PERTH (miningweekly.com) – Manganese miner Element 25 has signed a definitive agreement with automotive major General Motors (GM) to supply up to 32 500 t/y of battery-grade high-purity manganese sulfate (HPMSM) to support GM’s electric vehicle (EV) production in North America.

Under the agreement, GM will provide Element 25 with a $85-million loan to partially fund the construction of an HPMSM facility in Louisiana, which will produce manganese sulfate by processing manganese concentrate from Element 25’s mining operations in Western Australia.

Element 25 expects to invest approximately $290-million to build the facility. Site preparation is planned to begin in the third quarter of 2023, and the plant is scheduled to open in 2025. The facility is projected to create approximately 200 permanent jobs when it is fully operational.

A previously completed feasibility study estimated that the one-train project would produce 65 000 t/y HPMSM, which could be scaled to 130 000 t/y with the development of a second train.

The project is estimated to have a pre-tax net present value of $1.66-billion and an internal rate of return of 29%, with yearly cashflows expected to reach some $155-million. Operating costs have been estimated at $1 188/t, with the feasibility study estimating annual average steady state earnings before interest, taxes, depreciation and amortisation of $178-million at full production

“Element 25 aims to be a leading source of high-quality, vertically integrated, traceable and ESG-compliant battery material to the global EV industry and GM’s support does more than accelerate our strategy for HPMSM production in the US,” said MD Justin Brown.

“Together, we are creating a resilient and sustainable North American supply chain that will help introduce millions of customers to the performance and environmental benefits of EVs.”

GM executive VP for global product development, purchasing and supply chain Doug Parks said that the company was scaling EV production in North America well past one-million units annually, and its direct investment in battery raw materials, processing and components for EVs was providing certainty of supply, favourable commercial terms and thousands of new jobs, particularly in the US, Canada, and with free-trade agreement countries such as Australia.

“The facility Element 25 will build in Louisiana is significant because it’s expected to be the first plant in the US to produce battery-grade manganese sulfate, a key component of cathode active material which helps improve EV battery cell costs,” he added.