- Electric Metals (USA) Ltd is developing the North Star Manganese Project, anchored by the Emily deposit in Minnesota’s Cuyuna Iron Range – the highest-grade manganese deposit in North America – with the goal of becoming a vertically integrated battery chemicals and metals producer.
- The US currently imports 100% of its manganese ore, high-purity manganese sulfate monohydrate (HPMS), and electrolytic manganese metal (EMM), almost entirely from China, creating the strategic supply gap the company is positioning itself to fill.
- The company’s commercial strategy centres on downstream value creation – processing ore into HPMS (EV batteries), EMM (defense-grade steels), and electrolytic manganese dioxide (alkaline batteries) – rather than selling raw ore into commodity markets.
- A preliminary economic assessment (PEA) estimates mine development capex at approximately $150 million, with HPMS production costs of ~$825 per tonne (±50%), a figure management believes could be competitive with Chinese supply at standard tariff levels.
- A deeper process plant PEA incorporating a 10,000-tonne-per-year EMM circuit is expected by end of July or early August, representing the company’s next major de-risking milestone for investors.
Electric Metals (USA) Ltd (TSXV:EML) is a small-cap critical minerals company pursuing what its management describes as a fully integrated domestic manganese supply chain – from mine to finished battery chemical and defense metal. In a wide-ranging interview, CEO Brian Savage outlined the company’s resource base, processing strategy, cost targets, and the national security context underpinning the investment case. For investors, the story sits at the intersection of critical minerals policy, EV battery supply chains, and domestic manufacturing priorities – a combination attracting increasing attention from both institutional capital and government funding agencies. With a current market capitalisation of approximately C$40 million, the company is at an early but formative stage of development.
The Emily Deposit’s Premium Manganese Resource
The Emily deposit is located within Minnesota’s Cuyuna Iron Range, a historically active mining district. The site carries a well-documented pedigree: Pickands Mather and US Steel conducted initial exploration during the 1950s and 1960s, and US Steel produced a formal open-pit mine plan in 1959. The project was ultimately shelved – partly because state tax incentives redirected capital toward the nearby Mesabi Iron Range, and partly because the ore was richer in manganese than the iron that was then the primary commercial target.
Based on the company’s PEA, the mining operation is expected to deliver ore grading approximately 17.5% manganese. In broad compositional terms, the deposit is roughly one-third silica, one-third iron, and one-third manganese. Recent ore-sorting test work – involving XRF scanning of core samples correlated to assay results – has returned what management describes as strong results, with a formal news release expected shortly. The resource currently sits at the indicated and inferred category. Further drilling, estimated by management at approximately $10 million for the core deposit, is required to move material into proven and probable reserve categories needed to support a full feasibility study.
Evolving From Mining to Chemical Manufacturing
“We would want to be considered a manganese chemical and metals company,” Savage said, drawing a deliberate comparison to the cement industry. Just as cement producers own limestone quarries to secure their feedstock without making quarrying their commercial identity, Electric Metals views the Emily deposit as an input to a higher-value manufacturing process rather than the end product.
The company’s three target outputs are HPMS, which feeds into EV battery cathodes; EMM, used in specialty and defense-grade steels; and electrolytic manganese dioxide (EMD), which goes into conventional alkaline batteries. The processing strategy is built around a common front end – dissolving manganese in sulfuric acid – from which separate product streams can be directed toward each output. This modular chemistry approach provides operational flexibility. All three products have been produced at laboratory scale at Kemetco Research. The current phase of work focuses on optimising the flowsheet, expanding metallurgical sampling through further drilling, and progressing toward a pilot-scale demonstration plant – a prerequisite for engaging offtake customers in the battery supply chain.
Securing Domestic Supply Against Foreign Dependency
The strategic backdrop for Electric Metals is well defined.
“The United States produces zero manganese right now. 100% reliant on imported manganese. 100% reliant on HPMS from guess where? China.”
The same applies to EMM: there is only one operating EMM plant outside China globally, and the US imports approximately 50,000 tonnes of the material annually. The Defense Logistics Agency currently carries an open requisition for EMM for the US strategic stockpile that no domestic supplier can satisfy.
EMM is a critical input for the high-strength steels used in armour plate, munitions, naval vessels, and armoured vehicles. The inclusion of a 10,000-tonne-per-year EMM circuit in the forthcoming process plant PEA is a deliberate signal to government funding agencies. Battery chemistry trends further strengthen the demand outlook: both lithium manganese iron phosphate (LMFP) and lithium manganese rich (LMR) formulations – both gaining ground in the US market – increase manganese intensity per battery, reducing the sector’s dependence on cobalt and nickel.
Interview with Brian Savage, CEO, Electric Metals USA
Financial Requirements for Project Economics
The financial parameters from the existing PEA provide a working baseline. Mine development at Emily is estimated at approximately $150 million – modest by the standards of modern critical mineral projects. At 500,000 tonnes per year of ore production, the operation could supply feedstock for approximately 250,000 tonnes of annual HPMS output, representing around 30% of forecast US market demand. Even at full capacity alongside one other potential domestic producer, Savage notes that combined US supply would still only meet 50–60% of projected domestic demand – limiting the risk of oversupply-driven price pressure.
