[Ferro-Alloys.com] Euro Manganese Inc. Discusses Chvaletice Manganese Project Progress and Market Outlook for High-Purity Manganese Trancript

Company Participants

Martina Blahova - CEO, President & Director

Conference Call Participants

Jane Morgan

Andrew Zemek

Jane Morgan

Good morning, and welcome to the Euro Manganese Investor Briefing. I'm Jane Morgan, Investor and Media Relations Manager. And today, I am joined by President and CEO, Martina Blahova, and industry expert, Andrew Zemek, who'll be providing a company and market update, respectively, as it relates to Euro Manganese, followed by a Q&A session. Good morning.

Martina Blahova

CEO, President & Director

Good morning, Jane.

Jane Morgan

Martina, I might just hand to you first up to provide a company update.

Martina Blahova

CEO, President & Director

Thank you, and thanks, everyone, for taking the time today for this webinar. You will hear from Andrew that high-purity manganese is already used in many EV batteries today and how it's going to play even a more prominent role in the future as the EV space grows and also as the energy storage markets are evolving and also due to its ability to improve battery efficiency, decrease costs and how it's used in the defense sector.

High purity manganese, most of it, over 90% is processed in China. And this poses a high technology and supply chain risks, which is why our project is so important. Euro Manganese is developing the Chvaletice Manganese Project in the Czech Republic. As a member of the EU, the Czech Republic is offering a stable and business-friendly environment, and that's where we have been operating in the last close to 10 years.

We have the only sizable manganese deposit in Europe, and our project is the only integrated one, which means that the deposit and the processing facility are in the same location. Additionally, this deposit is hosted in historic tailings. So by reprocessing these tailings, we also are reclaiming the site and it has significant ESG benefits.

The 2 battery-grade products that we were processing and producing in our plant are the high-purity manganese metal and then partially, this will be converted into high-purity manganese sulfate. Going through this metal route gives us the optionality to supply the metal and the sulfate market, but also supply customers who will be producing other feedstocks for the batteries as the cathode technologies and chemistries evolve.

Over the last quite a few years now, we have achieved several significant milestones at Chvaletice. We have obtained the environmental impact assessment approval in March 2024. And we have also obtained the permit to extract the mineral from the deposit. this permit is not time restrained. And these 2 permits are the most important in the permitting process of the project. We have secured other permits that preceded the EIA and the extraction permit and also we're working on the permits that are following these two.

The project was selected as a strategic project under the EU Critical Raw Materials Act earlier this year and also as strategic deposit by the Czech government. That means that permitting and some funding options are available to us, faster permitting and some financing options. So we'll see how that translates into real action and benefits, but it's definitely a great start.

By now, we have 5 term sheets with potential customers. Those are nonbinding. However, they are for both the metal and the sulfate, and we have already delivered quite a few samples to potential customers for testing. One of the major milestones we achieved is the commissioning and the operation of our demonstration plant at site. This is quite a sizable demonstration plant. It's hosted in 2 sizable buildings. We have produced both products on spec in the plant, the metal and the sulfate.

By doing that, we have proven the flow sheet that we laid out in the 2022 feasibility study. We have produced bulk samples that are smaller samples are now delivered to potential customers. We have some still available. And we have obtained quite a bit of learnings and experience with the production with the whole process. By doing that, we have extracted the know-how of this processing from China, and we have made it EU and Czech Republic norms compliant.

What the demonstration plant showed us is that there are certain improvements real or potential for efficiencies, and we are now running a process that -- a program that is focusing on these efficiencies and optimization of the process. The main focus is on improved recoveries, on optimizing the equipment sizing and the layout of the plant, on reduced reagents and consumables and enhanced process controls.

As we are progressing through this work, there are implications to the future commercial plant. And in the next few months, as we are completing this internal piece of work with the help of external engineers, we will be making decisions on the next phase of the development of the project, including the potential updates of some of the technical studies and the sizing of the commercial plant.

I'm happy to have Andrew Zemek today on the call. He has been the market -- manganese market analyst for the past 7 years, and he works with the International Manganese Institute, where he also held the function of Deputy Chairman of the High Purity Manganese Committee. I will now hand it over to Andrew to talk about the high-purity manganese market.

