The US Department of Energy (DOE) has selected Australian manganese producers South32 (ASX:S32) and Element 25 (ASX:E25) to each receive a US$166 million ($243.75 million) grant.
South32’s Clark deposit, which is part of the Hermosa Project, located in Arizona, US, has been selected for an award negotiation.
The Clark deposit is currently the only advanced project in the US with a pathway to produce battery-grade manganese from locally sourced ore for the North American EV battery market.
As part of the DOE’s Battery Materials Processing and Battery Manufacturing Program, the grant will support the potential development of a commercial-scale manganese production facility.
On a cost-share basis and subject to final negotiation, the DOE will provide 30% of the cost of the manganese production facility, up to the grant award of US$166 million.
South32, which has a market capitalisation of $14.49 billion, is engaging with potential customers to advance product qualifications for battery manufacturing, including potential agreements for future supply following the signing of several non-binding memorandum of understandings.
CEO Graham Kerr says Hermosa represents a regional scale project with the potential to produce commodities critical to a low-carbon future across multiple deposits.
“Following final investment approval earlier in the year, construction of our large-scale, long-life Taylor zinc-lead-silver progressing as planned,” Kerr says.
“Our investment in Taylor will unlock value for future growth options, including Clark, by establishing significant shared infrastructure. In addition to Taylor and Clark, we are continuing further exploration programs at Peake to test the potential for a continuous copper system connecting Peake and Taylor.”
South 32 notes construction of a decline at Clark to enable bulk sampling through a demonstration plant and further underground exploration is underway. Decline access is scheduled for the end of next year.
The US Department of Defense is supporting this work through a US$20 million grant from the Defense Production Act Investment Program.
South32 is a diversified mining and metals company focused on developing natural resources. The company is focused on bauxite, alumina, aluminium, copper, zinc, lead, silver, nickel, and manganese in Australia, Southern Africa, and South America.
The Australian Financial Review reports that the Biden administration has also awarded US$166 million to manganese producer Element 25 to partially fund the development of a Louisiana plant that aims to refine the metal into a battery-grade product.
The grant will advance funding of a high-purity manganese sulphate monohydrate plant that the company plans to build near Baton Rouge, Louisiana. The manganese ore will be sourced from the Butcherbird Mine in Western Australia.
Separately, Element 25, which has a market capitalisation of $47.28 million, is seeking funding to expand its Butcherbird Mine to produce up to 1.1 million tonnes per year of manganese ore.
Element 25, which has been in a trading halt pending an announcement since September 20, is a manganese-focused developer and producer that wholly owns the Butcherbird Mine in Western Australia.
Battery-grade manganese is a high-purity crystalline cobalt sulphate with low-levels of impurities, primarily used for battery cathode materials in lithium-ion batteries.
As the EV market expands, so will the demand for the batteries needed. In 2023, EV sales in the US alone increased by 60% year over year, from 1 million in 2022 to 1.6 million.
Write to Aaliyah Rogan at Mining.com.au
Images: South32
