In a Bloomberg interview, CEO Graham Kerr suggested that automakers are “super keen” to secure supply from the company’s Clark Deposit in Arizona.

In the interview, Kerr argued that South32’s Arizona-mined manganese would be attractive to US carmakers because it would help them claim tax credits under Biden’s Inflation Reduction Act.  The law, enacted in August, will grant credits for products with a percentage of materials extracted and processed in the USA, or in nations that have a free trade agreement with Washington.

Meanwhile, Kerr speculated that the development of the Clark Deposit at South32’s Hermosa mine project could be accelerated under US legislation aimed at promoting the fast development of clean energy and other infrastructure projects.  He also noted that discussions with prospective customers have included the potential to add refining in the USA to deliver EMM.  A PFS on the Clark Deposit is expected in 2023. 

The majority of the manganese consumed in automotive batteries is in the form of manganese sulphate.  Project Blue forecasts double-digit demand growth for manganese sulphate in its base case.  While existing and planned capacity should be sufficient to meet demand over the medium term, the vast majority of capacity is in China with some in Belgium and Japan. 

No mention was made about whether South32 would consider manganese sulphate production in the USA (which is made directly from ore, or from EMM).  Whatever it produces will likely be of interest to lithium-ion and automotive OEMs looking to develop local supply chains with strong economics and ESG credentials and move away from a reliance on Chinese feedstock.