Andrew Zemek

Thank you very much, Martina. Welcome, everybody. I understand we have quite a following today. So I'll try to be brief, which I always have difficulty with because there is so much to say. But anyway, by means of introduction, my background is in metals and mining, 35 years in the sector, of which the last 7 years, I spent almost exclusively on manganese in batteries.

My other metal was molybdenum, but that was about 20% of my time and about 80% of my time was essentially manganese in batteries. So I'm here today to talk about the market and its many facets, and slides will be available afterwards, so you don't have to keep snapping or whatever, taking notes, you will get them. And I understand the session is also recorded. So we'll have this as well. So without further ado, let me start screen sharing, and then we'll take it from there. Just one second. Can you confirm, Jane?

Jane Morgan

Yes, we're good to go.

Andrew Zemek

Okay. Fine. Okay. Let's start with the manganese as a metal and the manganese market in general, and then we will switch on to the battery business and the main products of the Chvaletice plant of Euro Manganese and where it's going, et cetera.

So what is manganese? It's essentially a steel alloy metal. And it's no accident that I'm starting with the periodic table. And as you can see, it's sitting next to iron, next to chromium, cobalt, nickel, molybdenum. And that's obviously important for the steel alloying role of it, but it's also important for batteries. In particular, its neighborhood to iron because it can replace iron in LFP batteries. And that's one of the big themes in the battery industry today is the replacement of iron with manganese in LFP batteries, which last year accounted for 70% of all batteries produced in China. So it's a very important thing.

So about 90% of manganese mined annually -- globally is used in steelmaking and the remaining 10% in other applications, of which only about 1% is used in rechargeable batteries. So from the point of view of the whole market, it's a niche. It's a small dark corner of the market, but it's extremely dynamic and very interesting.

Manganese is mined in about 30 countries, but the first 4 producers account for about 80% of global production. You can see it on the map, #1 is South Africa; #2, Gabon, #3, Australia, then Ghana and so on, as you can see on the slide. The map is showing you the ranking of the last 10 years. The chart on -- the bar chart on the right is showing you the ranking in 2024. We had a little bit of slippage of Australia to the #4 place because of the typhoon damage of one of the largest manganese mines in the world [indiscernible] to South32 and that knocked down some production.

So the production of about 20 million tonnes, which is comparable to production of copper or aluminum, that's expressed in tonnes of metal contained, not the ore. The ore is very variable. It can be from something like 5%, 7% to 55% manganese, typically about 38%. That's the kind of industry standard and fluctuating around 20 million tonnes annually.

We have plenty of resources for future mining. In fact, we have enough deposits already discovered to last for about 300 years at the current rate of mining. So we don't need to find any new discoveries, mining is not an issue. Then there are, of course, so-called manganese nodules at the bottom of the sea, which some people want to mine. They are at 4,000 to 6,000 meters below the sea level. So it's not an easy mining. It may or may not happen. But the message from this slide is we have enough deposits. That's not an issue. The issue is processing.

As I said, as China is one of the largest producers of steel in the world, no wonder that they are also the largest consumer of manganese and also the largest importer because they themselves, they produce very little, only about 4% of global production. So they import 16x more than they mine and they consume it all and they make it into other products and then export it. So the breakdown of the market is as follows: about 91% of total manganese mined is consumed as ferroalloys in silicon manganese and ferro manganese, which is subsequently used in carbon steel, stainless steel and so on.

And not surprisingly, China is, again, dominant here. So only 6% -- only 4% of global mining production, about 61% of ferroalloy production is happening in China. And within the remaining 9%, 10%, which is not going to non-steel applications, China is simply huge. It's about 95% of processing of manganese for other products than ferroalloys is happening in China. And we will delve into it in a minute in greater detail.

When it comes to the battery -- so-called battery metals, I say so-called because graphite, of course, is not a metal, but it's mentioned in the same breath as other metals. Manganese is particularly disadvantaged from that point of view. As you can see on this slide, in this slide, 95% of manganese, which is required for batteries is processed currently in China. So there is a huge need for diversification and development of non-Chinese projects for reasons essentially of security of supply.

It's bad in other metals, too, but particularly in manganese, as you can see here. So I understand we have plenty of retail investors on this call and not all of you are probably battery experts and so on. So a very quick 1-minute, 2-minute overview of the battery market as a whole, so you understand better the rest of the presentation and how it fits with the Euro Manganese project and future developments in this industry.

