CPM Group, a New York-based research and consulting company regarded as one of the premier firms in the mining and commodities industry, has presented American Manganese (AMYZF), (AMY.TSXV) with a report showing that the demand of electrolytic manganese should be on the rise, nearly doubling by 2021.
Manganese in High Demand
CPM Group made a number of predictions about the changing electrolytic manganese market over the next ten years. Among those, they predicted that global demand would increase from 1.5 million tonnes to 2.8 million tonnes, China's share of global demand would rise from 87 percent to 89 percent, China's share of global production would fall from 98 percent to 89.4 percent, and that China's demand will outpace its supply capability by 2018. With China due to become a net importer of electrolytic manganese, it could mean a real opportunity for companies outside of China to enter into a rapidly improving market, at the CPM Group report supports this. The report also details how the consolidation and rationalization of the Chinese industry is expected to support a basis of a price level that would support exploration and development of projects outside of China. "Over the next 10 years real electrolytic manganese metal prices are forecast to average $1.98 per pound, reaching an annual high of $2.40 in 2021," the report states. "This is nearly double the annual average price over the last 10 years."
Outlook Strong for Manganese Exploration
The report is very clear in outlining the prospects for electrolytic manganese exploration, stating: "Between 2012 and 2021 real EMM prices are forecast to average nearly $2 per pound, which will support project development activities and provide incentive pricing for bringing new projects online to meet continued growth in demand." With such a strong market opportunity, some companies, like American Manganese, are well positioned to take full advantage of China's rising demand and falling share of global production. Its Artillery Peak Manganese Project in Mojave County, AZ has, according to its National Instrument 43-101-compliant resource estimate, an indicated resource of about 220.9 million tonnes grading 2.84 per cent manganese (13.83 billion pounds contained manganese), and an inferred resource of about 56.3 million tonnes grading 2.84 per cent manganese (3.53 billion pounds contained manganese).
Taken all together, the clear potential in the global market for electrolytic manganese offers great potential for a growing company to expand their share of a dynamic market.