ASX-listed battery materials manufacturing Element 25 [ASX:E25] has agreed to provide European car giant Stellantis with battery-grade manganese sulphate in an offtake deal.
The news sent the E25 share price hurtling well over 15% by early Monday afternoon. A share was worth $1.11 cents at the time of writing.
After a decrease of more than 30% throughout 2022, the first week of 2023 has started strong for Element, the minerals miner already having climbed 26% in its first week of the year.
Source: TradingView
Stellantis and Element 25 join forces
Battery materials manufacturer Element 25 will be providing Stellantis (maker of Fiat, Maserati, Alfa Romeo, Citroen, Chrysler, and Jeep) with battery-grade manganese sulphate in an offtake deal that will support Stellantis’s EV goals.
The target is to supply the carmaker with up to 10,000 tonnes a year of high-purity manganese sulphate (HPMSM) across a minimum five-year period, with opportunities to extend time and volume.
In return, Stellantis will partly fund developments of E25’s HPMSM processing facility in two tranches, an investment of US$30 million.
The offtake deal has been drawn up as a binding agreement, which is said to combine ‘take or pay’ offtake commitments for 45Kt of HPMSM from Element’s facility.
As is usually the way, the term sheet will depend on technical due diligence, as well as a feasibility study.
Element 25’s Managing Director, Justin Brown, commented:
‘Stellantis’ support for Element 25’s high purity battery-grade manganese sulphate project is a fantastic endorsement by one of the world’s largest automakers and supports our plans to become a globally significant long-term supplier of battery materials to meet growing global demand. We are fully aligned with Stellantis’ decarbonisation and electrification goals, which represent some of the most ambitious in the industry and E25 have a pathway to reach agreed net zero carbon emission goals under this deal.’
Outlook for E25
Element has been pursuing combined offtake/financing solutions with Original Equipment Manufacturers (OEM) and cathode manufacturers to provide substantial project funding.
The company was working towards finalising project offtake and financing strategies towards the end of 2022, with its pilot scale test program, flowsheet parameters, and engineering designs also concluding.
While E25’s flowsheet was created to provide for ‘future-proofing’ against tightening specifications on ever-evolving battery technologies, today’s news is the first tangible sign of offtake interest in the car manufacturing sphere.
‘This is an important step in the delivery of our first production module which will combine Element 25’s innovative processing flowsheet and the high quality, ethically sourced manganese concentrate from our 100%-owned Butcherbird Project in Western Australia to deliver sustainable, ethically sourced battery grade manganese to the electric vehicle industry’, said Mr Brown.
Is this the first glimpse into a new era for Element? We will have to see what transpires over the rest of 2023, as it is very early days.
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Regards,
Mahlia Stewart,
For Money Morning
