Element 25 Ltd (ASX:E25) and General Motors Co (NYSE:GM). have entered an agreement to secure a supply of high-purity manganese sulphate, which is set to enhance GM's annual North American EV production beyond one million units.
As part of the agreement, E25 will supply GM with up to 32,500 tonnes of manganese annually from its Butcherbird mine in Western Australia.
To facilitate this partnership, GM will provide E25 with an $85 million loan to support the construction of a new facility in Louisiana, USA, where manganese sulphate will be produced from the Butcherbird product.
This venture marks a significant milestone as it will be the first of its kind in the United States, contributing to the expansion of the country's domestic supply chain for EV battery materials.
Resilient and sustainable
Element 25 managing director Justin Brown said: "E25 aims to be a leading source of high-quality, vertically integrated, traceable and ESG-compliant battery material to the global electric vehicle industry, and GM's support does more than accelerate our strategy for HPMSM production in the United States.
"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."
New facility
The new facility is expected to span 230,000 square feet and require an investment of about $290 million.
Construction is set to begin in the third quarter of 2023, with the facility projected to begin operations in 2025.
Once fully operational, the facility is estimated to create around 200 permanent job opportunities, further boosting the local economy.
By investing in the construction of this facility and partnering with E25, GM aims to strengthen its domestic supply base for EV production, ensuring a reliable and efficient source of manganese sulphate for its expanding EV fleet.
GM's EV strategy
GM's collaboration with E25 aligns with its broader strategy to secure a robust supply chain for EV production.
GM executive vice president Doug Parks said: "GM is scaling EV production in North America well past 1 million units annually, and our direct investments in battery raw materials, processing and components for EVs are providing certainty of supply, favourable commercial terms and thousands of new jobs, especially in the US, Canada and with free trade agreement countries such as Australia.
"The facility E25 will build in Louisiana is significant because it's expected to be the first plant in the United States to produce battery-grade manganese sulphate, a key component of active cathode material which helps improve EV battery cell cost."
"With the rising demand for EVs, GM is committed to scaling its production capacity and promoting the adoption of electric mobility.
"By partnering with E25 to establish a domestic supply of battery-grade manganese sulphate, GM aims to support its ambitious goal of producing over 1 million EVs annually in North America.
"This collaboration represents a significant step forward in building a sustainable and efficient EV supply chain."
Shares up
Recognising the significance of this agreement, investors have sent E25 shares as much as 23.34% higher this morning to A$0.74.