South32 Ltd on Monday said the US Department of Energy has awarded its Hermosa project a grant of up to $166 million to produce battery-grade manganese for electric car production in the US.

The manganese is from the Clark deposit, which is part of the Hermosa project in the US state of Arizona. The Hermosa project also includes the Taylor zinc-lead-silver deposit and a regional exploration land package.

The Perth-based mining group said the grant will support the potential development of a commercial-scale manganese production facility.

On a cost-share basis and subject to final negotiation, the US government will provide 30% of the cost of the manganese production facility, up to the grant award of $166 million.

Hermosa’s Clark 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.

‘While subject to further study, construction of the facility and the development of Clark represents a significant opportunity to establish a North American supply chain of battery-grade manganese in a phased approach in line with market development,’ South32 said.

The miner said it is engaging potential customers to advance product qualifications for battery manufacturing, including potential agreements for future supply following the signing of multiple non-binding memorandums of understanding.

‘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,’ South32 Chief Executive Office Graham Kerr said.

Shares in South32 were up 0.4% to R 37.35 on Monday morning in Johannesburg. In London, they rose 0.2% to 161.00 pence.

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