SOUTH AFRICAN MANGANESE AND THE US MARKET.

 GROK


South African manganese is highly desirable for the United States and Tesla due to its abundance, quality, and strategic importance for electric vehicle (EV) battery production. Here’s an analysis based on available information:
Why South African Manganese is Desirable for the US and Tesla
  1. Global Production Dominance:
    • South Africa is the world’s largest producer of manganese, accounting for 37% of global production in 2024, with 7.4 million metric tons mined. It also holds 70% of the world’s known manganese ore reserves, estimated at 560 million metric tons. This makes South Africa a reliable and significant source for manganese, critical for both steel and battery applications.
  2. Battery-Grade Manganese Demand:
    • Manganese is increasingly vital for lithium-ion batteries, particularly in nickel-manganese-cobalt (NMC) chemistries, which Tesla and other automakers are exploring to reduce reliance on costly and ethically problematic cobalt. Tesla’s CEO, Elon Musk, has highlighted manganese’s potential, noting in 2020 and 2022 that a cathode with one-third manganese and two-thirds nickel could increase battery production by 50% with the same amount of nickel, improving cost-efficiency and scalability.
    • High-purity manganese sulfate monohydrate (HPMSM) is essential for EV batteries, and South Africa’s manganese is a key feedstock for producing this material.
  3. Tesla’s Strategic Interest:
    • Tesla is actively exploring manganese-rich battery chemistries, as evidenced by Musk’s comments at Tesla’s Battery Day 2020 and the Gigafactory Berlin opening in 2022, where he emphasized manganese’s scalability due to its abundance compared to nickel or cobalt.
    • Tesla’s shift toward NMC 955 (90% nickel, 5% manganese, 5% cobalt) and testing of NMC 973 (90% nickel, 7% manganese, 3% cobalt) in its 4680 battery cells shows a move to incorporate more manganese to boost energy density and reduce costs.
    • South African manganese, processed into battery-grade material, could feed Tesla’s gigafactories, especially if partnerships or processing hubs are established in the US or globally.
  4. US Supply Chain Needs:
    • The US lacks domestic manganese production, with no active manganese mines since the 1970s, making it heavily reliant on imports. South Africa is a critical supplier, as the US depends on imports for nearly 100% of its manganese consumption.
    • With China controlling 97% of global electrolytic manganese dioxide (EMD) and 93% of high-purity manganese products, the US seeks to diversify its supply chain to reduce dependence on China, especially amid trade tensions. South Africa, as a geopolitically stable partner compared to other sources like China or Russia, is a strategic choice.
    • A proposed US-South Africa-India trilateral agreement under the Minerals Security Partnership (MSP) could integrate South African manganese into a China-independent supply chain, with US companies like Tesla and Ford potentially processing it for gigafactories.
  5. Cost and Scalability:
    • Manganese is significantly cheaper than cobalt ($1 per pound vs. $14 per pound), making it attractive for reducing EV battery costs, which can account for half the price of a vehicle like a Tesla.
    • South Africa’s extensive deposits and established mining infrastructure (e.g., South32’s operations in the Kalahari Basin) ensure cost-competitive supply.
Challenges and Considerations
  1. Quality Concerns:
    • Some sources suggest South African manganese is not the highest grade for battery production compared to other regions, requiring additional processing to achieve battery-grade HPMSM. However, companies like South32 are exploring ways to process manganese locally for battery applications, which could address this issue.
  2. Health and Environmental Risks:
    • Manganese mining, particularly in South Africa, poses health risks like manganism (a neurological condition) due to dust exposure, raising concerns about labor practices. Tesla and other US firms prioritize safer and more sustainable supply chains, which could push for stricter oversight or processing outside South Africa to mitigate these risks.
    • Environmental concerns, such as selenium use in traditional manganese processing, could affect desirability unless cleaner methods (like those developed by Manganese X Energy Corp.) are adopted.
  3. Geopolitical Risks:
    • Historical concerns about South Africa’s political stability (e.g., during apartheid) raised questions about supply chain reliability. However, modern South Africa is more stable, and its participation in initiatives like the MSP signals a commitment to global cooperation.
