Element25 subsidiary signs manganese offtake deal with OM Materials
ASX-listed Element25's Butcherbird Operations subsidiary has entered into a binding long-term offtake agreement with manganese alloy producer OM Materials for all of the manganese concentrate produced at the Butcherbird mine, in Western Australia, but capped at about 1.1-million tonnes a year.
OM Materials, which operates manganese smelting facilities in Malaysia, has been granted the exclusive global marketing rights for conforming product, with limited carve-outs for non-conforming material and Element 25’s own downstream processing requirements.
Pricing is based on a transparent index-linked framework, referencing internationally recognised manganese ore benchmarks and includes quality-based adjustments reflecting product specifications, with freight normalisation to free-on-board basis.
The offtake agreement, with take-or-pay obligations, is for an initial five-year term, but includes the option to extend the term by a further five years.
“This agreement secures a high-quality, long-term offtake partner for manganese concentrate produced at our expanded Butcherbird operations, extending our existing relationship with OM Holdings (OMH) and its subsidiary OM Materials. OMH has established downstream smelting capability, providing a strong commercial foundation for the Butcherbird project over the initial five years of operation and potentially beyond that timeframe.
"Securing a strong offtake partner also represents a major step forward in derisking the development pathway for our Butcherbird expansion, giving lenders and investors the confidence needed to support project financing," comments Element25 MD Justin Brown.
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