Listed miner Element 25 says it has landed $2 million in standby equity that will help it pursue what could be Australia’s first “green metals” export project – a plan to use renewables to provide cheap energy to process manganese ore into metals that can compete with Chinese manufacturers.
Element25 has already completed a scoping study for the Butcherbird project in the Pilbara, which concluded that using at least 50 per cent renewables – wind and solar energy – would lower the cost of energy to a point where it makes financial sense to add value and make manganese metals rather than simply export the ore for processing in China.
Element25 is considering using up to 90 per cent renewables on the project – noting it is considerably cheaper than gas – further lowering cost and taking advantage of new CSIRO technology that has improved the efficiency of manganese metal refining.
The Butcherbird project is expected to produce high purity manganese sulphate for lithium ion battery cathodes, as well as the ore to produce electrolytic manganese metal for use in certain specialty steels.
The scoping study found that Chinese suppliers are struggling with rising electricity costs – it takes 6 megawatt hours of electricity to produce one tonne of manganese metal – and the lower cost of wind and solar in Australia presented a significant opportunity.
Element25 is just one of a number of mining companies looking to reduce costs through wind and solar. Leading iron ore companies Fortescue Metals and Rio Tinto are using solar and batteries to slash costs of their operations in the Pilbara, and BHP is cancelling contracts with coal fired power stations in Chile so it can turn to 100 per cent renewable energy supply to also reduce costs.
Oz Minerals is also looking at wind and solar to provide 80 per cent of its electricity needs for a proposed $1 billion nickel mine in outback Northern Territory near the WA border.
“This standby facility may be used to fund the development of the world class Butcherbird High Project and working capital,” Element 25 said in a statement on Wednesday.