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Aug 22, 2023

GM and Element 25 to Expand U.S. EV Supply Chain with Domestic Manganese Sulfate Production

News provided by 26 Jun, 2023, 08:00 ET Share this article DETROIT and PERTH, Australia, June 26, 2023 /PRNewswire/ -- General Motors Co. (NYSE: GM) and Element 25 Limited (ASX: E25) announced today

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26 Jun, 2023, 08:00 ET

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DETROIT and PERTH, Australia, June 26, 2023 /PRNewswire/ -- General Motors Co. (NYSE: GM) and Element 25 Limited (ASX: E25) announced today an agreement for Element 25 to supply up to 32,500 metric tons of manganese sulfate annually to support the annual production of more than 1 million GM EVs in North America.

Under the agreement, GM will provide Element 25 with a US$85 million loan to partially fund the construction of a new facility in the state of Louisiana for production of battery-grade manganese sulfate — a key component in lithium-ion battery cathodes — starting in 2025. Element 25 will produce manganese sulfate at the facility by processing manganese concentrate from its mining operations in Australia. It is expected to be the first facility of its kind in the United States.

"GM is scaling EV production in North America well past 1 million units annually and our direct investments in battery raw materials, processing and components for EVs are providing certainty of supply, favorable commercial terms and thousands of new jobs, especially in the U.S., Canada and free trade agreement countries like Australia," said Doug Parks, GM executive vice president, Global Product Development, Purchasing and Supply Chain. "The facility E25 will build in Louisiana is significant because it's expected be the first plant in the United States to produce battery-grade manganese sulfate, a key component of cathode active material which helps improve EV battery cell cost."

Element 25 Managing Director Justin Brown said: "E25 is working to be a leading source of high quality, vertically integrated, traceable and ESG-compliant battery material to the global electric vehicle industry and GM's support does more than accelerate our expansion in the United States. Together, we are creating a resilient and sustainable North American supply chain that will help introduce millions of customers to the performance and environmental benefits of EVs."

Element 25 expects to invest approximately US$290 million2 to build a 230,000-square-foot facility. Site preparation is planned to begin in the third quarter of 2023 and the plant is scheduled to open in 2025. The facility is projected to create around 200 permanent jobs when it is fully operational.

GM continues to strengthen its domestic supply base for EV production. In addition to manganese sulfate, GM has announced direct investments in lithium, nickel and other commodities, as well as cathode active material (CAM) and CAM precursor. GM and its joint venture partners are installing 160GWh of battery cell manufacturing capacity in the U.S., and its suppliers are onshoring production of permanent magnets and other EV components to North America. To date, these initiatives are creating thousands of jobs in states and provinces including California, Louisiana, Nevada, Texas, Ohio, Michigan, Tennessee, Ontario and Quebec.

Element 25 is an ASX listed company (ASX: E25) operating the world class 100%-owned Butcherbird Manganese Project in Western Australia (Butcherbird), shipping high quality manganese oxide concentrate to partners in traditional steel related industries. Element 25 has developed an innovative, proprietary, low-cost flowsheet to convert Butcherbird manganese concentrate into battery grade high purity manganese sulphate monohydrate (HPMSM) to supply the global EV industry. Manganese sulphate is a precursor for battery cathode active material and critical in Australia, Europe and the USA. Element 25 aims to become an industry leading, world class, low-carbon battery3 materials manufacturer underpinned by the large, long life manganese resource at Butcherbird. Company information, ASX announcements, investor presentations, corporate videos, and other investor material in the company's projects can be viewed at: www.element25.com.au.

General Motors (NYSE:GM) is a global company focused on advancing an all-electric future that is inclusive and accessible to all. At the heart of this strategy is the Ultium battery platform, which will power everything from mass-market to high-performance vehicles. General Motors, its subsidiaries and its joint venture entities sell vehicles under the Chevrolet, Buick, GMC, Cadillac, Baojun and Wuling brands. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety and security services, can be found at https://www.gm.com.

Cautionary Note on Forward-Looking Statements: This press release and related comments by management may include "forward-looking statements" within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements represent our current judgment about possible future events and are often identified by words such as "anticipate," "appears," "approximately," "believe," "continue," "could," "designed," "effect," "estimate," "evaluate," "expect," "forecast," "goal," "initiative," "intend," "may," "objective," "outlook," "plan," "potential," "priorities," "project," "pursue," "seek," "should," "target," "when," "will," "would," or the negative of any of those words or similar expressions. In making these statements, we rely upon assumptions and analysis based on our experience and perception of historical trends, current conditions, and expected future developments, as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any future events or financial results, and our actual results may differ materially due to a variety of factors, many of which are described in our most recent Annual Report on Form 10-K and our other filings with the U.S. Securities and Exchange Commission. We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events, or other factors that affect the subject of these statements, except where we are expressly required to do so by law.

Appendix A - Summary of Material Commercial Terms

The Agreement contemplates parallel commitments from the parties including:

The funds will be directed towards the construction costs of the Facility.

The agreements are subject to several conditions precedent (CPs) as expected for an agreement of this nature, including:

CPs for the overall transaction:

CP for first Loan drawdown:

Supply of HPMSM to GM is expected to commence in 2025:

1 Exchange rate of 1USD = 1.5058 AUD2 Reference: Element 25 ASX Release dated 12 April 20233 Reference: Element 25 ASX Release date 21 February 2023

SOURCE General Motors Co.