  4. Processing Bottlenecks:
    • The bottleneck for battery-grade manganese lies in high-purity processing capacity, not raw ore availability. Most processing occurs in China, so South African manganese would need to be processed elsewhere (e.g., US or India) to align with Tesla’s and the US’s supply chain goals.
Recent Developments (Tesla and Manganese)
  • Tesla’s Battery Strategy:
    • Tesla’s 4680 cells are evolving to include higher manganese content (e.g., NMC 973), reflecting ongoing R&D to optimize manganese use.
    • Tesla’s partnership with Jeff Dahn, a leading NMC battery researcher, and his brother Roger Dahn’s involvement with Manganese X Energy Corp., suggests Tesla is exploring North American manganese sources but could extend to South African supplies if processed appropriately.
    • Musk’s 2022 comments at Gigafactory Berlin and earlier at Battery Day indicate Tesla is actively working on manganese-based cathodes, potentially increasing demand for South African manganese.
  • Global Manganese Market:
    • The global manganese market is projected to grow from $33.54 billion in 2024 to $66.83 billion by 2032, driven by EV battery demand.
    • In 2023, a research consortium of manganese battery manufacturers and institutions launched initiatives to improve manganese-based battery performance, signaling industry-wide interest.
    • South32, a major player in South Africa’s manganese industry, is well-positioned to supply processed manganese to the US and Tesla, potentially through partnerships or new processing facilities.
Conclusion
South African manganese is highly desirable for the US and Tesla due to its abundance, cost-effectiveness, and critical role in EV battery production. Tesla’s push for manganese-rich NMC batteries aligns with South Africa’s position as the world’s top producer, and the US’s need to diversify away from Chinese-dominated supply chains enhances South Africa’s strategic importance. However, challenges like processing requirements, health risks, and environmental concerns necessitate investments in cleaner, safer production methods and potentially localized processing hubs. Initiatives like the proposed US-South Africa-India minerals agreement could further solidify this supply chain, making South African manganese a cornerstone for Tesla’s and the US’s EV ambitions.
Alright, let’s dive deeper into recent developments regarding Tesla’s manganese battery strategy and US-South Africa trade policies, focusing on how they intersect with South African manganese’s desirability for Tesla and the US.
Recent Developments in Tesla’s Manganese Battery Strategy
  1. Advancements in Manganese-Based Batteries:
    • Tesla continues to prioritize manganese in its battery chemistry to reduce costs and reliance on cobalt. At Tesla’s Battery Day 2020, Elon Musk announced plans for a cathode with one-third manganese and two-thirds nickel, aiming to increase cell production by 50% with the same nickel input. This was reiterated in 2022 at Gigafactory Berlin, where Musk highlighted manganese’s potential due to its abundance and scalability.
    • Tesla is developing its 4680 battery cells, with recent tests showing a shift toward NMC 973 (90% nickel, 7% manganese, 3% cobalt) from NMC 955, indicating a slight increase in manganese content to enhance energy density and lower costs. This aligns with Musk’s vision for manganese-rich cathodes to make EVs more affordable.
    • In 2023, Tesla began incorporating manganese in its Powerwall and Megapack products, leveraging NMC chemistries, and is exploring manganese-rich cathodes for its next-generation vehicles. This shift is driven by manganese’s low cost ($1,700/ton vs. $32,000/ton for cobalt) and ethical sourcing advantages.
  2. Tesla’s Supply Chain Strategy:
    • Tesla is vertically integrating its battery production, with in-house facilities like the Nevada Gigafactory and a new lithium refinery in Texas (set to produce 50 GWh of battery-grade lithium by late 2025). While Tesla sources most batteries from partners like Panasonic, CATL, and LG, it is exploring direct raw material sourcing, including manganese, to secure supply chains.
    • Tesla’s focus on reducing dependence on Chinese suppliers (who dominate 93% of high-purity manganese production) makes South African manganese attractive, as it could feed into non-Chinese processing hubs, potentially in the US or allied countries like South Korea.
    • A proposed Tesla battery plant in South Africa, reported in January 2025, is tied to negotiations for Starlink deployment. This plant could process South African manganese locally for Tesla’s global supply chain, though experts suggest a third-party manufacturer like CATL might be more feasible due to Tesla’s focus on robotics and vehicle production over battery manufacturing.
