Element 25’s grant for US factory replacing China supply

By Peter Roberts

The emerging pattern of Australia digging up the critical minerals while others finance the construction of value adding processing in their own markets is repeating itself in battery material manganese, with Element 25 securing lucrative US government support.

Element 25, which is developing the Butcherbird manganese deposit in Western Australia’s Pilbara, has been selected to negotiate for a US$166 million grant from the U.S. Department of Energy (DoE) under the Battery Materials Processing Grant Programme.

This funding will support the construction of its proposed battery-grade high-purity manganese sulphate monohydrate (HPMSM) facility in Louisiana, USA, and is in addition to the US$115 million already committed by offtake partners General Motors LLC (GM) and Stellantis N.V. (Stellantis).

A second value adding plant is being planned for Japan, serving Japanese customers.

Element 25 is increasing production at Butcherbird to approximately 1.1Mtpa, and is also commercialising proprietary technology to produce battery-grade HPMSM for use in electric vehicle (EV) battery manufacturing.

The proprietary flowsheet reduces energy consumption, virtually eliminates waste and delivers the lowest reported carbon intensity HPMSM globally, according to the company.

Element 25 Managing Director Justin Brown said: “The grant will fund up to half of the construction capital costs for the project and when combined with existing commitments, will propel the project towards financial close and commencement of construction, creating long-term jobs for Louisiana and delivering ethically sourced, IRA compliant HPMSM to our customers.”

Element 25 also said: “…The State of Louisiana…has approved a substantial incentives package to support the Project in acknowledgement of its significant local benefits.”

The siting of value adding activities with their associated economic benefits in destination countries certainly makes sense for those nations determined to take control of their critical mineral supply chains.

The US facility would be the first outside China, reducing dependence on that source.

However, it perpetuates the picture of Australia involved in the least lucrative, extractive end of global value chains, waving off economic benefits to others.

It would be unrealistic to expect Australia to capture all economic benefits onshore, but then again, other countries ban or restrict export of undifferentiated commodities in ways that Australia simply does not.

For Element 25 the stars are lining up for its US grant application which was submitted under the DoE’s Battery Materials Processing Grant Programme of the Office of Manufacturing and Energy Supply Chains, which is funded by the Bipartisan Infrastructure Law.

The programme is designed to provide grants for battery materials processing to ensure that the United States has a viable battery materials processing industry.

“The grant forms a key element of E25’s financing strategy, and the execution team will now work to finalise the project schedule, subject to grant finalisation.”

Further reading:
Element 25 progresses battery precursor project
Element 25 plans second manganese plant in Japan

Picture: Element 25