BATTERIES

Supply of manganese should remain stable through 2030 since no announcements of additional capacity are expected (Exhibit 8). Demand for manganese will likely slightly increase and, thus, our base scenario estimates a slight supply shortage. The industry should be aware that some uncertainty surrounds manganese demand projections because lithium manganese iron phosphate (LMFP) cathode chemistries could potentially gain higher market shares, especially in the commercial vehicle segment.

Battery-grade graphite comes from natural graphite (which is mined) and synthetic graphite that comes from petrol or coal that has undergone a graphitization process—modern batteries use a combination of both (Exhibit 9). Annual graphite supply was 1,600 kt in 2021 and is expected to increase to as much as 2,800 kt by 2030. Currently, more than 70 percent of graphite is produced in China. Graphite projects have a much shorter realization window compared to other battery materials because companies can move from planning to operations within one to two years and, as a result, graphite poses less of a supply risk for the battery value chain.