Tesla shifts to manganese - Euro Manganese surges
Shares in Euro Manganese Inc. (TSX-V: EMN ASX:EMN) went on a tear yesterday, up more than 50% at one stage and catching the attention of the ASX which queried the seemingly unsubstantiated share price increase.
However, as it panned out there was plenty of substance behind the investor support for EMN — it just didn’t appear in the form of an ASX announcement.
In management’s response to the exchange, EMN noted that the sharp uptick in the group’s share price coincided with a presentation by Elon Musk at Tesla’s 2020 Annual Meeting of Stockholders & Battery Day.
Indeed, Musk’s comments were highly material in terms of painting a bright outlook for EMN’s Chvaletice Manganese Project (CMP) in the Czech Republic.
Here Euro Manganese CEO, Marco Romero joins Steve Darling from Proactive Vancouver with the company’s reaction to the Tesla’s Battery Day:
Euro Manganese plans to produce battery-grade, high-purity manganese products, including high-purity manganese metal.
The proposed plant, which is currently undergoing an environmental permitting process, is designed to produce approximately 50,000 tonnes per annum of high-purity manganese products made by recycling waste.
The product can be readily supplied to both motor vehicle and electric battery manufacturers in Europe due to the proposed plant’s close proximity to markets.
Tesla steers towards high manganese content batteries
Looking specifically at Musk’s comments and their relevance to yesterday’s share price response, of most significance were his disclosures regarding technological advances made by the company which involve the proposed implementation of an innovative type of lithium-ion battery with a cathode that contains around 33% manganese, made directly from manganese metal.
Musk also said that Tesla would build its own cathode factory, purchasing raw materials directly from mining companies.
Until now, Tesla had used electric vehicle batteries manufactured by third parties such as Panasonic which contained no manganese.
The introduction of manganese in Tesla batteries is expected to result in a material increase in high-purity manganese demand.
With CMP having Europe’s largest manganese deposit, and a strategy that is focused on producing battery grade, high purity manganese products, including high purity manganese metal, EMN is definitely a right time, right place story.
Tesla’s new battery requires 33% manganese
Summing up, Musk said that he was seeking high purity manganese as a primary raw material for battery manufacture.
Tesla’s revolutionary new EV batteries will contain 1/3 manganese, 2/3 nickel and no cobalt.
Production is to begin immediately and will ramp up over the coming year to 10GWH of batteries, at a plant that has been stealthily built in recent months next to Tesla’s Fremont auto plant in California.
Further, Telsa’s giga-factory, currently under construction in Germany, is located around 400 kilometres from EMN’s Chvaletice Manganese Project.
The image above is of the planned giga-factory that was recently unveiled.
It will be the most advanced high-volume electric vehicle production plant in the world, combined with a new-generation battery factory.
Tesla plans to produce 500,000 electric vehicles per annum at the Grünheide site starting from the European summer of 2021.
So it would seem that E.M. won’t be able to get enough of EMN.
Given this backdrop, it wasn’t surprising to see EMN’s shares trade strongly under extremely large volumes on the open despite significant weakness in the broader market.
More than 2.5 million shares were traded on the open at 21.5 cents, up 10% on yesterday’s closing price of 19.5 cents.
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