General Motors Boosts EV Production with New Supply Chain Deal.
June 26, 2023: In a move to strengthen its electric vehicle (EV) production and reduce costs, General Motors (GM) has finalized another supply chain agreement. On Monday, The company announced that it partnered with an Australian firm to secure manganese sulfate, a crucial raw material for EV battery manufacturing.
Under the deal, Element 25 will supply GM with the necessary amount of manganese sulfate to support the production of up to 1 million EVs annually in North America. To achieve this, Element 25 plans to construct its first manganese sulfate facility in the United States, using manganese sourced from Western Australia. This diversifies the supply chain by offering an alternative to China, where most of the world’s high-purity manganese sulfate is processed.
GM will provide Element 25 with an $85 million loan to aid in building the facility in Louisiana and will purchase approximately 32,500 metric tons of manganese sulfate each year. The U.S. plant will receive its supply from the Butcherbird mine in Western Australia. The facility, set to open in 2025, will process this mineral, which is critical in lithium-ion battery cathodes.
Sham Kunjur, executive director of EV critical materials for GM global purchasing and supply chain, emphasized the company’s commitment to on-shoring the EV supply chain for battery raw materials. The partnership with Element 25 signifies GM’s investment in establishing more facilities in North America.
This deal adds to Element 25’s growing list of buyers, with GM and Stellantis (parent company of Jeep and Chrysler) securing 65% of the company’s first production phase at a battery-grade manganese sulfate plant in Louisiana.
In October, GM also acquired ownership in Queensland Pacific Metals, an Australian firm that supplies nickel and cobalt for battery cells.
Doug Parks, GM’s executive vice president of global product development, purchasing, and supply chain, highlighted the company’s efforts in scaling up EV production. He stated that their direct investments in battery raw materials, processing, and components for EVs ensure a steady supply, favorable commercial terms, and the creation of thousands of new jobs. Parks further explained that the Louisiana facility to be built by Element 25 is particularly significant as it will be the first plant in the United States to produce battery-grade manganese sulfate, a crucial component in improving the cost-effectiveness of EV battery cells.
Element 25 is actively pursuing additional supply deals to secure the financing needed for the plant. Once completed, the 230,000-square-foot facility, estimated to cost $290 million, will commence site preparation in the third quarter of 2023.