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New EU Regulations to Drive our Second Biggest Holding - EMN


Published 18-DEC-2020 11:31 A.M.


3 minute read

Massive, sweeping changes are being made right now to evolve European industries to be environmentally friendly and socially responsible over the next 10 years.

Last week, the EU announced new regulations for electric vehicle battery metals to be sustainably produced AND traceable.

The rules also seek to create an even playing field that will incentivise investment to build a robust European battery and battery raw materials supply chain.

These new regulations are significant for one of our biggest stock holdings - Euro Manganese Inc (ASX:EMN) who are “developing a green and European source of High Purity Manganese ”

Yesterday EMN's share price experienced a small dip as the final tranche of placement shares was released into the market and a few investors took some profit.

We are expecting a share price rebound over the next couple of weeks as the market finishes digesting the new shares.

Euro Manganese

Manganese is a critical raw material in the vast majority of Electric Vehicle batteries.

There is currently no existing manganese production in Europe...

EMN is developing Europe’s largest manganese resource (in the Czech Republic) - this means minimal carbon footprint compared to shipping in manganese from overseas ✅.

EMN intends to reprocess tailings waste from an old mine (meaning no hard rock mining, crushing or milling required, and no new waste generation) making its manganese environmentally superior ✅

Not to mention they are rehabilitating an old mine site in the process - another big ✅.

The EU’s new regulations seek to unify and harmonise the rules across all EU countries, with the key purpose to reduce the environmental and social footprint of batteries sold in Europe.

As regulations tighten up, EV and battery makers are scrambling to secure all important supply chain materials that are in line with the new regulations - EMN’s green, European manganese source ticks all the boxes.

The EU’s New Battery Regulations will mandate the following:

1. CO2 footprint transparency requirements

From 2024, battery makers will need to be transparent about their CO2 footprint, obliging all batteries sold in Europe to display a label quantifying their carbon footprint.

By 2027, there will be limits on carbon generated in their production.

Batteries with the highest carbon footprint will be banned.

EMN’s manganese project is located in Czech Republic, and is surrounded by European auto and battery makers.

EMN is developing the only local primary supply of manganese on the continent.

2. Sustainable and ethical sourcing will be required

New EU regulations demand the traceability of raw materials that feed into EU batteries to be monitored by the use of blockchain and digital passports.

The entire environmental and social footprint of the raw materials utilised in their processing and manufacturing process will be documented.

The same will apply to the verification of human right impacts and other social/health aspects of battery and raw materials production and processing. For example - no child or forced labour, for instance.

Production of battery-grade manganese for local consumption by reprocessing tailings (waste recycling) in Europe makes EMN’s manganese products environmentally-superior

3. The EU will seek to achieve self-sufficiency in sustainably produced batteries and battery raw materials.

Again, EMN is perfectly located with its manganese resource in the midst of Europe’s battery and automaker heartland.

Overnight, we spoke to EMN’s President and CEO Marco Romero on the impact of the new regulations.

We are looking forward to a very big 2021 from one of our largest portfolio holdings - EMN.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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