Togo creates a state-owned manganese company

Saturday, 08 April 2023 13:42
Togo creates a state-owned manganese company

(Togo First) - On Wednesday, April 5, 2023, Togo announced the creation of Société Togolaise de Manganèse (STM), a state-owned manganese mining company. 

According to Togolese authorities, STM was created to ultimately "develop the mining value chain, boost job creation and improve the country’s economy by helping efficiently take advantage of mineral resources. 

Indeed, despite a mineral-rich subsoil, Togo’s mining industry was mostly focused on phosphates. However, things are gradually changing with the discovery of an important manganese reserve with a potential estimated at 8.5 million tons for about 15 years lifespan. 

Manganese is the fourth most used metal in the world. It is notably popular because of its ability to enhance the strength and ductility of steel. Its use for battery manufacturing is also growing because of its ability to notably stabilize cathodes in batteries used in electric vehicles and electronic devices. 

The global manganese market is expected to grow by more than 4.19% between 2022 and 2027. In addition, more than 40% of the steel produced globally is used in the construction sector, which is expected to grow by an estimated $12.9 trillion by 2030, primarily in countries such as India, China, and the United States. Togo intends to take advantage of these robust prospects. It has already taken some steps in that regard. 

On October 18, 2019, the Council of Ministers approved a decree granting its manganese exploitation rights to Société Générale des Mines ("SGM"), 85% owned by the British group Keras Resources. Under the initial agreement, SGM was to become a state company but, Keras never received the approval required to secure its mining license. 

The Togolese government decided to take further actions to achieve its great ambitions for its manganese, which it considers a strategic resource. The Mines Ministry launched a national geophysical survey to evaluate the subsoil and identify the available mineral resources to inform an efficient plan for the development of the national mining sector.

For the time being, there is no information on the results of the survey. The government also did not provide information on the shareholding of the newly-created manganese development corporation. Nevertheless, Keras Resources previously circulated a memorandum of understanding about the deal that was to see its subsidiary SGM secure manganese exploration rights.  In the memorandum, Keras revealed that the government demanded and received an additional 10% stake in SGM, bringing the British company’s share to 76.5% and increasing the government’s to about 24%

Doubling the mining sector’s contribution to GDP by 2025

Togo aims to double the contribution of its mining sector to GDP by 2025. In that context, it wants to exploit "its mineral resources in an "optimal" manner, starting with critical minerals like manganese, which is considered a transition metal because of its growing use in clean energy technologies - rechargeable batteries for electric vehicles and large-scale energy storage systems. 

As a reminder, the Nayega manganese deposit is located in the Kpendjal West prefecture in the Savanes region, in the northern part of Togo. It spans over 29,819 hectares and consists of four exploration permits, namely the Pana permit, the Tandjoare permit, the Naki-Est permit, and the Borgou permit. It is Togo's largest known manganese project. According to Keras Resources, which conducted the exploration and sampling stages, it is at an advanced stage. A "Silicomanganese smelter test work was completed in Santander, Spain during July 2019 [...]” and the installed production capacity is 6,500 tonnes per month, the AIM-listed company detailed. 

Fiacre E. Kakpo

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