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Chinese Electrolytic Manganese Production Set to Decline

American Manganese, Inc. (AMY.TSXV), (AMYZF) received a report titled, "A Study of Electrolytic Manganese Metal (EMM) Industry and China's Dominating Effects to the Global

American Manganese, Inc. (AMY.TSXV), (AMYZF) received a report titled, "A Study of Electrolytic Manganese Metal (EMM) Industry and China's Dominating Effects to the Global Market", prepared by JF Zhang Associates of Vancouver, BC. The report details the ways in which the Manganese market should be improving, particularly for North American based companies.

Report Highlights Growing Demand, Shrinking Supply

Larry W. Reaugh, President and Chief Executive Officer of American Manganese Inc., states that "The report confirms that Chinese EMM production capacity will likely decline to between 1.3 and 1.5 million tonnes as a direct result of imposed industry consolidation; while the demand for EMM metal could increase from about 1.3 million tonnes today to over 2.6 million tonnes by 2015. The increased demand appears to be driven by the rapidly growing domestic use of high quality specialty steels and 200 Series stainless steel products." This news of reduced supply from China should mean that prices for manganese will at least hold steady, and most likely increase in the near future, leaving companies specializing in manganese exploration and development well-positioned to take advantage of strong market conditions.

Challenges to Chinese Dominance

Reaugh continued to say "The report also highlights that the era of low cost Chinese production is over due to: Depleting resources and declining head grades; rapidly rising labour and energy costs; and increased capital intensity for new Chinese projects to meet much higher regulatory compliance thresholds for increased energy efficiency, safety and environmental protection."

With Chinese production fading, American Manganese may be poised to move into the void after their 2007 acquisition of the Artillery Peak Manganese Properties in Arizona, with Reaugh saying "The Artillery Peak Project is well-positioned with its large resource, and potentially much lower EMM production cost, to capitalize on this emerging opportunity. The company is financially strong with $5 million in the bank, more than enough to complete the ongoing pilot plant test, pre-feasibility study and environmental and regulatory permitting as well as begin the final feasibility report."

American Manganese

American Manganese is a diversified specialty and critical metal company headquartered in the greater Vancouver area and focused on mineral properties and commodities used in the steel industry. The company is primed, with its properties in Arizona, to crack the monopoly that Chinese mining interests have held on the production of electrolytic manganese, supplying 97 percent of global world trade.

Ken Reser, an independent mining research consultant with over 20 years in the metals industry, concurs. Reser wrote in an article published by Resource Investor, "Due to the extensive and advanced-stage work currently being accomplished by American Manganese Inc, at their Artillery Peak, Ariz., manganese deposit…the United States Geological Survey, the USGS and Arizona Geological Survey, the AZGS, are now showing substantial renewed interest in the area and project. The AZGS is now undertaking the remapping and defining of the area’s manganese and other minerals in the Artillery area. The USGS has termed the Artillery Peak deposit as the largest low grade manganese deposit in the US in various reports since the 1940s."

The company's most recent NI-43-101 resource estimate for Artillery Peak reported 13.8 billion indicated pounds and 3.5 billion inferred pounds. It's also important to note that American Manganese is actively moving forward in the Artillery Peak Project, with a contracted pre-feasibility study due out in February of the coming year.

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