize the item to satisfy those requirements.

On the ecological side, we’ve been running for rather a long time, and the legislation in South Africa is fairly stringent, similar to first-world requirements. The ecological footprint of our operations is definitely among the advantages when offering to the Western world.

United States legislation advantages MMC

We have 2 pieces of legislation that are especially appropriate to our service. Historically, the African Growth and Opportunity Act (AGOA) has actually been necessary for us. We get a responsibility advantage when delivering our manganese metal into the United States, that makes us more competitive versus China. This act is crucial for us as a South African manufacturer for our present item. For our future involvement in the Lithium-Ion Battery Space, the Inflation Reduction Act (IRA) in the United States is a crucial piece of legislation that assists us as a manufacturer. Obviously, this is incentivising.

The Original Equipment Manufacturers (OEMs) in North America are urged to source non-Chinese entities or nations of issue for their basic materials along with their items, with China being among them. I believe that this piece of legislation and reward in America definitely has a lot of advantage for us as a non-Chinese manufacturer. Europe, in the very same vein, is taking a look at decoupling their resources. They are dependent on China and are executing legislation and procedures to guarantee more stringent control over products being available in from China.

SA rail and power supply is tough, however “we’re resistant”

We are a personal South African business that has actually matured in South Africa. By meaning, we are durable, even when running in a less-than-perfect financial environment. Regardless of the difficulties, which definitely do not make doing organization simpler, we are coping and finding out that grumbling does not assist. We simply require to proceed with the job at hand. Rail is a fine example.

Developed in 1974, we were at first a company completely based on rail operations. All inbound and outbound logistics were rail-based. We have an operating and active rail siding, however post-COVID, we have not delivered or railed a single container to Durban. Presently, the majority of our ore from Hotazel and the Kalahari is trucked on the roadway. This is not perfect for our nation’s roadway facilities or roadway users, however as a service, that’s what we require to do to keep going. We’ve substantially increased our stock keeping in all vital products. We bring more stock than we typically performed in practically all our reagents and basic materials. We make strategies as we go along.

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SA Government need to do more to promote beneficiation, a fast method to produce tasks

We are an item of federal government rewards. In the early 70s, we were developed in Nelspruit, mostly due to federal government rewards to promote service. Our organization was begun with financing from the Industrial Development Corporation (IDC) in the early 70s, so our history is connected to the IDC. Over the last 10 years, we’ve seen increased attention to the green economy in the political arena in South Africa, along with worldwide. We’re seeing that political gamers are beginning to establish policies and structures around organizations that take part in this location. MMC is a company that is currently contributing in this area, so there’s interest instead of assistance.

We are a happily South African business. For the last 13 years, we have actually been independently held by South Africans and run solely in South Africa. We beneficiate 80,000 lots of manganese each year and develop 600 tasks in Nelspruit. The effect is much bigger if you think about the presumed tasks being developed.

I believe beneficiation is something our federal government need to promote. It’s one of the quickest methods of producing tasks and monetary success for individuals of South Africa. We definitely think that beneficiation is something we must take a look at. It’s challenging. In most cases, beneficiation features an electrical power costs and everybody understands what the difficulties with Eskom are. I still think there are chances to beneficiate in South Africa, and we prepare to continue to beneficiate for the next 15 years.

Has Tesla come calling?

We’ve signed numerous NDAs and the majority of your preeminent vehicle manufacturers have actually come calling, so I’ll leave it at that.

Taking a look at growth into manganese sulphate

Our standard markets remain in the steel and aluminium organizations, and with those, I believe we are comfy with where we are at the minute, so we do not see specific development in those areas. About a quarter of our item has more than the last 10 years made its method into the lithium-ion battery area for electrical lorries. Naturally, there’s big development capacity because area. We are taking a look at a Brownfields growth of 5,000 lots of manganese sulphate. Completion item resembles what they make with our manganese metal, and our objective is to begin a 5,000 load brownfields plant on our present footprint, making use of all the facilities, all the legislation, and allowing that remains in location. Our very first growth choice is to endeavor into manganese sulphate and from there to look at scaling that and see where that goes.

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