Australian manganese developer Element 25 has announced plans to expand its Butcherbird manganese project in southern Australia, aiming to produce 1.1 million tonnes of manganese lump concentrate annually.
This expansion will position Butcherbird as a low-cost manganese producer, with C1 costs estimated at $2.86 per dry metric tonne (dmt) unit.
The study supporting the expansion builds on additional resource delineation completed in June 2023 and an updated mineral resource estimate from October 2023, which significantly increased the measured and indicated resources at the Yanneri and Coodamudgi deposits.
The project has an expected lifespan of 18.3 years, utilizing 87% of measured resources and 77% of indicated resources from the Butcherbird resource base.
The remaining measured and indicated resources are tied to infrastructure reserves along the Great Northern Highway and Goldfields Gas Pipeline, as well as deeper mineralization excluded from the current optimization plan.
Construction costs for the expanded project are estimated at A$64.8 million. With forecast annual cash flows of A$70.5 million, the project is expected to achieve payback within 16 months of operations commencing.
Based on a consensus manganese price of $6.06/dmt unit on a 44% cost, insurance, and freight (CIF) China basis, the project offers a pre-tax net present value (NPV) of $561.7 million at an 8% discount rate.
Post-tax, the NPV stands at A$379.7 million, with an impressive internal rate of return of 96%. The project’s break-even manganese price is $3.19/dmt unit on a free-on-board (FOB) Port Hedland basis.
Element 25 highlighted that this production strategy aligns with its broader vision to establish a high-purity manganese sulfate plant in Louisiana, US.
The planned facility will supply key automotive partners, including General Motors and Stellantis, with manganese for electric vehicle battery cathodes.
