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Molycorp, Inc. Message Board

  • nakirykos nakirykos Nov 22, 2011 3:08 AM Flag

    OMH.AX (manganese) vs MCP (rare earth)

    All focus on the rare earth metals but I think few know the growing significance of manganese and the fact that the entire North America does not produce any manganese. Few know that all the high tech industries of the North America all fully dependent on the australian manganese miners (OMH.AX is a growing Mn producer and a 4% dividend payer) along with few miners from Ukraine and South Africa. This is why OMH.AX (OM Holdings) is an acquisition target imo and it trade below book value with single digit pe.

    Few know that manganese is the new clean energy metal (a strategic metal already) and few know that all the batteries have manganese that replaces cobalt. This is why the chinese, japanese and korean battery makers try to secure their resources and acquire high grade manganese miners.

    Manganese Battery Technology

    Thu, Jul 21, 2011 Feature Articles, Manganese Articles
    Post by Michael Montgomery, Manganese Reporter
    By Michael Montgomery

    Batteries are undoubtedly one of the most important markets driving our technological world. The need for batteries in the emerging markets such as electric vehicles, renewable energy and consumer electronics hinges on two factors: the need for high capacity and low cost energy storage. To meet these needs, lithium-manganese batteries mark the next step in technology geared to reduce the cost of energy storage.

    In an interview, Jonathan Lee, Battery Technology and Materials Analyst for Byron Capital Markets, discussed manganese batteries and the capabilities of this emerging technology.

    The downside of lithium-ion

    Currently, the standard for mobile electronics, traditional lithium-ion batteries use cobalt, however, the cobalt component is slowly being replaced. “The lithium-cobalt batteries that are used in laptops and other mobile electronics will not be used in vehicles.” said Lee. Lithium-cobalt batteries, as Lee explained, are less cost effective, as cobalt is an expensive metal in relation to others. Furthermore, the performance of subsequent battery technologies surpasses that of the first generation of lithium-ion batteries. The lithium-ion batteries, Lee noted, were impaired by a heat problem.

    The heat problem associated with the lithium-cobalt batteries in the past has resulted in recalls when some Hewlett-Packard laptop batteries suddenly ruptured, causing fires.

    Currently, the main market for manganese batteries is the hybrid/electric vehicle. “Lithium-manganese oxide batteries are being used right now in the Chevy Volt and Nissan Leaf,” stated Lee, adding, “One of the major benefits of using these batteries is cost. Manganese is a fairly inexpensive metal, which keep down cost.”

    Prototype manganese batteries

    There are other types of batteries utilizing manganese that are still in a developmental phase. “The other type of battery using manganese is the lithium-nickel-mangane... battery. This is potentially the next generation and the Argonne National Laboratory is working on these,” stated Lee.

    The Argonne lab has stated that manganese batteries far outperform traditional lithium-ion systems. “[Manganese composite batteries] demonstrate outstanding cycling stability and can be charged and discharged at high rates, making them excellent candidates to replace [lithium-cobalt] for consumer electronic applications and hybrid electric vehicles,” stated Argonne National Laboratory.

    One of the main obstacles facing electric vehicles is recharging time. Using a standard household plug, the Chevy Volt takes ten hours to charge the battery with a range of only 35 miles. However, researchers at the University of Illinois are developing batteries that have “a charging rate ten to 100 times higher than that of a normal, commercial battery (in one instance, the researchers created a lithium-ion battery that could be 90 percent recharged in two minutes),” according to an article from The Economist.

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    • Very interesting! Thanks. The plant that they are proposing in Malaysia may result in a fall in the share price due to a dilutional equity sell. I found it fascinating to compare OMH with Lynas which is finally coming close to completing its Lynas Advancd Materials Plant in Malaysia after years of planning and execution.I have personally been loading up on lyscf shares in anticipation of Reo product sales in 2012. MCP is already making sales and if they can complete the Phoenix one project on time next year, they should increase their earnings significantly. OMH.AX is a longer term stock play IMHO.

      • 1 Reply to wjtennis
      • They said they have the cash flow to cover their first investment in Malaysia that will operational in 2013. I guess you talk for the second one effective 2014....we will see for that second one.

        Thing is that a peer, Consolidated Minerals goes public in the Australian exchange too. They have said that they wanted to acquire OMH . They have already a 12% stake. So if OMH is not acquired by a chinese/japanese/korean maker , Consolidated Minerals may be the suitor.

    • To complete the article above :

      Manganese supply chain

      Last year, China produced 1.4 million tonnes of manganese. However, “there is only about 34,000 tonnes of electrolytic manganese production outside of China,” stated Lee. This production comes from Manganese Metal Company in South Africa. Lee added, “With electric vehicles, our estimates are by 2020, we see a need for 80-90 thousand tonnes [of manganese] for electric vehicles.”

      The added demand from electric vehicles is small in comparison to the overall production of manganese. However, there are a few factors to consider in terms of supply and demand fundamentals going forward.

      On the supply side there are reports that manganese ore bodies are shrinking in China. It is reported that if no new resources are found, China may lose 500-700 thousand tonnes of capacity in the next 3-5 years.

      Approximately 90 percent of manganese is consumed in steel production. Steel production is forecast to grow this year by seven percent. Recently Lakshmi Mittal, the CEO of the world’s largest steelmaker ArcelorMittal (NYSE:MT) stated, “Any substantial slowdown is still many years away.” The added demand from the steel industry coupled with new demand from batteries will require significant tonnage to be supplied to the market.

      As manganese battery technology improves it will bring down the cost, and increase the range of electric vehicles. This is where Jevons Paradox may come into play. The paradox states as efficiency increases, so grows the demand for the resource used because of reduced cost.

      As these emerging technologies increase the efficiency of electric vehicles it follows suit that the market will demand even more electric vehicles. Also, the potential for these batteries to be used in mobile electronics could open a truly massive market, requiring additional supply of the metal. The future for manganese batteries looks bright.

      • 1 Reply to nakirykos
      • This is another interesting article imho :

        Manganese: Battery Technologies Vie for Market Charge

        Mon, Jun 20, 2011 Feature Articles, Manganese Articles
        Post by Damon van der Linde, Manganese Senior Reporter

        By Damon van der Linde

        Manganese is becoming a widely known component in the battery market. Lithium manganese dioxide batteries can offer a higher density and extremely long shelf life, making it a prime replacement for regular alkaline batteries. Lithiated manganese batteries are commonly used as button cells and cylindrical batteries.

        Lithiated Manganese Oxide is one technology ideal for high-performance batteries. Milwaukee Tools uses this type of battery in their electric power tools and the adoption of this technology is growing into other applications. Currently, China in the primary producers of electronic grade manganese, though there are other projects coming on-stream around the world, including North America.

        “The potential is there for every aspect of technology,” said Larry Reaugh, President and CEO of American Manganese (CVE:AMY). “There are big advantages in weight, big advantages in retention of power and certainly those are big considerations in cars.”
        Reaugh says that although Lithiated Manganese Oxide batteries have twice the life for half the weight of a nickel-cadmium battery, the technology has not yet reached its potential in terms of adaptation across North America.

        “It’s adaptation. You’re tooled up to use a certain type of battery, that means you have to retool so these things take time, but I can see as far as I’m concerned, the lithiated manganese will be a major contender for the battery industry,” said Reaugh.

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