South32 secures R2.9bn for US manganese project

Diversified mining and metals group South32 has been awarded a $166m (about R2.9bn) grant from the US department of energy to develop a commercial-scale manganese production facility at its Hermosa project in Arizona. 

Under the terms of the grant, the department will cover 30% of the cost of developing the facility, up to a limit of $166m, the company which is listed in London, Johannesburg and Australia, said in a statement. 

The investment, together with a $20m grant from the US department of defence earlier this year, aims to unlock Hermosa’s battery-grade manganese deposits, which have the potential to supply the growing electric vehicles market in the US. 

Hermosa’s deposit is the only advanced project in the US with a “clear pathway to produce battery-grade manganese from locally sourced ore for the North American electric vehicle battery market”, South32 said .

South32 has already started a commercial-scale manganese facility at Hermosa, with the construction of a decline to enable bulk sampling through a demonstration plant and further underground exploration under way. 

Construction of the facility and development of Hermosa’s manganese deposits could allow the group to capture more of the growing US market and “establish a North American supply chain of battery-grade manganese in a phased approach in line with market development”, it said. 

South32 CEO Graham Kerr said the grant recognised the potential of Hermosa’s manganese deposits to “supply battery-grade manganese to the emerging North American market”. 

“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,” Kerr said. 

websterj@businesslive.co.za