Element 25 Ltd (ASX:E25) has drawn renewed interest from offtake and financing partners following the introduction of the Inflation Reduction Act (IRA) in the US this year, legislation which will inject billions into clean energy and electric vehicle (EV) incentives and programs.
A number of the provisions of the IRA directly impact EV supply chains including the high-purity manganese sulphate monohydrate (HPMSM) used in the manufacture of EV batteries.
Importantly for Element 25, Australia is qualified under a free trade agreement (FDA) to participate in IRA incentives and qualifying critical minerals include manganese, placing the company's Butcherbird Project and HPMSM technology in a strong position to leverage the US-based EV market supply chains in coming years.
E25 has engaged several potential offtake partners, including electric vehicle OEMs and established cathode and precursor material manufacturers.
The company says discussions have focused on combining offtake, pricing and finance outcomes to provide certainty around the project’s delivery and also supply and pricing stability for customers.
Feasibility study progress
Element 25’s feasibility study remains on schedule for completion in December this year. The company has received vendor pricing and lead time estimates for all major packages and preliminary capital cost estimates have been in line with expectations.
E25 has leveraged engagement with project engineers and third-party consultants to improve layout and equipment selections and optimise costs.
Each HPMSM production module is designed with a nameplate production capacity of 65,000 tonnes per annum of battery-grade HPMSM requiring about 75,000 tonnes per annum of Butcherbird manganese concentrate as the principal feedstock.
The company is finalising a pilot-scale test program in North America for a final confirmation of flowsheet parameters for engineering design – the proprietary process E25 is using has reliably generated battery-grade HPMSM with industry endorsements from potential offtake partners.
Overall, Element 25 believes its high product quality and reduced carbon footprint ‘future-proof’ the company against increasing purity requirements as battery technologies evolve.
Project location selection
Element 25 has narrowed down the possible locations for its facilities, adopting a 'Design one – build many' (DOBM) engineering philosophy to more efficiently built multiple sites and minimise localisation requirements.
The IRA has strengthened the case for a US-based facility, although Sarawak in Malaysia remains an attractive location and represents the base case for the current feasibility study.
Due to strong interest from potential US customers, the company is now running the US location in parallel with Malaysia, having selected Louisiana as a likely site for the US-based plant.
E25 has confirmed local support for the plant via engagement with the Louisiana Economic Development, Baton Rouge Area Chamber and local industry and offtake/finance partners.