Australian manganese project examines expansion to 1.1Mt/y
Australian manganese developer Element 25 has unveiled plans for a larger mining project in southern Australia, targeting 1.1-million tonnes a year of manganese lump concentrate from Butcherbird.
The expansion, the company said this week, would establish Butcherbird as a low-cost manganese operator with C1 costs estimated a $2.86/dry metric ton (dmt) unit.
The study builds on additional resource delineation conducted in June last year and an updated mineral resource estimate completed in October, which increased measured and indicated resources at the Yanneri and Coodamudgi deposits.
The 18.3-year project life will use 87% of measured resources and 77% of indicated resources within the Butcherbird resource base. Remaining measured and indicated resources are tied up in infrastructure reserves around the Great Northern Highway and Goldfields Gas Pipeline, as well as deeper mineralisation not included in the current optimisation.
Construction costs stand at A$64.8-million for the expanded Butcherbird project. With forecast cash flows of A$70.5-million a year, the project will have a payback period of about 16 months from the start of operations.
Using a consensus manganese price of $6.06/dmt unit on a 44% cost, insurance, and freight China basis, the project delivers a pre-tax net present value (NPV), at an 8% discount rate, of $561.7-million, with a post-tax NPV of A$379.7-million and an internal rate of return of 96%.
The Butcherbird project achieves a break-even point at a manganese invoiced price of $3.19/dmt unit on a free-on-board Port Hedland basis over the project’s lifespan.
E25 pointed out that the concentrate production strategy complemented its plan to develop a high-purity manganese sulphate plant in Louisiana, US, to supply General Motors and Stellantis for electric vehicle battery cathodes.
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