The Euro Manganese Inc CDI (ASX: EMN) share price has surged 8.8% to 68 cents today after the company posted a series of positive investment results in its tranche placement announcement. More impressively, it's up 655% over the past 12 months as one of the relatively few manganese producers worldwide.
Let's take a closer look at what's driving the battery minerals company today.
What did Euro Manganese announce?
Today's Euro Manganese share price movement follows news of its closure of the first tranche of its $30 million private placement.
The tranche comprised the sale and issue of around 41.6 million CHESS Depositary Interests (CDIs) at 60 cents per CDI. Proceeds will go towards expanding its Chvaletice manganese extraction project and there is a second tranche to come, involving the sale of 8.3 million CDIs by May.
The Euro Manganese share price rise is also due to the company's support from the European Institute of Innovation & Technology (EIT), a European Union investment fund focused on supporting clean energy projects. EIT is providing Euro Manganese three grants totalling approximately $385,000.
The company also advised it had benefitted from the Czech Republic's Ministry of Industry and Trade decision to extend its investment incentive tax credits until 2025.
Management commentary
When Euro Manganese first announced its $30 million private placement 9 days ago, its CEO Marco Romero said that demand for the mineral was constantly improving.
The demand for high-purity manganese products continues to grow and the latest market developments have further improved our prospects. Volkswagen Auto Group recently announced plans to use a high proportion of manganese in the batteries that will be used in the largest segment of its future electric vehicle production.
This financing will allow us to complete all site and technical work required for a final investment decision expected in 2022. Euro Manganese is clearly in the right place at the right time.
A closer look at Euro Manganese Inc
The Canadian small-cap battery materials company is a dual-listed company on the ASX as it focuses its mineral exploration, not in Canada or Australia, but in the mining exploration destination of the Czech Republic.
The company's Czech Republic project, titled Chvaletice, is producing high-purity electrolytic manganese metal and high-purity manganese sulphate monohydrate. Its manganese products are aimed at the electric vehicle (EV) industry, which is expected to increasingly demand manganese as a critical metal for its batteries.
In a sense, both Euro Manganese and the Czech Pardubice District lucked out on its current global manganese significance, as Euro Manganese is simply reprocessing a large deposit of manganese carbonate contained in waste from historical mining operations at the site.
But, like many rare earth metals miners, its potential profitability is a little more complicated than it looks…
What is manganese?
Manganese is an interesting precious mineral often found in combination with iron, as it's not a free element in nature. It's currently an essential ingredient in the development of steel and is also used in animal feed.
However, until recently, it flew under the radar of the United States and other large mining nations, which may help explain why Euro Manganese is focused on the Czech Republic.
Manganese has a growing role in the production of electric vehicle batteries, as a key ingredient in lithiated manganese dioxide (LMD) batteries. A typical LMD battery uses 61% of manganese and only 4% lithium and reportedly has numerous benefits over lithium-ion batteries, including higher power output, thermal stability, and improved safety.
As is the case with many of these precious metals that could play a key role in renewable energy technology, the rate of supply and demand is constantly changing as large nations play catch-up and often attempt to stranglehold emerging markets.
Since the US added manganese to its "critical materials" list in 2017 in anticipation of this increase in demand, the price has been incredibly volatile and that's had an equally volatile impact on the Euro Manganese share price.
