Element 25 Ltd (ASX:E25) is trading higher on signing an offtake and project financing agreement with one of world's leading automakers Stellantis N.V. for the supply of battery-grade high-purity, manganese sulphate monohydrate (HPMSM) from its proposed US-based processing facility.
The agreement combines take or pay offtake commitments for 45,000 tonnes of HPMSM from the facility over five years.
What's more, Stellantis will part-fund the development of the facility with a US$30 million investment in two tranches.
The markets have welcomed the news with shares trading as high as A$1.115, up 16.15% from the previous close.
Globally significant long-term supplier
Element 25 managing director Justin Brown said: “Stellantis’ support for Element 25’s high purity battery-grade manganese sulphate project is a fantastic endorsement by one of the world’s largest automakers and supports our plans to become a globally significant long-term supplier of battery materials to meet growing global demand.
“We are fully aligned with Stellantis’ decarbonisation and electrification goals, which represent some of the most ambitious in the industry and E25 has a pathway to reach agreed net-zero carbon emission goals under this deal.
“This is an important step in the delivery of our first production module which will combine Element 25’s innovative processing flowsheet and the high quality, ethically sourced manganese concentrate from our 100%-owned Butcherbird Project in Western Australia to deliver sustainable, ethically sourced battery grade manganese to the electric vehicle industry.”
About Stellantis
Stellantis N.V. is one of the world’s leading automakers and a mobility provider formed on a cross-border merger between Fiat Chrysler Automobiles and the French PSA Group.
Under its wing are iconic automotive and mobility brands such as Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram, Vauxhall, Free2move and Leasys.
Updates from Butcherbird
Two weeks ago, the company outlined significant developments in the planned production of HPMSM from manganese oxide concentrates produced at its Butcherbird Project in Western Australia.
The highlight is the redirection of engineering resources to cover the proposed USA location, resulting in an adjusted feasibility study (FS) delivery in the March quarter of 2023 for the company’s first HPMSM production facility.
This change in the project FS schedule comes with potential benefits, as a facility constructed in the USA will be ideally positioned to directly service USA markets and potentially take advantage of favourable aspects of the inflation reduction act (IRA) and associated legislation with potential positive outcomes for the company.