Element 25 Ltd (ASX:E25) managing director Justin Brown presented today at the Renewables and Resources Conference in Perth, discussing the progression of the company’s 100%-owned Butcherbird High Purity Manganese Project.
A pre-feasibility study (PFS) for the project is nearing competition and the company is on a clear path towards development and the production of high purity manganese products.
Element is confident the project has all the ingredients for success - it's in a tier-1 mining jurisdiction in Western Australia with established infrastructure; has simple geology at surface which permits low-cost, free dig mining; and there is a low-cost, clean processing pathway that can match demand.
Low-cost processing
The proposed processing is clean and efficient, using less energy and lower emissions to produce high purity manganese sulphate monohydrate for nickel-manganese-cobalt lithium-ion battery cathodes.
Previous metallurgical test work of a 40-tonne bulk sample successfully yielded a high purity electrolytic manganese metal (EMM) product grading 99.9% manganese, which exceeds the required 99.7% purity required for commercial production.
The company also proposes to use renewable energy to reduce energy costs during production as electrowinning metals is an energy-intensive process.
Making metal through electrolysis involves passing a current between a cathode and anode through a pregnant liquor and under the right conditions, metal is plated on the cathode.
Producing EMM takes about 6-megawatt hours per tonne of metal produced and the electricity required to power the cell house is the largest cost of production at Butcherbird.
Energy mix options
The PFS level analysis of the recommended power solution for the project is completed and is expected to comprise a hybrid wind/gas power station contracted over a 20-year power purchase agreement term with a total life of mine power cost of approximately $94/megawatt-hour.
This is a significant improvement on the scoping study power cost estimates of around $120/ megawatt-hour using a gas-only base case.
E25 is also collecting real-time wind and solar data in conjunction with Murdoch University to explore the potential for a more dynamic operational regime.
This has the potential to allow for higher renewable energy penetration than the current base case, which is expected to utilise around 50% renewable energy in tandem with gas-fired generation using traditional reciprocating engines.
The data collection exercise is expected to continue indefinitely to support power purchase negotiations as the company progresses toward contracting of the power infrastructure.
The upside case scenario would be using 90% renewables for the project.
Next steps
After site visits with potential off-takers in November, E25 concluded that the appetite for non-Chinese supply in Korea, Japan, the US and EU is strong for consumers of EMM.
With the PFS nearing completion, the company is confident that key project challenges are well understood and is keen to begin pilot testing.
Project financing options are also being determined with the Northern Australia Infrastructure Facility (NAIF) investigating the potential to provide debt financing for the Butcherbird Project.
Along with this route, the company is exploring traditional debt/equity, offtake pre-pay/royalty streaming, export credit agency debt financing and project level equity investment options.