Automaker General Motors (GM) has inked a deal with Element 25 to procure manganese sulphate, a crucial battery mineral, for its North American electric vehicle (EV) production. This move comes as part of GM’s strategy to secure a stable supply chain for its EV manufacturing. The announcement caused Element 25’s shares to surge by over 20%.
GM’s agreement with Element 25 marks its second endeavor to source Australian battery minerals, reflecting the global scramble among automakers to secure vital resources. Last October, the company revealed its plan to acquire an equity stake in Queensland Pacific Metals to secure nickel and cobalt supplies for battery cells.
See also: Stellantis and Element 25 Limited Partner for EV Battery Raw Materials Supply
Under the terms of the newly formed partnership, GM will purchase up to 32,500 tonnes of manganese sulphate annually from Element 25. The seven-year agreement will be serviced by a newly constructed facility in Louisiana, which will receive its supply from Element 25’s Butcherbird mine in Western Australia.
Although the financial details of the deal were not disclosed, the market responded positively to the news. Element 25’s stock soared by as much as 23% before stabilizing at A$0.69, registering a 15% increase.
To support the construction of the battery-grade manganese sulphate production facility, GM will extend an $85 million loan to Element 25. The ASX-listed mining company estimates a total investment of approximately $290 million for the facility’s establishment, with operations slated to commence in 2025.
GM’s current projections anticipate the production of 400,000 EVs in North America from 2022 to mid-2024. Furthermore, the automaker plans to bolster its capacity to manufacture 1 million units annually in North America by 2025.
This strategic collaboration between General Motors and Element 25 underscores the growing urgency among automakers to secure essential battery minerals, as the shift toward electric mobility gains momentum worldwide. With this latest move, GM is positioning itself to meet the increasing demand for electric vehicles and solidify its position in the evolving automotive industry.
