Element 25 Ltd (ASX:E25) has had a strong start to operations at Butcherbird Manganese Project in 2022 with the Stage 1 production plant achieving a new daily production record of 1,209 tonnes on January 3, well above the target nameplate production of 1,000 tonnes.
This provides encouragement for the company following the completion of logwasher repairs and engineering modification works on schedule in late December 2021.
The processing plant is demonstrating significant performance improvements since re-commissioning of the plant as evidenced by the new daily record along with record average daily production of 934 tonnes since December 23.
Step-change in performance
E25 managing director Justin Brown said, “The record daily production of 1,209 tonnes achieved on January 3 is equivalent to annualised production of over 400,000 tonnes per annum which exceeds our 365,000 tonnes per annum nameplate capability.
"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.”
Investors have welcomed the project update with shares as much as 24.2% higher to A$1.49.
Engineering improvements
Works last month focused on the repair of the shaft failure as announced and updated on November 22 and December 13, 2021, respectively and the implementation of a range of engineering improvements that had been planned prior to the plant failure.
In parallel with these repairs, a range of modifications have been made to improve plant access for maintenance, manage material flow through the plant, reduce wear on key components, improve noise and dust control as well as adjusting the overall site layout to increase operational and maintenance scheduling flexibility and throughput.
Multi-stage development strategy
This comes as E25’s Operations team continues to focus on delivering sustained nameplate production while the Business Development team focuses on the company’s multi-stage development strategy.
The latter includes a Stage 2 expansion of the concentrate business followed by a Stage 3 development to convert the concentrate material into HPMSM (high purity battery-grade manganese sulphate) for electric vehicle EV batteries to power the global transition away from fossil fuel-powered mobility.
Important battery ingredient
Manganese is emerging as an increasingly important ingredient for EV batteries, with potential supply constraints for nickel and cobalt forcing battery manufacturers to look to high manganese cathodes to produce the vast amount of cathode material required by the EV industry in coming years.
The Butcherbird Project is ideally placed to feed this potential demand, with advanced flowsheet development work undertaken in 2019 and 2020 confirming a simple leach process for E25 ores which, when combined with offsets, will target the world’s first Zero-Carbon Manganese for EV cathode manufacture.
Butcherbird is a world-class manganese resource with current JORC resources of more than 263 million tonnes of manganese ore.
E25’s scoping study for the next development stages is nearing release with peer reviewing delayed due to the holiday season. This is anticipated to be released in late January 2022 and will be followed by the release of a feasibility study.
Shift to manganese cathodes
As battery electric vehicle (BEV) makers seek to increase the uptake of electric vehicles, one commercial driver is cost reduction.
VW's Power Day suggested a 50% cost reduction for batteries with cell design (-15%), production process (-10%), cathode/anode materials (-20%) and battery systems (-5%) driving the change.
Global BEV penetration is expected to rise to 15.2% by 2025 and 39.5% in 2030 – led by Europe and China, according to Morgan Stanley (NYSE:MS)’s latest report.
The main driver in the cathode materials is a shift to a high manganese cathode material for the volume production, which is expected to underpin strong demand growth for battery-grade manganese sulphate.
Current estimates put demand by 2030 at 13 times current supply and a deficit of 1.3 million tonnes even factoring in planned supply increases.