Australia’s pyrometallurgical manganese industry came to an end with the closure of the Liberty Bell Bay smelter in July 2026. However, as the demand for manganese battery chemistries increases, so does the demand for high-purity manganese sulphate monohydrate (HPMSM), prompting some junior Australian miners to explore hydrometallurgical processing.
HPMSM is used to synthesise the cathode active material (CAM) for some of the most common lithium-ion battery chemistries, including nickel manganese cobalt, lithium manganese oxide and lithium nickel manganese oxide.
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Currently, around 90% of the world’s HPMSM is produced in China, despite Australia holding the second-largest manganese reserves globally after South Africa. Although Australian mines produce around 2.8 million tonnes annually, its processing industry is currently near-non-existent.
Now, several Australian juniors are trying to establish production, and there is appetite for new supply chains among global battery manufacturers. “The opportunity lies with buyers who specifically want non-Chinese supply, a group expected to grow as the market tightens in the 2030s,” says Ciara Rice, battery chemicals analyst at Benchmark.
However, significant challenges remain. Australia has no commercial-scale CAM production that uses HPMSM – making export costs an unavoidable overhead – and declining ore grades mean concentration expenses make cost-competitiveness harder to achieve.
“Australia is well-positioned to build out a broader manganese processing and refining sector,” says Prasanna Lakshmi, analyst at Mining Technology’s parent company, GlobalData. “However, establishing this domestic industry requires overcoming significant economic hurdles, particularly high operational and capital costs.”
Demand versus supply: the scale of the gap
According to the International Energy Agency, manganese demand from the battery sector will more than triple by 2030 under its Stated Policies Scenario. Under the Announced Pledges Scenario, battery-related manganese demand could account for almost a quarter of total manganese demand by 2050.
As a result, capacity expansions for battery-grade manganese sulphate are under way across the world. Analysis by GlobalData found that around 50 new brownfield and greenfield projects have been announced, predominantly within China, which is both the biggest producer and consumer of HPMSM.
“HPMSM is consumed by CAM producers, and most of them are in China, so Chinese producers sit right alongside their customers,” explains Rice. Those producers are led by Guangxi, in the south, where most manganese processing is concentrated. There, the HPMSM sector grew from an already-established manganese presence, particularly in electrolytic manganese metal production, which was built out from the mid-1980s and surged during the homebuilding boom in the 2000s.
HPMSM producers supply CAM producers, who supply battery manufacturers. Dominant in all three industries, the Chinese Government has supported the buildout of HPMSM production capacity.
Lakshmi notes that “China created a highly structured environment that protects domestic refiners from the financial risks faced by Western companies through state-baked financing, guaranteed domestic demand and regulations that control the export of advanced battery technologies, and push back against foreign tariffs.”
She points to export restrictions on Lithium Manganese Iron Phosphate technology, implemented in July 2025, which ensured advanced manufacturing techniques for manganese-rich next-generation cathodes remain within China.
However, China’s manganese resources are predominantly low-grade ore, requiring more intensive processing to reach battery-grade. Countries with higher-grade resources, including Gabon, South Africa, Brazil and Australia, therefore have a more favourable mineral endowment for HPMSM production.
Battery manufacturing is expected to become more geographically diverse. Although no country is expected to outstrip China, Rice says that, as HPMSM demand doubles over the next decade, “only around half of the additional demand at the cell stage comes from China, with North America growing fastest”.
The outlook for CAM differs. North America and Europe are planning new CAM plants, but even announced capacity falls short of demand. In Europe, 529,000t of annual CAM capacity has been announced by 2030, but T&E predicts that only around 177,000t will be built. In North America, around 450 kilotons per year of cathode and anode capacity was cancelled between the third quarter of 2024 and the same period in 2025, and CSIS expects significant midstream shortfalls, even if all announced capacity comes online by 2030.
“Until local CAM production catches up, most HPMSM will continue to be consumed in Asia,” says Rice.
Looking ahead, she says there will be a deficit. “HPMSM supply is tight today, and while new projects should bring relief later this decade, we expect the market to move into deficit from the mid-2030s.”
HPMSM growth in the future: where and who?
One of the biggest challenges to building out HPMSM is not the infrastructure or expense itself – although both challenges are significant – but the technological process behind production.
