Key highlights

• Element 25 is reworking the commercial arrangements behind its planned high-purity manganese sulphate monohydrate refinery in Louisiana.

• The company said it is finalising revised offtake documents, as detailed in an update lodged on 30 October.

• The policy angle and the Australian base are both covered as part of the reset.

Element 25 (ASX:E25) is reworking the commercial arrangements behind its planned high-purity manganese sulphate monohydrate (HPMSM) refinery in Louisiana. In an update lodged with the ASX on 30 October, the company said it is finalising revised offtake documents with Stellantis and revised grant paperwork with the US Department of Energy (DOE), while its Supply agreement with General Motors has been terminated by mutual agreement.

Managing director Justin Brown explained the reason directly: the project is being progressed in a substantially different market, policy and funding environment from that which existed when the original agreements were signed in 2023.

What has changed

Element 25 reported revised terms for its US$166 million (A$235 million) grant under the DOE's Battery Materials Processing Grant Program. The changes update scope, budget-period tasks and milestones, and the company describes them as mainly administrative and scheduling matters.

Stellantis and Element 25 have agreed in principle to revise offtake and prepayment arrangements for the refinery. Definitive amendment documents remain subject to completion and execution, so the revised terms are not yet binding.

Element 25 and GM have mutually terminated the supply agreement, Credit agreement and related letter agreements signed in June 2023. The termination includes reciprocal releases, ends GM's term loan commitments and releases related security interests. The parties remain in discussions about future HPMSM supply opportunities.

Why it matters

Losing a customer and its Loan Commitment is significant for a pre-development project. Offtake agreements and associated financing often underpin project debt. Element 25 says the revised structure provides greater flexibility on financing, with project debt, strategic Investment and project-level participation under assessment.

That flexibility may be valuable, but it also means the financing plan is less settled than it was. The release of GM's security interests does simplify the company's Balance Sheet obligations.

The policy angle

Element 25 has made an initial submission under the Defense Industrial Base Consortium's August 2026 request for project proposals on domestic critical minerals processing, which names manganese alongside indium, magnesium and titanium. The company noted there is no assurance of an award.

The shift reflects broader changes in the US, where electric vehicle Demand assumptions have moved and policy support has increasingly been framed around defence and supply security. The company cited International Energy Agency data showing 108 gigawatts of battery storage added globally in 2025, 40% more than in 2024, pointing to energy storage as another demand source.

The Australian base

Element 25's flagship asset is the Butcherbird Manganese Project in Western Australia's Pilbara. On 28 October, the company told the ASX that the Butcherbird expansion had entered its main construction phase. That operation provides the company's core Mining exposure, while Louisiana represents a Downstream processing opportunity.

Weighing the reset

Resetting agreements can be a sensible response to a changed market, preserving a project rather than forcing it forward on outdated terms. Yet it delays certainty for investors, and the final terms with Stellantis and the DOE are not yet known.

What to watch

Key items include execution of the Stellantis amendments, finalisation of the DOE grant changes, financing decisions and the outcome of the defence consortium submission.

What HPMSM is used for

High-purity manganese sulphate is a key input into many Lithium-Ion Battery cathodes, including nickel-manganese-cobalt chemistries and newer manganese-rich formulations. Most refining capacity is in China, which is why the US government supported a domestic refinery. If battery makers shift towards chemistries that use more manganese, demand for HPMSM could grow. However, the pace of electric vehicle adoption has varied, and automakers have adjusted their supply plans, which helps explain why Element 25's original agreements needed revision. The new approach may take longer to finance but could better match current market demand.