The production cost figure management emphasises most is $825 per tonne of HPMS, derived from the PEA at ±50% accuracy. At the upper bound of that range – approximately $1,200 per tonne – the company believes it can compete directly with Chinese producers.
“If we can produce HPMS for $1,200 or less per tonne, we’re competitive with China without any additional tariffs.”
Achieving that cost floor, rather than relying on premium pricing or trade policy, is the economic test the company has explicitly set for itself. The forthcoming process plant PEA – incorporating the EMM circuit for the first time – will provide a materially more detailed view of capital and operating costs.
Regulatory Permitting Backed by Political Allies
One of the more distinctive features of the Emily deposit from a permitting standpoint is its mineralogy. Unlike several high-profile Minnesota projects that face community opposition due to the presence of sulfide minerals – which can generate sulfuric acid in contact with water – Emily is an oxide deposit with no sulfides. This places the project on the ferrous side of Minnesota’s permitting framework, which has a long track record of straightforward approvals.
The company has also cultivated political relationships at multiple levels. Pete Stauber, the Republican congressman for the district in which Emily is located, chairs the House Subcommittee on Energy and Mineral Resources. Tom Emmer, the House Majority Whip, represents an adjacent Minnesota district and has also been kept informed of the project’s development. Management describes engagement with both sides of the aisle in the state legislature as an ongoing priority.
Navigating Technical Challenges Toward Production
Savage identifies HPMS production scale-up as the area of highest technical risk – not because the chemistry is unknown, but because moving from lab to pilot to commercial demonstration involves feed variability challenges and a multi-stage product qualification process with battery precursor manufacturers. Building a demonstration plant and generating consistent, specification-grade product samples will be the company’s key near-term operational objective.
On timing, management believes a three-year path to HPMS production is achievable with funding in place. The processing plant is being progressed in parallel with the mine, providing schedule optionality: if Emily permitting encounters delays, the plant can initially be fed with third-party ore sourced through established manganese trading relationships. Savage has cited existing relationships with trading houses including Glencore and Traxys as a practical foundation for that contingency. At its current stage, Electric Metals faces the typical challenges of a small company carrying a large programme – capital efficiency, technical execution, and de-risking the path to first production are the critical near-term tasks.
The Investment Thesis for Electric Metals USA
- The Emily deposit is the highest-grade manganese resource in North America at ~17.5% Mn, providing a low-cost domestic feedstock base for downstream processing.
- The US imports 100% of its manganese ore and HPMS from China, with zero domestic production – creating a structural demand pull that is both commercial and policy-driven.
- Downstream-focused business model captures value in HPMS, EMM, and EMD rather than raw ore, offering materially higher margin potential and a chemicals/metals company valuation multiple rather than a mining company multiple.
- Defense and national security demand adds a non-commercial revenue pillar: the Defense Logistics Agency has an unfilled EMM requisition, opening a path to government procurement and funding support.
- Mine development capex of ~$150 million is relatively modest versus comparable critical mineral projects, reducing funding risk and shortening the development timeline.
- HPMS production cost target of ~$825–$1,200 per tonne is potentially competitive with Chinese supply at standard tariff levels, limiting reliance on policy support for commercial viability.
- Iron by-product recovery is assigned zero value in the current PEA – any successful iron product development represents unpriced upside.
- Oxide mineralogy removes the sulfide permitting risk that affects several competing Minnesota projects, providing a cleaner regulatory pathway.
- Processing plant can be fed with third-party ore if the Emily mine timeline slips, preserving early revenue optionality and de-risking schedule dependency.
- Battery chemistry trends (LMFP and LMR) are increasing manganese intensity per battery, expanding the addressable market beyond traditional NMC applications.
- Near-term catalysts include: process plant PEA (late July/August), ore sorting news release, metallurgical test work results, and initial government engagement outcomes.
Macro Thematic Analysis
The global shift to electrification is reshaping demand for battery-grade critical minerals across every transportation category. Manganese has emerged as strategically important across multiple next-generation battery chemistries – including lithium manganese iron phosphate (LMFP) and lithium manganese rich (LMR) formulations – which are designed to reduce dependency on cobalt and nickel while increasing manganese intensity. The near-total concentration of HPMS production in China represents a supply chain vulnerability that US policy and manufacturers are increasingly motivated to resolve. Major EV battery investments from Toyota ($13 billion in North Carolina), Ford, GM, and Rivian underline durable downstream demand regardless of short-term EV adoption fluctuations. Battery chemistries are evolving, but manganese’s role is growing across all major formats. As Savage observed: “The electrification of everything – ship has sailed. It’s not coming back.” That structural demand driver, independent of any single chemistry or automaker, forms the long-term commercial foundation for domestic manganese production in the US.
TL;DR
Electric Metals USA is developing the highest-grade manganese deposit in North America, targeting downstream production of HPMS and EMM to supply EV battery manufacturers and the US defense sector – markets currently 100% dependent on Chinese imports. Mine development capex is estimated at ~$150 million, with HPMS production costs potentially competitive with China at standard tariff levels without premium pricing assumptions. A process plant PEA due in late July or August is the next key catalyst, adding an EMM circuit with direct national security relevance. At a ~$40 million market cap, the company offers early-stage exposure to a critical minerals gap with both commercial and policy-driven demand tailwinds.