Australian mining company Element 25 Ltd (ASX:E25) revealed Monday that they have been chosen to supply manganese sulfate to General Motors (NYSE:GM). Manganese sulfate is an important raw material needed to make batteries for electric vehicles.
According to a news release by GM, Element 25 will supply the Detroit automaker with enough manganese sulfate needed to scale electric vehicle capacity in North America to 1 million vehicles annually. To achieve this, the Australian company intends to construct its initial manganese sulfate facility in the United States. Additionally, they plan to process the manganese that is mined in Western Australia for this purpose.
The deal is the second by General Motors for Australian battery minerals following a move last October to take an equity stake in Queensland Pacific Metals to secure a new source of nickel and cobalt for battery cells.
Under the agreement, GM will provide Element 25 with an $85M loan to help fund the construction of the Louisiana facility. In return, GM will purchase up to 32,500 metric tons (around 7.2M pounds) of manganese sulfate annually. Element 25 will supply the U.S. plant with manganese from its Butcherbird mine in Western Australia. The plant processing this mineral is scheduled to open in 2025.
“Our agreement with Element 25 shows how dedicated we are to on-shoring the EV supply chain for battery raw materials as much as we can," Sham Kunjur, executive director of EV critical materials for GM global purchasing and supply chain, said in a statement. "We’re investing in new ways to get more of these facilities in North America.”
Shares of GM are up 0.68% in early trading on Monday.