Beyond Lithium: Strategic Battle For Fluorspar And Other Essential Minerals In Global Energy Politics

Author: Matt Whittaker | July 08, 2024 10:54am

WASHINGTON — While copper, lithium, nickel and cobalt often grab headlines when it comes to battery metals, there is an array of other minerals important to the energy transition away from fossil fuels.

As the importance of manganese, graphite, silicon and fluorspar grows alongside demand for electric vehicles and renewable energy storage, that dynamic also highlights China's dominance of these industries.

As government leaders in the United States and Europe work to build out their ex-China supply chains for a host of critical and strategic minerals, industry executives gathered at a recent Benchmark Mineral Intelligence mining conference in Washington, D.C., to discuss minerals and geopolitics.

Also Read: EXCLUSIVE: Lithium May Jump More Than 60% As Low Prices ‘Knock Out The Chaff,’ Industry CEO Says

Here's a look at what they had to say:

Manganese

"We're all facing the issue of China, where the dominance is," said Danny Keating, CEO of Giyani Metals Corp. (OTC:CATPF), a Canadian miner developing manganese assets in Botswana. "We're no different in manganese."

Giyani is looking to help bolster the ex-China supply chain for manganese, he said. 

Manganese is mined in multiple countries around the world, but more than 90% of the world's refined manganese comes from China. That creates a key choke point for a material used in lithium batteries. 

Batteries, which account for 2%-3% of global manganese demand, are the largest market for the metal outside of its use as an alloy in various metals, according to the International Manganese Institute. The industry group said manganese is the fourth most used metal in the world based on tonnage, behind only iron, aluminum and copper.

Manganese ore prices rallied earlier in the year when a cyclone took out production at an Australian mine owned by South32 Ltd. (OTC:SOUHY) and Anglo American (OTC:NGLOY), halting 12% of global supply, according to S&P Global Commodity Insights. 

Prices have since pulled back but remain elevated compared to the beginning of the year.

Aside from Giyani, other small publicly traded companies involved in manganese include Euro Manganese Inc. (OTC:EUMNF) and Manganese X Energy Corp. (OTC:MNXXF).

Graphite

After spending the better part of a decade in the lithium business, Vincent Ledoux-Pedailles three months ago took a job as the chief commercial officer for privately-held New Zealand-based CarbonScape Ltd.

The venture-capital backed company is commercializing technology to make graphite more sustainably than the current synthetic or natural versions. Its process turn waste from the timber industry into what it calls "biographite"

Because the process uses cheap wood chips, Ledoux-Pedailles said the technology can produce graphite at a lower cost than in China, which dominates graphite production.

The company points out that its process can be used anywhere in the world, enabling nations concerned about critical materials to produce graphite locally, potentially freeing electric vehicle markets in Europe and North America from China's grip on the material.

CarbonScape's last round of funding raised $18 million in September, according to private market data provider PitchBook. Ledoux-Pedailles said at the conference that the company plans to have another round of financing later this year.

Publicly-traded graphite companies include Graphite One Inc. (OTC:GPHOF) and Nouveau Monde Graphite (NYSE:NMG).

Silicon

While graphite has proven its use in lithium batteries, silicon is more of an emerging technology.

Silicon can hold more energy than graphite, but the material swells during charging, degrades over time and is too expensive for mass use in electric vehicles.

Several companies are working on improving silicon battery technology because it holds the potential to increase electric-vehicle range, decrease charging times and lower battery costs.

One of those companies is venture-capital backed Advano, which last month announced the final stage of commissioning at its industrial pilot plant in anticipation of beginning production.

The company's CEO, Chris York, said at the conference that the industry needs to lower the cost of batteries and remove supply chain control from China.

"You don't have to make a profit in China," he said. "Everything is state-owned at the end of the day."

Publicly traded silicon companies include HPQ Silicon Inc. (OTC:HPQFF) and Ferroglobe (NASDAQ:GSM).

Fluorspar

The Oregon Group, an investment research firm, recently called fluorspar "the EV critical mineral no one has heard of."

The mineral is often used to make refrigerants, steel and aluminum, as well as to process uranium. 

There is also more fluorspar contained in a lithium-ion electric battery than there is lithium, and, according to Benchmark, demand for electric vehicles and renewable energy storage promises to increase the use of fluorspar.

"We need investment in fluorspar mining now just like we needed (in) lithium mining 10 years ago," said James Rodriguez de Castro, managing director of privately held Mongolian Minerals, a mining company specializing in fluorspar.

China is by far the world's biggest fluorspar miner, followed by Mexico and Mongolia. But China only has about 10 years' worth of supply based on reserves and production rate, he said.

In Mongolia, the executive has been building up and exploring a portfolio of fluorspar mining and exploration licenses.

Mongolian Minerals needs $200 per metric ton to mine fluorspar and ship it to China, he said. Fluorspar in China ended the first quarter at $462 per metric ton, according to chemical market intelligence firm ChemAnalyst.

Investors looking for publicly-traded fluorspar companies can consider Ares Strategic Mining Inc. (OTC:ARSMF) and Energy Transition Minerals Ltd. (OTC:GDLNF), although the latter's project containing fluorspar in Greenland is in arbitration.

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