“HPMSM production typically involves concentrating manganese ore, leaching and purification, electrowinning (electrolysis) to produce pure metal, and dissolution and crystallisation of metal to derive HPMSM,” explains Lakshmi. She notes that there are few plants outside China with production expertise.
There are signals of an approaching shift, however. Western initiatives including the EU Critical Raw Materials Act and the US Inflation Reduction Act are supporting new supply chains, and have accelerated the commissioning of ex-China refining and midstream projects.
For example, Element 25 is currently expanding operations at its Butcherbird manganese project in Western Australia (WA), with completion and commissioning targeted for early 2027. It will provide feedstock for a new 135,000 tonnes per annum (tpa) HPMSM plant in Louisiana, which has been supported by a $166m grant from the US Department of Energy under the Battery Materials Processing Grant Program.
Also in the US, South32 is considering development of the Clark battery-grade manganese deposit at its Hermosa project in Arizona and producing 60,000tpa of HPMSM at a planned processing plant, with potential expansion in the future.
In Canada, the Canadian Manganese Company plans to develop a large manganese deposit and become a supplier of HPMSM for batteries, while Manganese X Energy plans to develop a manganese deposit and produce HPMSM directly from manganese ore.
“The next wave is expected over the coming decade,” explains Rice. “The US and Mexico are set to emerge as producers in the late 2020s, followed by Botswana around the turn of the decade and the Czech Republic in the early-to-mid 2030s. By the mid-2030s, North America should be the largest source of HPMSM outside China, with Europe and Africa also making meaningful contributions.”
Combining the planned global production capacity outside of China, she says that these additions could see ex-China capacity grow “several times over”, but notes that “secure funding, binding offtake agreements with CAM producers, the necessary permits, and reliable supply agreements for key inputs such as manganese ore and sulphuric acid all need to be firmly in place before a project can be considered on track”.
Can Australia capture more value from HPMSM?
Some junior companies, including Firebird Metals, Black Canyon and Accelerate Resources, are exploring HPMSM production, particularly in WA. According to Rice, the sector is “possible”, but “still at a very early stage, and the projects best placed to succeed will be those that control their own ore”.
Firebird Metals is one such example. The company is currently assembling and commissioning a flagship demonstration plant in Perth, which will convert manganese concentrate into HPMSM, precursor CAM and CAM in a single facility, using feedstock from its local Oakover project. The Australian Renewable Energy Agency backed the project with a $1.39m (A$2m) grant – a signal that the Australian Government is pursuing sector growth.
“By processing raw ore all the way to battery-grade CAM in a single line, projects like Firebird Metals’ demonstrate that Australia can move beyond simple mining and successfully capture the downstream value chain,” comments Lakshmi.
However, there are challenges to HPMSM production capacity buildout in Australia. These include ore grade – a particular headache for junior deposits, which are notably lower-grade than in Australia’s established mines. Lower-grade ore must be concentrated ahead of refinement, which Rice says “adds cost and partly offsets the advantage of integration”.
On cost, competition from China will remain a significant hurdle. Chinese producers have spare capacity, allowing them to increase output in response to prices, and making it difficult for new producers to compete. This issue is exacerbated by the lack of local customers for potential Australian producers, which would need to ensure binding offtake agreements are in place before construction, ideally with CAM producers building capacity outside China.
As a result, Rice forecasts: “Over the next decade, the HPMSM supply chain will become less concentrated in China, but where it ultimately settles will depend on where CAM is made. New producers are emerging across North America, Europe and Africa, yet […] until CAM production follows battery manufacturing westward, much of the material will still flow to Asia.”
Funding and permitting are also challenges. Downstream processing is capital-intensive and final investment decisions (FIDs) often take years from the start of advanced scoping or pre-feasibility work. For example, Advanced Energy Fuels’ Australian subsidiary recently commenced a stage three test-work programme with CSIRO (Australia’s national science agency), specifically to find a scalable purification pathway for HPMSM. Stage one began in November 2024, but the pre-feasibility study is not expected until mid-2027, with FID slated for some time afterwards.
Considering where Australia’s HPMSM potential lies, Rice says that “projects that are integrated, mining their own manganese ore and processing it themselves, have a clear advantage. They secure their feedstock, gain more control over its consistency and capture value across more of the supply chain.” Although the challenges are numerous, she concludes that “Australia’s ore endowment makes this model a natural fit”.
