South32 snaffles US$166M grant from US govt to develop manganese operation in Arizona

Mining company South32 Ltd (ASX:S32) has received a US$166 million grant from the US Department of Energy (DOE) for development of its Clark deposit, which is on-track to produce battery-grade manganese for the North American electric vehicle (EV) market.

Clark – which is part of South32’s wider Hermosa project in Arizona – is right now the most advanced of all projects of this kind in the country, progressing quickly towards production of this material from locally sourced ore.

In line with this, South32 aims to focus its efforts on development of a commercial-scale manganese production facility, with the DOE to provide 30 per cent of the cost of the manganese production facility – up to the grant award of US$166M – for this to happen.

This will be on a cost-share basis, and subject to final negotiation.

South32 is now speaking to potential customers to push ahead with product qualifications for battery manufacturing, with this including potential agreements for future supply following the signing of multiple non-binding Memorandums of Understanding.

It is also progressing underground exploration, plus the construction of a decline at the deposit, which will enable bulk sampling through a demonstration plant.

Executive Office Graham Kerr said the funding was a welcome recognition of the project’s value.

“We welcome this grant from the US Department of Energy, which recognises Clark’s potential to supply battery-grade manganese to the emerging North American market,” he said.

“Hermosa represents a regional scale project with the potential to produce commodities critical to a low-carbon future across multiple deposits for decades to come.

“Following final investment approval earlier in the year, construction of our large-scale, long-life Taylor zinc-lead-silver project is progressing as planned.

“Our investment in Taylor will unlock value for future growth options, including Clark, by establishing significant shared infrastructure.”

South32 shares moved slightly up on the news. At 12:06 AEST, they were trading at $3.23 – an increase of 0.78% since the market opened.