Jupiter scoping study shows strong case for North America-based plant

13th March 2024 By: Darren Parker - Creamer Media Contributing Editor Online

Jupiter scoping study shows strong case for North America-based plant

Jupiter MD Brad Rogers

ASX-listed Jupiter's newly released scoping study evaluating the opportunity to supply high-purity manganese sulphate monohydrate (HPMSM) to the electric vehicle (EV) battery market has yielded promising results, confirming that laboratory-scale production might be successful, with the potential for optimisation and scaling up. 

For the HPMSM project, Jupiter is considering a plant in North America with a proposed capacity of between 80 000 t/y and 120 000 t/y, balancing operational as well as demand and supply risk and production efficiency.

The scoping study outlines an initial capacity of 50 000 t/y for the first three years, increasing to 100 000 t/y from 2030. 

Jupiter said on March 13 that financial projections were strongly supportive of advancing further study work for the project, with base case assumptions arriving at an unlevered post-tax base case internal rate of return of 25% and a peak earnings before interest, taxes, depreciation and amortisation of $179-million a year at full-scale production. 

The capital cost for the 100 000 t/y plant is estimated at $430-million, in line with other advanced projects in the sector. 

The company also expects the project to incur additional sustaining capital costs of about $3-million a year. 

“We believe Jupiter can leverage its competitive advantages, including access to a suitable, substantial, long-life and secure source of ore from [the Tshipi manganese mine, in South Africa], to add significant value to our stakeholders through the execution of this strategy. 

“While there is more work to do, we are very encouraged by the opportunity and returns outlined in this study, as well as our work so far, including discussions with numerous potential customers and partners,” Jupiter MD Brad Rogers said.

The decision to study the feasibility of establishing an HPMSM production facility was taken owing to certain competitive advantages that Jupiter believes can be leveraged to create a dedicated pure-play manganese mining company with significant existing mining operations. 

As such, the company believes it is favourably positioned as a credible and low-risk counterparty for major offtake partners in the HPMSM project.

Jupiter said the synergies that emanate from its existing investment in the Tshipi mine, in the Northern Cape, will add additional value. 

Jupiter holds a 49.9% interest in Tshipi é Ntle Manganese Mining, which owns the Tshipi mine, in the Kalahari Manganese Field, which is estimated to hold about 80% of the world’s known economic manganese resources.

Jupiter has immediate access to about two-million tonnes of readily available stockpiled manganese ore with an in situ grade of more than 30% at Tshipi. Within the mine, the lower-grade manganese resource has also been declared as measured. 

The company said this resource had the potential to continue to be extracted for more than 100 years as a by-product of the existing mining operation at a substantially reduced cost and without any further processing necessary. 

As such, Jupiter said no new or dedicated mine would be required, with meaningful additional value being derived from the sale of this mineral resource. The ore cost contribution to HPMSM, as estimated by scoping study contributor Benchmark Mineral Intelligence, ranges from 12% to 25% depending on mineral deposit type and HPMSM process methodology. 

On a like-for-like basis, Jupiter could, therefore, realise a meaningful operating cost advantage within this range once operational. Jupiter’s aim is to be the most cost efficient non-Chinese supplier of HPMSM. 

It believes it can achieve this because it is unlevered and generates a robust yearly cash flow. Additionally, it is not dependent on external funding for the study phases of the project.

Moreover, Jupiter expects to leverage its existing infrastructure, skills and manganese industry experience. 

Jupiter has large long-standing investors, namely AMCI and Posco, with strong financial and industry experience both with downstream processing across the battery mineral value chain. 

Optimal plant location options in the US and Canada have been identified as part of the base case for the HPMSM project, ensuring strategic positioning within the North American market, which is in line with the strong US federal governmental focus on the EV sector. 

As the EV battery industry developed, Jupiter said, alternative locations may be considered if deemed more attractive from a business case perspective. 

Following these findings, the next steps include a prefeasibility study starting this month. This phase, estimated to cost up to $2.9-million and to last 12 months, will be funded as part of general overhead costs by Jupiter.