So we essentially talk about 2 types of batteries, primary batteries and secondary batteries. Primary batteries are the ones which are -- which you throw away. They are nonrechargeable. They are your usual AAs, AAAs and so on. And they consume also a lot of manganese. In fact, half of manganese consumed in batteries of any kind is used in primary batteries. And then we have secondary batteries, and they essentially break into about 3 groups. It's your good old lead acid battery which you have in your car, unless your car is electric. But even in the electric car, you will find a small lead acid battery, 12-volt battery.

Then you have the elephant in the room, which are the lithium-ion batteries, and I will say more about them in a minute. And finally, we have the emerging new competitor to lithium-ion batteries called sodium-ion batteries. And you can find them under different abbreviations. Sometimes people use LIB lithium-ion batteries or SIB sodium-ion batteries, also the li-ion, Na-ion for sodium, so a variety of names.

And we'll come to the sodium at the very end because it's the emerging thing and very good for manganese, because sodium-ion batteries use an awful lot of manganese and will bring manganese to places which is currently not used in the battery business. But let's concentrate on the main one, which is lithium-ion batteries. So essentially, we have 2 big families of these batteries. One is called NMC, which stands for nickel, manganese, cobalt and then followed by 3 letters, which -- sorry, 3 digits, which signify the proportions of these batteries. So for example, NMC622 will be 6 parts nickel, 2 parts manganese and 2 parts cobalt.

And then you have another family of very small family, small family because there are only 2 members of the family, LFP and LMFP, which stands for lithium iron phosphate, F for iron, FE and P for phosphate. And then obviously, there are other varieties as well, but these 2 groups are the most important ones.

And about 70% of lithium-ion batteries are consumed by the electric vehicles and about 20% currently in BESS, battery electric energy storage systems. And they are developing very rapidly, the stationary storage batteries of grid batteries.

Portables, which are your laptops, your mobile phones, your electric shavers, your toothbrushes and the rest of it, they are only about 4% of all batteries consumed by -- measured in kilowatt hours. And these are the metals which are used by rechargeable batteries. So lithium, nickel, manganese, cobalt, iron, phosphorus, sodium, copper, aluminum and C4 carbon, which is a form of -- graphite is a form of carbon, right?

Copper and aluminum are mostly used as electric conductors. So they are not actually holding any charge, maybe except of aluminum. But all these other metals are going into the cathode of the battery, which is the positive electrode of the battery and anode is just carbon, essentially just graphite -- powdered graphite.

So it is growing still very fast. So we are expecting 7x growth in battery demand overall. Majority of it is going to be made by electric vehicles, stationary storage, not far behind, but still much less than electric vehicles. And I have to say here straight away that for now, manganese is not used by stationary storage people. They prefer the LFP batteries, as I call them straight LFP batteries, which are not using any manganese at the moment, but they will be using it in the future. We'll come back to that in a minute. So it's essentially the transportation story for us, manganese people.

And the pie is growing very rapidly. So in 2025, all batteries produced were about 1.7 terawatt hours of capacity. What we are expecting by 2035 is the growth to about 7 terawatt hours, which is 4x from now to 2035 or 7x by -- from now to 2040. So the pie is getting bigger. And it's really taking off despite of President Trump efforts to sort of delay the electric revolution, despite the hiccups in Europe, it's still going strong. So we are expecting about 23% growth of electric vehicles sales in 2025.

Year-to-date, we had -- we already have 28% growth globally January to August. So it is kind of on target. However, it has its own challenges. But it's going ahead. It's -- the EV revolution hasn't been canceled or delayed.

China is a juggernaut really. It may come to many people as a surprise that in -- China produced more electric vehicles last year than any type of vehicles in the United States. Total production of passenger cars and light-duty vehicles in the United States was about 10 million vehicles. In China, they produced 30 million vehicles -- sorry, 20 million vehicles, of which 10 million were electric vehicles. Every second car sold in China is electric today. But in Europe, which is here in blue, U.K., Germany and France sell more electric vehicles than the United States. So something to remember, it's catching up very quickly with China, United States now in the sort of distant third place.

Stationary storage is also the big -- very big story. What you see on the picture is a solar farm in California with 3.3 gigawatt hours of batteries attached to it. That is 3x bigger than the typical nuclear plant in the United States, which is about 1 gigawatt hour. And there are even bigger plants under construction in Saudi Arabia and in Chile up to 12 gigawatt hours, 12x the typical nuclear plant in batteries. That's unbelievable.

