Automaker Giant Stellantis Signs $30 Million Agreement With Australian Manganese Manufacturer

Stellantis logo on the company's headquarters in Poissy near Paris, on Feb. 20, 2022. Gonzalo Fuentes/Reuters

One of the world’s leading automakers, Stellantis, has announced a binding $30 million offtake agreement with the Western Australian manganese manufacturer, Element 25, on Jan. 9, 2023.

The agreement secures for the company 45 kilotons (around four Eiffel Towers) of battery grade, high purity, manganese sulphate monohydrate (HPMSM) from Element 25 to Stellantis over five years, for the production of its electric vehicle batteries, with shipments to commence in 2026 and includes options to extend the supply terms and volumes.

The manganese sulphate will be harvested from the Butcherbird mine, which is the largest onshore manganese resource in Australia.

The mine is located in the Pilbara—a large, dry and sparsely populated region in Western Australia— and is within low-risk mining jurisdiction. The mine also has access to excellent local infrastructure, with a gas pipeline and a main bitumen highway passing directly adjacent. However, the feasibility study of Butcherbird won’t be completed until the end of 2023’s first quarter.

Under the proposal, the purification and processing of the manganese are set to occur in the United States under a facility that has yet to be built but will be funded in part by the $30 million investment of Stellantis.

A pedestrian walks by a new electric vehicle charging station near San Francisco City Hall in this file photo. By 2017, more than 1.5 million plug-in electric vehicle charging stations will have been installed along American roadways. Justin Sullivan/Getty Images

US Purification and Processing Plant

The establishment of Element 25’s purification and processing plant in the U.S. assists the company in its plan to become the preferred supplier to U.S. automakers. The location also permits the U.S. partners of Element 25 to qualify for some enticing government subsidies, the Managing Director of Element 25, Justin Brown told the Australian Associated Press.

“There are a range of potential grant and subsidy programmes at federal, state and local level that may be available to assist the E25 HPMSM project,” said Brown, in an email to The Epoch Times.

Brown said that in addition to programmes that may be directly available, there are also provisions under the Inflation Reduction Act.

He said that this act provides incentives for original equipment manufacturers to establish supply chains that source the raw materials of their batteries from free-trade countries like Australia. Thus, he said that the act indirectly assists the E25 project.

CEO of Stellantis Carlos Tavares poses following the presentation of the Jeep Avenger 4Xe Concept on the first day of the 2022 Paris auto show on October 17, 2022. Eric PIERMONT / AFP via Getty Images

Manganese in Electric Vehicles

Although lithium is the main metal that is associated with EV battery supply chains, several others, such as cobalt, manganese and nickel, are necessary in the production of lithium-ion batteries. At the moment, cobalt has been the most commonly used in lithium-ion batteries. However, there is a push to move away from the metal.

Brown told the AAP that most of the world’s cobalt comes from the Democratic Republic of the Congo, and the mines in the DRC spark considerable environmental and social concerns.

Brown noted that the world is turning to manganese because it’s a considerably more abundant metal and it’s also much cheaper. Correspondingly, he said that people are looking to provide the bulk of the cathode-active materials, which will essentially permit the global transition to an electric vehicle future from manganese.

Stellantis Push for Safe and Clean Vehicles

In a company press release, Stellantis said that this agreement reinforces the company’s electrification strategy, which includes acquiring ample supplies of raw materials for the production of EV batteries.

“Our commitment to a carbon net zero future includes the creation of a smart supply chain to ensure we meet our customers’ desire for EVs,” said Carlos Tavares, Stellantis CEO, in the Stellantis release.

“Electric vehicles that deliver breakthrough customer experience in propulsion, connectivity and convenience are central to our Dare Forward 2030 plan that delivers safe, clean and affordable mobility.”

The Dare forward 2030 plan aims to clear the way for carbon neutrality by 2038 while achieving Stellantis’ goal to become number one in value creation for all stakeholders.

The plan has four major targets, two of which are specific to lowering carbon emissions, the first being to cut carbon emissions in half by 2030. The plan’s other environment-specific target is to reach 100 percent of passenger car battery electric vehicle sales in Europe and 50 percent of passenger car and light-duty truck battery electric vehicle sales in the U.S.

Stellantis also intends to invest over €30 billion (US $32 billion) in electrification and software development through 2025. The company intends to accomplish this while continuing to be 30 percent more efficient than the industry in regard to total capital expenditures and research and development.

An electric car charges at a mall parking lot in Corte Madera, Calif., on June 27, 2022. Justin Sullivan/Getty Images

Future of Element 25

Brown said that the support Stellantis has given Element 25’s high-purity battery-grade manganese sulphate project is a fantastic endorsement from one of the world’s largest automakers. He said that it validates Element 25’s plans to become a globally significant long-term supplier of battery materials to meet growing global demand.

“We are fully aligned with Stellantis’ decarbonization, and electrification goals, which represent some of the most ambitious in the industry and have committed to reach agreed net zero carbon emission goals under this deal,” he said.