Element 25 Ltd (ASX:E25, OTCQX:ELMTF) is working with Veolia North America to secure a site for a high-purity manganese sulphate monohydrate (HPMSM) refinery in Louisiana, USA.
The companies have signed a binding term sheet (TS) that will see E25 acquire approximately 35 acres of land in Burnside, Ascension Parish, adjacent to Veolia's existing sulphuric acid production site.
Access to essential resources
This site selection facilitates access to essential resources such as sulphuric acid, which Veolia will supply to E25 at predetermined rates for 20 years via a pipeline.
The agreement includes terms for securing natural gas, water and return water services parallel to the land purchase. Moreover, a temporary laydown area will be leased from Veolia during the construction phase of the refinery.
This step is part of E25's larger Louisiana HPMSM Project and marks significant progress as the company moves towards finalising the definitive agreements, securing project financing and reaching a final investment decision (FID) by August 30, 2024.
"Important step forward"
The next key milestone for the project will be obtaining the air permit, which is crucial for starting construction.
“E25 aims to be a leading source of high-quality, vertically-integrated, traceable and ESG and IRA-compliant battery material to the global electric vehicle industry,” Element 25 managing director Justin Brown said.
“Construction of our HPMSM facility in the USA – the first of its kind there – requires a project site with the necessary services and utilities and access to sulphuric acid as a key reagent, to allow the project to proceed.
"The Veolia site meets these requirements, and we are pleased to have signed this TS with Veolia as an important step forward in project execution.”
Definitive agreement details
The term sheet considers multiple simultaneous definitive agreements, with completion contingent on executing these contracts, securing project financing and E25's board making an FID by August 30, 2024, with potential for extension by mutual consent of the parties involved.
The definitive agreements to be executed no later than June 30, 2024, in the TS include:
- The Land Purchase Agreement.
- The Sulphuric Acid Supply Agreement.
- The Road Easement Agreement.
- The Utilities and Services Agreement and Temporary Lease Agreement.
“As part of our 'Green Up' strategy, we are pleased to contribute to the vehicle electrification value chain alongside Element 25,” Veolia North America CEO of Sustainable Energy Solutions Stu Thomas said.
“This operation will be complementary to our Burnside facility, bringing positive economic impact to Ascension Parish, and also have a long-term societal benefit to the energy transition.”
Building further synergies
E25's civil engineering operations for the HPMSM project are situated at the Veolia site, which offers numerous synergies enhancing the site’s long-term competitiveness.
According to the Sulphuric Acid Supply Agreement, Veolia will ensure a stable, long-term supply of sulphuric acid with agreed tariffs. E25’s application for an Air Permit is anticipated to be approved soon, with the Veolia site listed as the project location in the application, a key component in streamlining the approval process.
The execution of the TS plays a crucial role in merging these elements to maximise the project schedule. Securing the project site marks a significant achievement in E25's agreements with General Motors (NYSE:GM), which has committed $85 million in senior secured debt funding to the Louisiana Project. This investment runs concurrently with the commitment from E25’s other funding and offtake partner, Stellantis N.V.
Project financing and detailed engineering efforts are advancing as the HPMSM team pushes the project towards the FID and the start of project delivery.
The E25 process
E25 operates the Butcherbird Manganese Project in Western Australia, a 100%-owned venture producing medium-grade, high-silica manganese ore. The company aims to expand its production capacity to approximately 1.1 million tonnes per annum to serve traditional and emerging new energy markets.
In addition to its mining activities, E25 is venturing into the production of battery-grade HPMSM, a critical component for electric vehicle batteries.
The company has engineered a pioneering processing flowsheet to transform Butcherbird manganese concentrate into high-purity HPMSM. This proprietary technology significantly reduces energy use, nearly eradicates solid waste production and achieves the lowest carbon intensity for HPMSM production globally, according to publicly available data.
This innovative process not only advances Element 25’s operational efficiency but also supports the production of ethically sourced, traceable and transparent HPMSM supplies destined for the US market.
In line with this strategy, Element 25 is establishing a unique processing facility in Louisiana. This facility is designed to produce up to 135,000 tonnes per annum of HPMSM, specifically targeting the US electric vehicle (EV) supply chains.
E25 is supported by partnerships with major automotive manufacturers General Motors LLC and Stellantis N.V.
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