So we have the anode and the cathode. What we are interested is the cathode. What is the cathode? It's an aluminum foil covered with the mixture of these metals, which I was talking about. The anode is essentially a copper foil covered with powdered graphite. And the cathode is the most expensive part of the battery. 30% to 50% of battery value comes from the cathode. So how does manganese fit into all this? Let's start with the price chart because it's all about the economy. So as you can see here, these are the actual prices of these metals in dollars per tonne of metal contained in the relevant battery chemical, which is typically a sulfate. So manganese is 7 to 23x cheaper than cobalt and 4 to 8x cheaper than nickel. And as you can see from this chart as well, the cobalt is very volatile. Nickel is less volatile, but still volatile. Compared to those 2, manganese is extremely stable.

So if you are a battery engineer and I come to you and tell you that you can use manganese instead of cobalt and you will be paying 7 to 23x less for this material than you paid before, and you will have virtually no volatility of prices like that. What would you say? What would you do? Would you still stick to cobalt, particularly if the country, which accounts for 70% of production of this metal is introducing bans and export restrictions and God knows what and prices jumping up and down all the time. It's not the way to run business if you are a battery maker. So no wonder that this volatility of cobalt led battery engineers to looking for alternatives. And what they found was essentially use more manganese. That was the answer.

When we look at the cost component of the modern day battery, you can hardly see the cost of manganese here. That's the actual breakdown of from 2024 per kilogram of battery of NMC811, 8 parts nickel, 1 part cobalt, 1 part manganese. You can hardly see it. But there are manganese batteries which are consuming much more manganese. So on the side -- in the 2 side panels here, you have the sort of maximum percentage the manganese can cost in a battery. So I use the battery which is consuming 1 kilo of manganese per kilowatt hour more at the highest price we had in 2025. So that will be 12% of the battery.

In 2022 prices, that was like just 5%. So still insignificant compared to other battery metals, which are making up the cathode. Most of you, even those who are driving electric cars, probably don't know what kind of battery you have. You say you have lithium-ion battery, and that's all you know. But from the point of view of material use, it matters a lot which type of battery it is. So here is a very quick review of these different types, which I mentioned. 11 out of the currently 15 battery types being used for electric vehicles are using manganese but are not using manganese in the same proportion. And here is the elephant in the room.

The current NMC90-0.5-0.5 is using 42 grams of manganese per kilowatt hour, but LNMO is using over 1 kilogram of manganese per kilowatt hour. So if we are shifting from low manganese batteries to high manganese batteries without the change in number of kilowatt hours consumed by the industry, without the number of change of vehicles produced, we have significant uplift in demand for manganese because of this higher manganese loading or manganese intensity, as I call it.

The change of LFP batteries into LMFP batteries, so essentially LFP batteries with -- including manganese, replacing 60% to 80% of iron with manganese. They also have very high manganese loading, 300 to 600 grams per kilowatt hour. So this is what is happening that we are shifting towards those high manganese batteries with higher manganese loading, and this is like a positive double whammy. We have more bigger pie, more gigawatt hours and per kilowatt hour, per gigawatt hour, more kilograms of manganese. This is -- the mix -- the battery mix is changing all the time. So by 2019, we thought the LFP batteries were heading for the scrap keep. They were not very efficient just for budget vehicles, low range, like 100 kilometers on a single charge and so on, and nobody believed in them.

But then what happened, they had a revival, a renaissance because of a variety of technological developments in LFPs, and they became very strong. By 2024, they accounted for 46% of all batteries produced globally. And in China, this year, LFPs account for 77%. So that's constantly changing, and we need to monitor it to look at where it's going. So where it's likely to go in the future. So that's my projection, market projection of 2035. As you can see, LFPs and LMFPs, the ones which are 600 grams of manganese per kilowatt hour. Together, they are at 68%. And then in red, you can see high manganese batteries as well and this is an NMCA and so on. So in total, manganese using batteries account for 57% of 2035 projected consumption of batteries.

