Butcherbird Ore Reserves Surge 107% to 101.4Mt at 10.4% Manganese Grade
Element 25 Limited has announced a 107% increase in Ore Reserves at its Butcherbird Manganese Project in Western Australia, now supporting an 18.3-year mine life at 1.1Mtpa production. This milestone underpins the company’s strategic expansion into battery-grade manganese supply for the EV market.
- Ore Reserves increased 107% to 101.4Mt at 10.4% manganese
- Life of Mine extended to 18.3 years at 1.1Mtpa production rate
- Expansion supported by updated Feasibility Study and granted mining leases
- Project to supply manganese concentrate globally and feed US battery materials refinery
- Robust environmental and regulatory approvals secured for expansion
Significant Reserve Upgrade at Butcherbird
Element 25 Limited (ASX: E25) has delivered a substantial boost to its flagship Butcherbird Manganese Project in Western Australia, announcing a 107% increase in Ore Reserves to 101.4 million tonnes at an average grade of 10.4% manganese. This upgrade effectively doubles the previously reported reserves and extends the mine life to over 18 years based on a planned annual production of 1.1 million tonnes of manganese concentrate.
The Ore Reserve estimate is anchored on two key deposits within the project area, Yanneri Ridge and Coodamudgi, which are part of a broader portfolio of eight manganese deposits spanning approximately 600 square kilometres in the southern Pilbara region. The deposits are strategically located near major infrastructure, including the Great Northern Highway and the Goldfields Gas Pipeline, facilitating efficient logistics and energy supply.
Feasibility and Operational Outlook
The reserve upgrade follows an updated Feasibility Study released concurrently, which confirms the technical and economic viability of the expanded mining operation. The study incorporates detailed mine designs, scheduling, and cost modelling, reflecting realistic mining productivity and contractor operation assumptions. The mining method remains conventional open-pit, with minimal need for drilling and blasting due to the nature of the lateritic manganese ore.
Processing infrastructure is set for expansion, building on a pilot plant that operated successfully for nearly three years until early 2024. The new facility is designed to produce 1.1Mtpa of manganese concentrate, employing proven crushing, screening, scrubbing, and dense media separation technologies to achieve a high-quality product with approximately 31.5% manganese content.
Strategic Positioning in the EV Battery Supply Chain
Element 25’s Butcherbird manganese concentrate will serve traditional manganese alloy markets and also supply feedstock for its planned high-purity manganese sulphate monohydrate (HPMSM) refinery in Louisiana, USA. This refinery, developed in partnership with automotive giants General Motors and Stellantis, aims to produce critical battery raw materials for the electric vehicle industry, positioning Element 25 as a key player in the low-carbon battery materials sector.
The company’s strategic vision includes a hub-and-spoke model, with Butcherbird ore feeding multiple HPMSM processing facilities across global markets, including a potential refinery site in Japan in collaboration with Nissan Chemical. This diversification enhances Element 25’s resilience against market fluctuations and aligns with growing demand for medium-grade manganese ores and battery-grade materials.
Environmental and Regulatory Confidence
Element 25 has secured all necessary environmental and mining approvals for the expansion, including a Mining Proposal and Clearing Permit from Western Australian authorities. Comprehensive baseline environmental studies have been conducted, with no material risks identified. The project benefits from established water supply infrastructure and robust community and Native Title agreements, ensuring social license to operate.
Infrastructure on site supports a rapid ramp-up, with existing access roads, power generation, water bore fields, and tailings storage facilities already in place. The company has prudently incorporated sustaining capital allowances for future infrastructure needs, including a proposed tunnel under the Great Northern Highway to optimize ore haulage.
Market Outlook and Financial Viability
The updated Ore Reserve and Feasibility Study assume a conservative manganese price of US$5.75 per dry metric tonne unit (dmtu) CIF China, with a long-term consensus price rising to US$6.06/dmtu from year nine onwards. Operating costs and capital expenditures have been rigorously estimated from first principles and vendor quotations, supporting a financially robust project model with an 8% discount rate.
Element 25 remains actively engaged with manganese traders and potential offtake partners, confident in the strong demand for medium-grade manganese ores, which have grown at over 10% annually in recent years. The company’s move into battery-grade manganese products further mitigates market risk and taps into the rapidly expanding electric vehicle supply chain.
Bottom Line?
Element 25’s reserve doubling at Butcherbird cements its role in the evolving manganese market, but execution of the expansion and market dynamics will be critical to watch.
Questions in the middle?
- How will Element 25 manage operational ramp-up risks during the processing plant expansion?
- What are the implications of manganese price volatility on the project’s long-term economics?
- How will Element 25’s HPMSM refinery partnerships influence its market positioning and revenue streams?
