Australian supplier Element 25 Ltd has announced today a significant deal to supply manganese sulphate to General Motors, as the American automaker seeks to secure a stable supply of battery minerals for its electric vehicles in North America.
Remarkably, this partnership has caused Element 25’s shares to surge by over 20%, highlighting the growing demand for battery minerals in the automotive industry.
Agreement details
Under the agreement, General Motors will purchase up to 32,500 tonnes of manganese sulphate annually from Element 25 over a seven-year period starting in 2025.
For context, manganese sulphate is a critical mineral in li-ion battery cathodes.
Element 25 will source the manganese sulphate from its Butcherbird mine in Western Australia to the new Louisiana facility.
In return, GM will provide Element 25 with an $85 million loan to partially support the construction of the new Louisiana facility.
“GM is scaling EV production in North America well past 1 million units annually and our direct investments in battery raw materials, processing and components for EVs are providing certainty of supply, favorable commercial terms and thousands of new jobs, especially in the U.S., Canada and with free trade agreement countries such as Australia.
The facility E25 will build in Louisiana is significant because it’s expected be the first plant in the United States to produce battery-grade manganese sulfate, a key component of cathode active material which helps improve EV battery cell cost.”
Doug Parks, GM executive VP, Global Product Development, Purchasing, and Supply Chain
Element 25’s shares rallied by 23% and settled at A$0.67, representing a 12% increase.
“E25 aims to be a leading source of high quality, vertically integrated, traceable and ESG-compliant battery material to the global electric vehicle industry and GM’s support does more than accelerate our strategy for HPMSM production in the United States. Together, we are creating a resilient and sustainable North American supply chain that will help introduce millions of customers to the performance and environmental benefits of EVs.”
Element 25 Managing Director Justin Brown
Partnership benefits
How can the partnership benefit GM?
This major partnership will secure a stable supply of manganese sulphate for General Motors’ EV batteries.
In effect, it will aid General Motors in achieving its ambitious target of producing 400,000 EVs from 2022 through mid-2024 in North America. Notably, that target raises to 1 million units per year in 2025.
It is also worth noting that this supply agreement marks General Motors’ second venture into Australian battery minerals. It came after the automaker’s equity stake in Queensland Pacific Metals in October 2022 for nickel and cobalt supply.
How can the partnership benefit Element 25?
Element 25 has already secured customers for 65% of its first production phase at the new battery-grade manganese sulphate plant in Louisiana thanks to the GM deal and a previous agreement with automaker Stellantis in early January.
Notably, the plant now has a total investment of $290 million, with plans to begin operations in 2025.
It is also worth noting that Element 25 is currently in discussions with other potential customers. It expects to finalize a third supply deal by the end of the year, which will provide further financial support for the plant’s construction.
Element 25 Managing Director Justin Brown stated that the company’s high-purity processing technology offers an alternative to China, which currently dominates high-purity manganese processing. As the battery industry in Australia develops, Element 25 plans to establish processing plants near its customers and within Australia itself.
See Also:
- GM, Samsung SDI finally decided on the location of its $3 billion US battery plant
- GM and LG received a $2.5B loan to develop three battery plants in the United States
- GM to change from pouch to round battery cells
- GM and Microvast partner to develop specialized EV battery separator
- GM secures CAD 300 million fund for its new EV battery parts factory in Canada
This collaboration between Element 25 and General Motors highlights the increasing importance of securing a reliable supply of battery minerals in the rapidly expanding EV market.
As automakers strive to meet the growing demand for electric vehicles, partnerships with mineral suppliers like Element 25 become vital to ensure a sustainable and uninterrupted supply chain for EV production.
