The deal, which expands GM’s supply chain for its electric vehicles, is for up to 32,500 tonnes of manganese sulphate a year.

GM and Element 25 this week said the agreement includes an $US85 million ($A126.6m) loan from GM to help Element 25 fund construction of a $US290 million ($A432m) facility in Louisiana to produce battery-grade manganese sulphate. 

Production is expected to begin in 2025 and Element 25 will source manganese concentrate mined in Australia for the Louisiana operation.

GM’s EV Raw Materials’ Center of Excellence executive director Sham Kunjur said in an interview with leading trade paper Automotive News (AN) that “GM is scaling EV production in North America well past one-million units annually.”

“Our direct investments in battery raw materials, processing and components for EVs are providing certainty of supply, favourable commercial terms and thousands of new jobs, especially in the US, Canada and free trade agreement countries like Australia.”

GM’s executive vice president of global product development, purchasing and supply chain, Doug Parks, said in a statement that Element 25’s facility in Louisiana was significant “because it’s expected (to) be the first plant in the US to produce battery-grade manganese sulphate, a key component of cathode-active material, which helps improve EV battery cell cost.”

The Louisiana site is expected to be 21,400 square metres with work to prepare the site slated to start in the third quarter.

Element 25 managing director Justin Brown said GM’s support “does more than accelerate our expansion in the US.”

“Together, we are creating a resilient and sustainable North American supply chain that will help introduce millions of customers to the performance and environmental benefits of EVs,” he said.

GM has said it has reached deals with suppliers to secure all of the necessary battery materials to produce its planned one-million EVs in North America a year from 2025. 

The car-maker is working to line up the battery raw materials it will need for EV production from 2026 to 2032. The Element 25 agreement covers that time frame.

Mr Kunjur said that GM has been working for a few years to increase its sourcing of battery raw materials outside of China, drawing on lessons learned during the semiconductor shortage about having a diverse supply chain.

The US federal government’s Inflation Reduction Act (IRA) has made that work more critical, he said. 

The IRA provides a tax credit of up to $US7500 ($A11,200) for the purchase of EVs. But it also carries a requirement about sourcing and processing of raw minerals from the US or from countries in which the US has a free-trade agreement – such as Australia.

Mr Kunjur told AN that in the manufacture of motors and batteries, manganese is not used as much as nickel or lithium.

“But we think there are alternative chemistries that are being developed that will become more manganese-dependent,” he said.

“So this is not only to secure what we have in our portfolio today, but also to future-proof it for tomorrow’s chemistries.”

GM has invested in and signed agreements with other companies in the battery supply chain, including securing raw materials for EV batteries, processing, cell production and recycling.

These include Brazilian miner Vale that will supply nickel from its Canadian mines.

In addition to reducing reliance on China, GM wants to cut the cost of its Ultium battery cells to less than $US70 ($A104) per kilowatt-hour by the middle of the decade or later.

GM is also looking at the use of less expensive lithium iron phosphate (LFP) cells – used by car-makers including Tesla’s Chinese-built models – to help reduce costs.

The company said it will invest more than $US3 billion ($A4.47b) to build its fourth battery plant in northern Indiana. The plant, GM’s first with joint venture partner Samsung SDI, is expected to start production in 2026.

By Neil Dowling