So we'll have more manganese gigawatt hours, bigger pie 7 terawatt hours projected and more manganese per kilowatt hour of batteries. But if you don't believe me because you say you might be wrong, et cetera, that's -- here is somebody else, which is McKinsey & Co. And they hedge their bets. They say, we might see that many LFPs and LMFPs. But actually, we think that maybe they will take a market share from these batteries here up other and maybe they will take a market share from the NMC batteries. So in total, they are assuming the LFP stroke LMFP batteries may in total, consume 80% of the -- 80% share of the market.

And other people are also predicting that -- that's from Benchmark Minerals recent presentation during the London Metal Exchange Week. So year-to-date, 2025, LFPs at 52% globally, NMCs at 42%. However, this is not equally distributed around the world. So China is all about LFPs and LMFP, 79%. In Europe and the United States, it's still NMC story. So nickel, manganese, cobalt with more manganese and less cobalt gradually.

And the market shares of these relevant regions are as shown. So obviously, China dominates, 84% of all batteries are produced in China, 4% in Europe, 6.6% in the United States and 5% in the rest of the world. However, again, this is changing all the time. So I highlighted one of the comments here from LinkedIn, from Ken Hoffman, who is very knowledgeable about this work from Bloomberg and then from McKinsey and many other battery-related companies says, "With battery density and lower cost, LMFP, the LFP with manganese and LMR, lithium manganese-rich with in our work be dominated -- dominating patent industry for the next 5, 10 years."

And that's the light motive, what we keep hearing all the time about the manganese-rich batteries exploding, so to speak, not literally, but in demand terms. In fact, they are quite safe. So here is just a sample of different carmakers, battery makers and chemical makers and their road maps for manganese-containing batteries. Wherever you see the letter M in red, these batteries are using manganese. And that's from somebody else, that's from CRU China. Whatever is in color is using manganese, whatever is in gray is not using manganese. And as you can see, there is a lot of color in this chart and less and less gray. So again, manganese.

BASF, the German chemical giant, up to 80% of manganese in the cathode. Umicore another European power chemical power in battery making, HLM, highly lithiated manganese, 60% manganese in the cathode. The recent news from mid-2025 about Ford General Motors and LG Chem developing the -- they call it LMR, lithium manganese-rich with 65% of manganese. Here are some headlines from the industrial press and one Internet publisher even declared in Spanish [Foreign Language] because these batteries are going to be mostly produced in the United States, but China is not far behind in this particular technology.

So that's one trend, manganese-rich batteries. Then there is another trend. As batteries are becoming more energy dense, so more compact, you get the same amount of kilowatt hours from the smaller and smaller cube, then the battery pack can be bigger because you are restricted by the dimensions of the vehicle. So if your battery is smaller, your battery pack can be bigger, hence, can have more kilowatt hours. So today, typically, it's about 50-kilowatt hours per vehicle. But in China, we already have top vehicles with 140 kilowatt hours per vehicle. And they give you the range of over 1,000 kilometers on a single charge. Of course, not every vehicle will have this big battery pack, but that's essentially the trend, bigger and bigger battery packs. And Europe and the U.S. will have to follow because otherwise, they will be outdone by China.

So this is -- this means that consumption of manganese per vehicle will also grow even if the number of vehicles didn't increase, but it will. I very much recommend you listen to his presentation if you Google that Red Cloud's Pre-PDAC 2025 Mining Showcase, Ken Hoffman's speech about increasing battery packs. That's again from CRU trends, high nickel down, mid-nickel up. That's good news for manganese because mid-nickel means less nickel, more manganese in the chemistry. LMFPs up and pretty much endorsement what I already said.

So manganese is every battery's friend, whether we are talking lithium-ion, sodium-ion, NMC, LMFP, LMR, they are all using manganese. Important thing is about sodium-ion batteries. They are kind of emerging. They are already in the electric bicycles and electric scooters and so on. They are about to start-up making an appearance in electric vehicles, but they are not there yet. What is important for us is that they are very manganese hungry. They use about 800 to 1.2 grams to 1.2 kilograms of manganese per kilowatt hour, which is fantastic news for manganese. And they also bring us into this very dynamically developing sector of stationary storage because at present, we manganese people, we are kind of cut off from that because stationary storage people want straight LFP batteries for whatever technical reasons of how the stationary storage works.

So we are not benefiting at the moment from the fact that the stationary storage is so rapidly growing. But once they start using sodium-ion and that will be the first major application in terms of gigawatt hours of sodium-ion batteries will be in stationary storage. Then we are in stationary storage.