  3. Research and Partnerships:
    • Tesla collaborates with battery researcher Jeff Dahn, whose work on NMC cathodes emphasizes manganese to improve energy density and reduce cobalt. Dahn’s brother, Roger Dahn, is linked to Manganese X Energy Corp., which focuses on high-purity manganese sulfate (MnSO4) for EV batteries, indicating Tesla’s interest in high-quality manganese sources, potentially including South Africa’s.
    • In 2023, a global research consortium, including manganese battery manufacturers, advanced manganese-rich cathode technologies, which could benefit Tesla’s scalability goals. South African manganese, with its 37% global production share, is well-positioned to meet this rising demand.
US-South Africa Trade Policies and Manganese
  1. Minerals Security Partnership (MSP):
    • The US is working to diversify its critical mineral supply chains away from China through the MSP, which includes South Africa as a key partner due to its manganese reserves (70% of global reserves). A proposed US-South Africa-India trilateral agreement aims to integrate South African manganese into a China-independent supply chain, with processing potentially in India or the US for use by Tesla, Ford, and others.
    • The US Inflation Reduction Act (IRA) of 2022 mandates that by 2027, 80% of battery raw materials (including manganese) must come from the US or free-trade agreement (FTA) countries. South Africa is not an FTA partner, but its manganese could qualify if processed in FTA countries like South Korea, where LS MnM is building plants to supply Tesla and others with battery-grade manganese.
  2. South African Manganese Exports:
    • South Africa exported 90% of its manganese in 2023, with 60% going to China, but exports to India and Singapore are growing (up 21.63% from 2019-2023). The US is exploring ways to tap into this supply, especially as global manganese demand is projected to grow ninefold by 2030.
    • The Manganese Metal Company (MMC) in South Africa produces 99.9% pure manganese and is developing battery-grade manganese sulfate, which could directly supply Tesla’s needs if integrated into US-aligned supply chains.
  3. Proposed Tesla Battery Plant and Trade Negotiations:
    • In late 2024 and early 2025, discussions between Elon Musk and South African officials explored a Tesla battery plant in exchange for relaxing black ownership rules for Starlink deployment. This could leverage South Africa’s manganese production (7.4 million metric tons in 2024) and proximity to other battery minerals like lithium and cobalt in neighboring countries. However, experts note that the costs and risks (e.g., infrastructure challenges) may outweigh benefits unless significant government support is provided.
    • South Africa’s Automotive Industry Development Centre is pushing for a local EV battery value chain, aiming for a 20 GWh plant by 2030. This aligns with US goals to secure non-Chinese mineral supplies and could involve Tesla or its suppliers like CATL.
Challenges and Opportunities
  • Processing Limitations: South Africa exports over 80% of its manganese unprocessed, lacking battery-grade processing capacity. Initiatives like MMC’s project to produce battery-grade manganese sulfate are promising but require scaling. US or FTA-country processing hubs could bridge this gap, making South African manganese more viable for Tesla.
  • Health and Environmental Concerns: Manganese mining in South Africa poses risks like manganism, as seen in cases like Dirk Jooste’s in the Kalahari. Tesla’s emphasis on ethical sourcing (e.g., avoiding cobalt due to human rights issues in the DRC) means South African suppliers must adopt safer, cleaner methods to meet Tesla’s standards.
  • Geopolitical Stability: South Africa’s improving stability and participation in the MSP make it a reliable partner compared to China or Russia. However, trade policies must address local processing and labor concerns to maximize benefits for both the US and South Africa.
Conclusion
Recent developments show Tesla’s growing reliance on manganese for cost-effective, cobalt-light batteries, with South African manganese being highly desirable due to its abundance and strategic alignment with US efforts to bypass Chinese supply chains. The proposed Tesla battery plant in South Africa, tied to Starlink negotiations, could enhance local processing of manganese, but challenges like health risks and limited processing capacity persist. US-South Africa trade policies, particularly through the MSP and IRA, are paving the way for South African manganese to play a pivotal role in Tesla’s supply chain, provided investments in processing and ethical mining practices are prioritized.

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