General Motors closes another supply chain deal to ramp up EV production, cut costs

General Motors just completed another supply chain deal, this time with an Australian company for manganese sulfate, an important raw material needed to make batteries for electric vehicles, the company announced Monday.

Element 25 will supply the Detroit automaker with enough manganese sulfate needed to scale electric vehicle capacity in North America to 1 million vehicles annually, GM said in a news release. The Australian company plans to build its first manganese sulfate facility in the U.S., and process manganese mined in western Australia.

This provides an alternative to China, where most of the world’s high purity manganese sulfate is processed.

Under the agreement, GM will provide Element 25 with an $85 million loan to help fund construction of the Louisiana facility and buy up to 32,500 metric tons, or nearly 7.2 million pounds, of manganese sulfate annually, GM said. The U.S. plant will be supplied from its western Australian Butcherbird mine. The plant processing this mineral, a key component in lithium-ion battery cathodes, is scheduled to open in 2025.

“Our agreement with Element 25 shows how dedicated we are to on-shoring the EV supply chain for battery raw materials as much as we can,” Sham Kunjur, executive director of EV critical materials for GM global purchasing and supply chain, said in a statement to the Detroit Free Press. “We’re investing in new ways to get more of these facilities in North America.”

With the GM deal, as well as an arrangement in January with Jeep- and Chrysler-parent Stellantis, Element 25 now has buyers for 65% of its first phase of production at a $290 million battery grade manganese sulfate plant being built in Louisiana, Reuters reported early Monday.

In October, GM bought ownership in the Australian company Queensland Pacific Metals to secure a supply of nickel and cobalt for battery cells.

“GM is scaling EV production … and our direct investments in battery raw materials, processing and components for EVs are providing certainty of supply, favorable commercial terms and thousands of new jobs,” Doug Parks, GM executive vice president of global product development, purchasing and supply chain, said in the GM news release. “The facility E25 will build in Louisiana is significant because it’s expected be the first plant in the United States to produce battery-grade manganese sulfate, a key component of cathode active material which helps improve EV battery cell cost.”