Amid a rebound in manganese prices, Element 25 Ltd (ASX:E25, OTCQX:ELMTF) is accelerating activities for the planned expansion of its Butcherbird Manganese Project in Western Australia as it approaches a final investment decision.
As outlined in its January 2024 feasibility study, the key areas of focus for expansion of the world-class manganese deposit include process optimisation, front-end engineering and design (FEED) activities, project finance and permitting.
The study highlighted a “compelling opportunity” to expand production at Butcherbird to take advantage of the large resource base and increase commercial returns.
This would involve increasing production to a nominal 1.1 million tonnes per annum of manganese concentrate at lower unit costs, with the study estimating a modest capital cost of $49.8 million.
Strong price gains
Element 25 managing director Justin Brown said, “The Butcherbird Project hosts a world-class manganese deposit with more than 260 million tonnes in resources, which will underpin the mine as a long-life producing asset.
“The decision to progress with the Stage 2 expansion project comes at a time when manganese ore prices are showing strong gains after a period of depressed pricing during 2023.
“The decline in prices came to a halt when the extent of the damage at South 32 Ltd Groote Eylandt Manganese Mine became clear with S32 recently forecasting a disruption in production until 2025.
“Prices in recent weeks have rebounded strongly with current pricing for 44% high-grade material quoted at U$6.93 per dry metric tonne unit (dmtu) cif Tianjin, approximately 60% higher than the quoted pricing in early April.”
Setting new standards
E25 is committed to building a state-of-the-art processing plant that sets new standards in performance, reliability, emission reduction, safety and operational efficiency.
By leveraging industry-leading expertise and lessons learned from the Butcherbird pilot plant, the company targets a high level of operational readiness and smooth project execution and commissioning.
The Stage 2 Butcherbird Expansion Project aims to harness lessons learned from the Stage 1 Pilot Plant to extract the maximum value from the process-proven resource at the Butcherbird Project, deploying cutting-edge technologies with a view to generating shareholder returns whilst demonstrating a core focus on safety, sustainability, indigenous engagement and operational excellence.
The expanded Butcherbird Mine has the potential to supply high-quality, low-carbon, sustainable manganese ore supply over many years to the company’s planned HPMSM refineries to provide a critical raw material for the electrification of the world energy systems as the world looks to reduce its dependency on fossil fuels and fight climate change.