So do we have enough capacity and this translates into the demand for the [indiscernible] product? Yes, we do in Europe, certainly. In fact, we possibly have too much capacity, to be honest, in terms of gigafactories announced. That's the plan for gigafactories in Europe for 2030. You can read through it at your leisure when you get the slides. At the bottom, you see the current Benchmark Minerals projections of increase of vehicles -- battery sales in respective markets.

So China is expected to go 25% up in 2025. Europe, 28% up after the disastrous 2024 when the consumption of batteries actually shrunk by 2%. But the United States, Mr. Trump should be smiling because it's only growing 0.1% in 2025. So Europe is the dark horse after China. And Europe is not just about the battery factories. If you go to this website, battery-news.de, it's a German news website specializing in batteries. You will find 14 different maps of Europe there with the whole ecosystem of batteries. So battery cell production, of course, gigafactories, but also machine production for battery factories, battery components, recycling, the whole lot. I very much recommend this website and reviewing some of these maps.

And Europe could be, theoretically could be self-sufficient in batteries. So that's a slide I borrowed from Rystad Energy that was presented during the London Metal Exchange week in October. The solid line is showing the demand from the -- demand for batteries from the electric vehicle makers. And the colored section shows potential output from the factories, battery factories, which are announced by relevant companies, which you can see here on the right. So at the moment, there's a big gap. So these batteries have to be bought from -- essentially from China and from Korea and some from Japan. But in theory, by 2030, Europe could potentially be self-sufficient just buying batteries made in Europe. Whether this would happen, it's another story because we had some setbacks in Europe.

We had the bankruptcy of Northvolt and British Volt and the Italvolt and it's not all rosy, but we still have 40 factories in the pipeline. Another trend which is developing, I will probably finish in another 5 minutes. So I'm sorry for those who are in a hurry. It's the changing feedstocks. Until about 2 years ago, that was just a story about electrolytic manganese metal, the metal flakes, like the ones you can see here and manganese sulfate, HPMSM, high-purity manganese sulfate monohydrate. Both of them come in 2 flavors, so to speak. So ordinary quality for other industrial purposes and high purity, which is for batteries.

And the 2 shouldn't kind of be mixing together because the others contain selinium, which is a big no, no in batteries. To understand why we have new feedstocks developing like manganese carbonate or manganese oxide, Mn304, you need to have a very quick look at the process of making batteries. So you essentially mix the sulfates together, you co-precipitate, then you bake them, you mill them, you grind them and you get so-called PCAM precursor of cathode active material. So it's essentially the mixture of these metals baked and ground to the relevant size. And when they come to the battery factory, you add lithium, so they get lithiated, you add binders and solvents and this becomes a CAM, cathode active material.

And then you coat your aluminum foil and that's your cathode. And that's a wet method using water. Everything is dissolved in water. Now there is a new development, which is dry coating, which doesn't require water-soluble materials. And when it comes to manganese, the only water-soluble material is manganese sulfate. So with wet method, they had to use the sulfate. There was no other option. With dry method, they have access to other materials like manganese carbonate, like Mm304, which are -- don't have to be dissolved in water because that's the dry coating process.

What about the use of metal? The metal flakes can be used either for making the sulfate as the Euro Manganese plant is planning to do by dissolving it in sulfuric acid or can be used in the powder form. And there is a Canadian company, Nano One, who have the metal to CAM, metal to cathode active material process, which is replacing all this with one sort of patented process. And this process is using powdered metal. If they get traction and get commercial, which they might with partners like Rio Tinto, Sumitomo, both 5% stake, Umicore and BASF and now they got CAD 5 million from the Canadian government as well. And then we will probably see much more use for manganese metal flakes rather than just the sulfate.

Similarly, this main contender trying to sort of take the market share from manganese sulfate, MnSO4. This main contender is Mn304. And this sulfate can be made either through -- from the sulfate, converting the already existing MnSO4 into Mn303 (sic) [ Mn303 ] or from metal. And in fact, last year, 72% of all Mm304 made in China was made from the metal. So we are expecting a greater consumption of metal flakes in a powder form in this -- in production of these new feedstocks.

