PERTH (miningweekly.com) – Manganese producer Element 25 has signed an offtake and project financing agreement with global mobility provider Stellantis.
Under the terms of the agreement, Element 25 will supply up to 10 000 t/y of battery grade high-purity manganese sulphate (HPMSM) to Stellantis for its electric vehicle battery requirements, for a period of five years, with the provision to extend the supply agreement and to increase volumes.
The agreement combines take or pay offtake commitments for 45 000 t of HPMSM from Element 25’s proposed US-based processing facility, which Stellantis will part fund with a $30-million investment in two tranches.
The first $15-million in funding will be provided by way of a share subscription agreement, at a price calculated on the volume weighted average price of Element 25 shares in the 20 days prior to the announcement of a feasibility study, or at A$1 a share, whichever is higher.
A further $15-million will be structured as a prepayment agreement which will be repaid out of HPMSM supplied under the offtake agreement to Stellantis over the five-year period, on commercial terms.
“Stellantis’ support for Element 25’s HPMSM 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,” said Element 25 MD Justin Brown.
“We are fully aligned with Stellantis’ decarbonisation and electrification goals, which represent some of the most ambitious in the industry and Element 25 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.”
The agreement with Stellantis is subject to a number of conditions, including the completion of a technical due diligence and Element 25 completing the feasibility study on the US-base HPMSM facility, and the Element 25 board taking a decision to proceed with the project based on the outcomes of this study.
The share subscription and offtake agreement is subject to Element 25 securing a minimum of $100-million in project financing by the end of April this year, while the prepayment agreement is subject to the ASX-listed company securing a minimum of $200-million in project financing by the end of June.
Element 25 is hoping to start HPMSM supply to Stellantis in 2026, with 5 000 t of HPMSM targeted in the first year of operations, increasing to 10 000 t/y in years two to five.
Edited by: Creamer Media Reporter
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