Key takeaways from Quarterly

Here are our key takeaways from today’s Q3 results announcement…

Update on demonstration plant commissioning: One of the two shipments of thedemonstration plant modules was unloaded in early August. The second shipment is scheduled to be unloaded later this month.

Update on product qualification: While it was a small detail buried towards the bottom of the Management Discussion and Analysis document, it turns out that the pilot plant has been restarted, and it produced approximately 37kg of HPEMM and 151kg of HPMSM.

We suspected this was the case in our EMN DFS note, and hope that this production run can further product qualification and related offtake discussions.

EMN flagged that 55% of the demonstration plant’s planned first year production has been allocated to a range of players in the battery supply chain. Remembering that EMN is not a mining company and is rather a recycling and processing company, a key challenge is to scale up product qualification efforts via the larger volumes of high purity manganese that the demonstration plant can produce.

Update on offtake discussions: In addition to the five MOUs that EMN has with consumers of high-purity manganese products, EMN noted that it was actively talking to several other parties including battery, chemical and automobile manufacturers, with the intent to enter into offtake contracts. We see this as indicative of EMN’s ability to build competitive tension around offtake discussions to secure the best deal.

We expect high purity manganese products like EMN’s to garner increasingly higher prices as demand from new EV battery chemistries collides with a processing supply chain bottleneck and a dual focussed demand for ESG friendly, domestic production in Europe.

What’s next for EMN? EMN is advancing on multiple fronts and the next major milestone for the company could be an offtake agreement, further progress on project financing, or the commissioning of the demonstration plant pending arrival of the two modules.

You can catch a video of the warehouse where the commercial demonstration plant will live on the EMN website.