At the bottom of the slide, you can see the different varieties of feedstocks and their percentages how much of the manganese market they claim. So in total, it's about high-purity manganese for batteries is about 1.17% of the total manganese market. As I already mentioned many times before, about 95% of processing happens in China. There is -- for the sulfate, there are just 3 plants outside of China for the electrolytic manganese metal, there is just 1 plant outside of China and one plant planned, which is in Chvaletice. And here on the sulfate side, there are 14 plants planned.

However, many of them are very early stages of, say, exploration companies. They may become the producing mine in the factory in 10 years' time. So we try to assign probabilities to them. At the moment, these are the countries where sulfate is produced outside of China. They account for the remaining 5%. Kazakhstan is the most recent addition to it. They only started producing in 2022 and the production for the time being is small. Belgium, that's the American company called Vibrantz, the only company for many years who's been producing sulfate outside of China. And there are some other smaller producers elsewhere.

That's my projection of supply and demand. The demand is in the red line. The supply is in green. The darker the green, the more certain -- the higher the probability of this project happening. So at the very bottom, you have existing producers, then the producers just about to become producers and then more and more sort of kind of nebulous projects. The yellow is the Mn304 supply from one particular plant in China, which had a huge plans to produce a lot of it. However, for now hasn't produced a single tonnage yet. And they had a very sort of checkered record of delivering on their promises from the past. That's the Ningxia TMI plant.

What -- to what extent this is likely to happen? It's hard to say. There are so many moving parts between geopolitics, tariffs, restrictions, trade wars and so on and so forth. So that's my best guess, best informed guess how the supply and demand situation might develop for high-purity manganese products. I'm not using the word sulfate any longer because it's not a sulfate alone anymore.

This is also a borrowed slide from SC Insights from, again, presented very recently in the webinar. And what I -- that's their take on demand growth for different battery metals. I want to draw your attention to the manganese here, which is the steepest of the growth curves among all the other metals. I put question marks about others because I have some reservations about this. Cobalt is essentially has been metal. It's being eliminated gradually from the batteries for reasons I explained at the very beginning of this presentation because the pie is getting bigger and bigger, the consumption is still growing but probably in 10 years' time, we'll see very little cobalt in batteries.

Nickel may be again, suffering because of huge popularity of LFP batteries and now LMFP batteries as well. Lithium for now without a threat, sodium-ion will eventually eat into its market share, but not just yet. Probably we'll see more significant adoption of sodium-ion batteries by the end of the decade. But it's essentially just to endorse the view that the demand from manganese is growing really, really fast.

You may ask about recyclability. And is manganese recyclable? The short answer is yes, and there are many factories, recycling factories being built in Europe, as you can see on this map. However, most of them will be not recycling manganese essentially because it's too cheap. That's the quote from one of the recycling guys from Europe who said essentially, "Europe can shred. We have the rules, but not the tools." We process batteries, get black mass and then export it to China to be made into proper cathode active material. So essentially, manganese is not being recovered unless it is in the direct so-called direct recycling, which is one of the recycling routes at the moment in very much in minority of plants.

Anyway, I did an exercise to see how much supply in Europe can be satisfied from recycling if there was recycling of manganese and came to conclusion that if only those direct recycling methods were taken into account, it may satisfy about 2% of the demand in 2030. And if everyone -- every recycling plant was recovering manganese, which is extremely unlikely, then they would produce enough to satisfy about 20% of European demand.

So in short, the recycling -- recycled manganese is not going to replace the virgin manganese required. Regarding European policies, there are targets for recycling lithium and recycling cobalt, nickel and copper. There are no targets for recycling manganese.

And finally, last couple of slides about prices. They are not what they seem to be. As you would expect, manganese sulfate is a premium product compared to manganese metal. Manganese metal is the red line. That's the metallurgical variety. And obviously, it's a premium product to manganese ore. Strange things happen occasionally where the prices get reversed. But on average, it's about 30% to 50% premium per unit of metal contained in the product dealing with manganese sulfate versus manganese metal.

And this is an index showing the development of prices of different battery metals since the beginning of 2024. As you can see, manganese here in red, together with nickel sort of above the water, lithium hydroxide, lithium carbonate underwater all the time. Cobalt went up now because of the export ban from the Congo. I think the Congolese are shooting themselves in the foot by doing this. There will be even less cobalt in batteries as a result of it. But for now, the prices are shot up through the roof.

