Element 25 Ltd (ASX:E25) has taken another step on the path to producing high-purity manganese sulphate monohydrate (HPMSM) at a planned US facility with global automaker Stellantis N.V. completing its first US$15 million investment in the company.
The company will use proceeds from the Stellantis first tranche investment towards its development of a battery-grade HPMSM facility in the USA with a second US$15 million payment forming part of a binding agreement.
Second by large automaker
This investment is the second by a large automaker in the manganese producer, which also has an agreement to supply General Motors’ USA Ultium Battery Plants with HPMSM, which includes a US$85 million loan facility.
READ: Element 25 and GM join forces to expand US EV supply chain with domestic manganese sulphate production
It takes total project commitments to US$115 million from two leading global electric vehicle manufacturers.
Stellantis investment
Stellantis’ first investment tranche has been completed after the conditions precedent were satisfied with E25 issuing 22,569,967 shares to Stellantis at A$1.00 per share for total proceeds of A$22,569,967.
It follows E25’s announcement on January 9, 2023, of the signing of a binding agreement with Stellantis to supply battery-grade HPMSM from E25’s proposed US-based facility.
READ: Element 25 higher on key manganese offtake and project financing deal with global automaker Stellantis
This agreement combines take-or-pay offtake commitments for 45,000 tonnes of HPMSM from the facility over five years with US$30 million in two tranches of project funding.
Use of funds
E25 intends to use the first tranche proceeds for planned engineering and construction activities to advance the proposed facility it plans to build in Louisiana, USA.
The further funding of US$15 million is structured as a pre-payment agreement to be repaid out of HPMSM supplied to Stellantis, which is behind such brands as Chrysler, Maseratti, Citroen, Fiat, RAM, Opel and Dodge, among others.