Brazil's Manganese Edge: From Urucum to Battery-Grade HPMSM

Brazil produces between 1.5 and 2.0 million tonnes of contained

manganese per year, ranking among the top five global producers. Most of

that manganese has historically flowed into steelmaking, but high-purity

manganese sulfate (HPMSM) for lithium-ion battery cathodes is emerging

as a new growth market that Brazilian operators are positioned to

capture.¹

Brazil's Manganese Mines

Brazilian manganese production is concentrated in three principal areas.

Vale operates the Urucum complex in Mato Grosso do Sul and the Azul mine

in Pará, which together contribute the majority of national output.

Menezes and several smaller operations in Minas Gerais add incremental

production. These operations collectively deliver 1.5-2.0 million tonnes

of contained manganese annually, depending on operating cycle and

commodity-price environment.

The mines target different deposit types. Urucum hosts carbonate-hosted

manganese deposits in the Serra do Urucum range near Corumbá, while Azul

in Pará processes lateritic manganese ores developed from weathering of

underlying rocks in the Carajás region. Both deposit types have been

mined for decades, and the supporting infrastructure — railways to

Santos for export, power supply, workforce — is well-established.

Production has been relatively stable year-on-year, reflecting the

maturity of the operations and the steady demand environment from global

steel customers. Neither dramatic expansion nor sharp contraction has

characterised Brazilian manganese in recent years.

The Traditional Steel Market

Manganese is overwhelmingly a steel metal. Roughly 85-90 percent of

global manganese consumption goes into steelmaking, where it is used as

a deoxidiser, desulfuriser and alloying agent. Every tonne of crude

steel contains a small amount of manganese — typically around 0.5-1.0

percent by mass — and the aggregate global demand is therefore driven by

global steel production volume.

For Brazilian manganese producers, the dominant customer base has been

steel mills in China, Europe and the United States. Chinese steel demand

has been the single largest driver of Brazilian manganese export flow

for decades, though European and other Asian customers also take

significant tonnages. The commercial model is largely commodity-pricing:

manganese-ore prices track global steel-mill demand and marginal cost of

supply.

That commodity dynamic has kept Brazilian manganese in a relatively

stable competitive position. Brazilian operations are neither the

world's lowest-cost producers nor the highest-cost; they sit in the

middle range, competing on reliability, quality and logistics rather

than on absolute cost. In an established market that pattern works well,

and Brazilian producers have consistently generated acceptable returns

through the steel cycle.

HPMSM and the Battery Opportunity

The emerging opportunity is high-purity manganese sulfate — known in the

industry as HPMSM — used as a precursor in nickel-manganese-cobalt (NMC)

battery cathodes for lithium-ion cells. HPMSM demand has been growing

rapidly in parallel with EV production, and the required purity levels

(typically 99.9 percent or better) represent a substantial step above

traditional steel-grade manganese.

The commercial attractiveness of HPMSM is meaningful. Prices per tonne

for battery-grade manganese sulfate run at multiples of

electrolytic-manganese-metal prices, and the demand growth curve matches

the EV market's. Global HPMSM demand has been rising by 20-30 percent

annually through 2024-2025, and the trajectory is expected to continue

as cathode chemistry mix evolves.

Brazilian manganese producers have so far been slower than some

international peers to build HPMSM capacity. Chinese and Japanese

operators dominate the current market, and several Australian and

African projects are targeting battery-grade capacity for commissioning

during 2026-2028. For Brazilian producers to capture HPMSM value, they

would need to invest in dedicated purification and conversion facilities

— a capital commitment that has been discussed but not yet confirmed at

scale.

The Global Producer Map

South Africa is the largest global manganese producer, with output that

reflects the exceptional scale of the Kalahari Manganese Field. Gabon is

the second-largest producer, with operations concentrated at Moanda.

Australia, Ghana and Brazil complete the top five, with additional

tonnage coming from China, India and several smaller producers.

The geographic distribution shows less concentration than nickel or

cobalt. No single country dominates manganese supply in the way that

Indonesia dominates nickel or Congo dominates cobalt, which historically

has made manganese a less strategically contentious commodity. That

could change if HPMSM becomes a meaningful share of global manganese

demand, because the purification and conversion step is more

concentrated than the upstream mining step.

China currently dominates HPMSM production, with most of the world's

battery-grade supply coming from Chinese facilities. The same

diversification logic that has driven Western policy attention to

lithium, cobalt, graphite and rare earths would naturally extend to

HPMSM if the commodity becomes meaningfully important to battery supply

chains.

Brazilian Positioning

Brazilian manganese producers face a strategic choice. They can continue

as commodity-grade steel-feed suppliers, accepting relatively stable but

modest returns. Or they can invest in downstream capability — either

HPMSM production directly, or partnerships with international

battery-chemical converters — to capture the value associated with the

battery-grade market.

Vale's scale and balance sheet give it the capacity to pursue downstream

investment if management chooses. The company has explicitly positioned

Base Metals — copper, nickel and cobalt in particular — as

critical-minerals-strategic assets; adding manganese to that

conve