Ground Breakers: Element 25 back in action as it targets manganese battery market

Manganese miner Element 25 (ASX:E25) looks to have overcome early teething problems at the Butcherbird Manganese mine in the Pilbara as it shifts its focus to the emerging battery market.

The $225 million miner copped a big hit to its ramp up plans when a shaft failure forced it to bring forward planned maintenance and engineering improvements in November.

Those works have now been completed, with E25 finally hitting nameplate capacity and then some at the Butcherbird plant, six months after shipping its first cargo in July.

News E25 has hit record daily production of 1209t of manganese concentrate on January 3 stirred investors, sending the stock soaring by almost 25% this morning.

It has recorded average daily production of 934t since December 23 last year, against a target production rate of 1000t for its stage 1 plant.

“The record daily production of 1,209 tonnes achieved on 3 January is equivalent to annualised production of over 400,000t per annum which exceeds our 365,000tpa nameplate capability,” E25 MD Justin Brown said.

“Whilst it is premature to make firm forecasts on annual production volumes, it is highly encouraging to see this step-change in process plant performance after the implementation of the planned improvements.”

Sustainable nameplate production is expected in the March Quarter.

Element 25 share price today:

Stage 2 & 3

With the plant back operational, Element25 is back focusing on studies to expand into new markets.

Manganese is an essential ingredient in steel making, where it is used to harden steel and remove impurities from iron like oxygen and sulphur. That market accounts for more than 80% of end user demand.

But increasingly manganese producers are looking to find a niche in supplying high purity manganese to the EV market, where the metal is a major component in long range nickel-cobalt-manganese batteries.

E25 says it will target first an expansion of its concentrate plant before a state 3 development to convert the concentrate into high purity manganese sulphate for EVs.

The company claims advanced flowsheet development work in 2019 and 2020 confirmed a simple leach process which could target the world’s first “zero carbon manganese” for EV cathodes when combined with carbon offsets.

A scoping study initially due for release late last year is expected to be announced to the market in late January, with a feasibility study due by mid 2022.

Butcherbird contains 263Mt of ore at a composition of 10% manganese, 20.8% silicon, 11.4% iron and 5.9% aluminium.

Iron ore miners lead the pack

Iron ore flirted with US$125/t overnight as the big miners again led the ASX Materials sector.

BHP (ASX:BHP), Rio Tinto (ASX:RIO) and Fortescue Metals Group (ASX:FMG) were all up more than 1% in morning trade.

Dalian iron ore futures for May delivery were 2.9% higher at 11.50am AEDT.

However, gold miners were weak, keeping a lid on the Materials index.

Evolution Mining (ASX:EVN) was down 2.21% despite closing the $1 billion acquisition of the Ernest Henry copper-gold mine from Glencore after it paid an initial $800 million cash instalment from cash on hand.

The other $200m is due in 12 months.

The deal to take full control of the asset will deliver massive benefits to Evolution in the form of copper credits, which will reduce its group all in sustaining costs by 12%.

“Acquiring full ownership of Ernest Henry is transformational for Evolution and again demonstrates our track record of identifying and securing opportunities that are both accretive and improve the quality of the portfolio,” EVN boss Jake Klein said.

“Ernest Henry is a world class operation in a Tier 1 jurisdiction which we know well through our previous economic interest investment in 2016.”