General Motors has signed an agreement with an Australian mining company, Element 25for the supply of manganese sulfate needed to push North American electric vehicle (EV) production past 1 million units annually.
ASX Element 25 shares jumped more than 20 per cent after the announcement of the partnership.
The deal involves an US$85 million (AU$127 million) loan from GM to help Element 25 build a manganese sulfate production facility in Louisiana.
Element 25’s contribution to the facility is approximately US$290 million (AU$433.6 million).
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Cadillac Lyric
Construction of the 21,368m² facility is expected to begin in the third quarter of 2023, and it will produce battery-grade manganese sulfate from 2025.
It is set to be the first facility of its kind in the US and will create around 200 jobs when fully operational.
Manganese sulfate is a key component in lithium-ion batteries, the most commonly used EV batteries.
The manganese concentrate required for production will be sourced from the Butcherbird Manganese Element 25 project in the Pilbara, Western Australia.
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GMC Sierra EV
Element 25 has developed a proprietary process to convert its manganese oxide concentrate to battery grade manganese sulfate monohydrate (HPMSM) for use in the EV industry.
“Element 25 strives to be the leading source of high-quality, vertically integrated, traceable and ESG-compliant battery materials to the global electric vehicle industry,” said the company’s managing director, Justin Brown.
Doug Parks, GM’s executive vice president of global product development, purchasing and supply chain, believes that this is an important partnership that will help reduce the cost of EV battery cells.
“Our direct investment in battery raw materials, processing and components for EVs provides certainty of supply, favorable commercial terms and thousands of new jobs, particularly in the US, Canada and free trade agreement countries such as Australia,” said Mr Parks.
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This is not the first time GM has looked to Australia for raw materials to strengthen its domestic supply chain.
In October last year, GM announced a US$69 million (AU$103 million) deal with Queensland Pacific Materials (QPM) to source nickel and cobalt used to build Ultium lithium-ion battery packs.
Also for its Ultium batteries, GM signed a deal with Switzerland-based Glencore to source cobalt from the Murrin Murrin operation in the Western Australian Goldfields region.
GM’s Ultium lithium-ion battery packs are used in various models produced in the US and China, including the Cadillac Lyriq and GMC Hummer EV and upcoming models such as the Buick Electra E4 and Electra E5.