And when we are talking about prices, the price which is most often quoted is the price ex works China. This is a domestic Chinese price, which is not the same as price delivered to Europe or delivered to United States. And this chart is showing you different components and how the $800 per tonne price in China becomes nearly $1,500 delivered to Europe or even more than that delivered to United States. So please bear this in mind when you are looking at the screen or newspaper or whatever, Bloomberg feed and you see $800, it's $800 ex works in the middle of China. By the time it's delivered to Europe, it becomes $1,500.

Sadly, there is no official quotation of European prices of high-purity manganese sulfate for batteries as yet. So we only have anecdotal evidence from talking to industry insiders and so on about what the prices are there.

And so finally, the key takeaways, which I will not be reading through because you've heard it before. But when you get the slides, you will have them all here. And this brings me to the end of my presentation. I'm sorry, I've overrun, but essentially, there is so much to say.

Jane Morgan

Wonderful. Andrew, thank you so much for that. I might -- oh, you have stopped sharing. So that's great. Look, a lot of the questions that did come through, you've answered them throughout your extensive presentation. And as Andrew mentioned, we have recorded this, so we will be sharing that along with the slides in the coming days.

Question-and-Answer Session

Jane Morgan

But I'm going to start with some questions for Martina now. So Martina, just after hearing Andrew's perspective on market dynamics, how do you see Euro Manganese positioning itself to capture the strongest opportunities within that evolving European battery materials landscape?

Martina Blahova

CEO, President & Director

So we -- with our plant in the Czech Republic and being integrated and not being dependent on ore coming from anywhere else. It is a fine material. It is right there and ready to be processed. So that gives us security of supply of the input. We are in the right region. We are in the right jurisdiction. We have not changed the process. We have proven that the -- and you can hear that from -- deducted from Andrew's presentation that going through the metal is the right way to go because it gives us optionality.

We can convert a lot of that metal into sulfate because that is currently the preferred chemical, but we also have the option to react to the market if the metal prices are higher and if there is a demand for other chemicals. So it gives us optionality and the option to supply different customers, not just within Europe, but also in the rest of the world.

Jane Morgan

Thanks, Martina. Just another one that's come through. So as the company moves towards project financing and construction readiness, what gives you the most confidence in the company's ability to execute? And what are the top priorities for the team over the next 2 quarters?

Martina Blahova

CEO, President & Director

So one of the top priorities I mentioned is the optimization program. We're looking at what we've learned from the demonstration plant. We're looking at a more optimized layout, even though the prices have gone down since we've put out the feasibility study. We have also identified savings in some of the reagent consumptions. So that decreases your OpEx. The optimized layout could decrease the CapEx costs and recoveries obviously increase how much you can produce at the same cost. So all these -- all this work that we are undergoing should give us a good picture of how we can still make the project a success in the future in spite of the changing market.

Jane Morgan

Thanks, Martina. And this one comes through a few times, in fact. So just on current spot prices for manganese, is the project profitable on an all-in sustaining cost base?

Martina Blahova

CEO, President & Director

So the actual price, as Andrew said, is not public. There's no quoted market. So it's the -- based on Andrew's work that he has done for us in an updated market study, that plus the optimization work is to ensure that we're still competitive and have a project to offer. So that's, again, the optimization study once we have the results, we will share that.

Jane Morgan

Wonderful. Just mindful of time. I think finally, what would you say to investors about why now it's an exciting time to be following the Euro Manganese and maybe the high-purity manganese sector more broadly?

Martina Blahova

CEO, President & Director

So we've heard a lot about how manganese is playing a big role and is going to be playing a big role and how the processing capacity is all concentrated in China pretty much. So being the only European project for now and others in mainly North America being less developed and still have a way to go, we have the first-mover advantage.

And as -- going to repeat, again, we do have that optionality with going through metal. We are at the right time at the right place. It's -- manganese has been kind of under estimated a little bit and not mentioned as much, but I think now it's getting a lot more traction, and it is a solution to the price and range question that a lot of the mass market may have.

Jane Morgan

Wonderful. Well, that's actually what we've got time for today, and it looks like we have covered all those questions. If we have missed anything, please feel free to reach out by the contact details on the bottom of our ASX releases. But Martina and Andrew, thanks again for joining us.

Martina Blahova

CEO, President & Director

Thank you very much, Andrew. Thanks, everyone.

Andrew Zemek

Thank you. Thank you very much. Thanks, everyone.

• [Editor:tianyawei]