“Electrolytic Manganese Metal (EMM) has grown from trading at US$1,750 per tonne (mt) to currently trading at approximately US$2,800/mt. Battery materials companies are willing to buy manganese products at any cost provided the specifications meet their strict standards.”
Can you give a brief overview of Giyani Metals and the company’s evolution since its establishment?
Giyani Metals was founded in 2007 and is listed on the Toronto stock exchange. We are a vertically integrated junior mining company focused on supplying manganese for the fast-growing battery industry. The company has several licenses in Botswana as the country has a good mining legislation and is attractive to investors.
We believe that the move away from internal combustion engine to electric vehicles is accelerating more rapidly than many realize. This industry requires a giant industrial process which employs millions of people across the globe and is a significant driver for economic growth. OEMs are investing heavily in the paradigm shift towards battery electric vehicles as to have a competitive edge in the market.
How are we seeing the developments in the battery industry reflect on the price of manganese?
Manganese is a material which is very misunderstood, and the metal goes into two entirely different products. Approximately 90% of manganese goes to the steel mills, which has nothing to do with the battery industry. Electrolytic Manganese Metal (EMM) is used to produce batteries and has grown from trading at US$1,750 per tonne (mt) to currently trading at approximately US$2,800/mt. Battery materials companies, and cathode makers in particular, are willing to buy manganese products, especially high purity EMM, at any cost provided the specifications meet their strict standards.
What is the current financial situation of Giyani Metals’ project in terms of investment?
We continue to invest heavily in our projects. We raised capital from the market in the beginning of 2018, and the bulk of investment came out of Australia. In the near future we will implement an environmental management plan to clean up some legacy dump material that was left behind by the old mining operation around our project area in Botswana. This material can be processed into a uniform manganese product that can potentially be sold to the South African market – this would generate most of the cash-flow that we need for our project development. When our project reaches construction, we will go back to the equity markets to raise capital.
The market understands that we manufacture a product which they desperately need. A battery pack has 60 to 75 kilowatt hour (kWh) and the cost is approximately U$150 to US$200/kWh. This comes to one pack costing between US$9,000 and US$12,000. A vehicle costs approximately US$40,000, and thus the battery pack cost contributes a quarter of the total vehicle cost. The cathode cost is about 25% of the total material cost of a battery cell, and within the cathode, the manganese approximately represents 3% of the cost.
Can you elaborate on Giyani Metals’ maiden mineral estimate?
We published our mineral resource estimate in September 2018. The estimate has been a little misunderstood in the market as it is relatively small compared to what they are used to in terms of manganese resources for the steel industry. However, what many people may not realize is that this small resource estimate will probably produce between 30,000 and 50,000 tonnes per year (mt/y) of the product that will go into the battery chemical market. The current market is only approximately 440,000 mt/y today. Over the next few years, there will be a significant increase in consumption and demand for battery grade EMM.
Our results show that we will be able to produce EMM at a cost of US$1,000/mt, which is a very cost effective model with a much higher profit margin compared to selling DSO. This will give us a great leverage in the market. We have unique manganese ore characteristics in Botswana, consisting of mostly fine material, which is ideal for processing and refining into EMM. We plan to become the largest independent supplier of EMM and we are fast tracking our project as much as possible. All electric vehicle manufacturers will require manganese supply security and consistency; they are not really concerned about the price. We are also looking to secure other manganese deposits both in Southern Africa and across the world.
What are Giyani Metals’ objectives and strategy moving forward?
Giyani Metals aims to do its preliminary economic assessment (PEA) and hopefully this process will be completed by December 2018. This will create awareness in the market and solidify the economic indicators of our project. We would like to be in production by 2020, but it depends on the Botswana government and the mining legislation. Our vision is to become the leading supplier of manganese to the global battery market.