KUCHING: Element 25 Limited has executed a binding long-term offtake agreement with OM Holdings Limited (OMH) for 100 per cent of manganese concentrate produced at Element 25’s Butcherbird mine in Western Australia Pibara region.
The agreement, which is subject to carve-outs to support plans for future feedstock for battery-grade high purity manganese sulphate (HPMSM) production, was sealed by Element 25’s wholly-owned subsidiary, Butcherbird Operations Pty Ltd and OMH’s wholly-owned unit, OM Materials (S) Pte Ltd, OM Materials (S) Pte Ltd. (OMM).
OMH, which is dual-listed on Australian Securities Exchange (ASX) and Bursa Malaysia, is a long established manganese alloy producer and operator of manganese facilities in Samalaju Industrial Park, Bintulu, Sarawak, providing a downstream industrial customer for Butcherbird production, according to Element 25 in a filing with ASX.
The agreement establishes a long-term sales channel for manganese concentrate from Butcherbird Expansion Project (BBX), which is targeting expanded 1.1 million tonnes per annum (Mtpa) of manganese concentrate production and represents a key milestone in advancing BBX towards development and financing.
Element 25 targets mechanical completion and commissioning of BBX in first quarter 2027.
“The agreement provides offtake certainty for an initial five-year term, with the option to extend for a further five years,” said Element 25.
The offtake contract is the latest agreement executed by Element 25 for BBX, following its recent announcement of long-term mining services and ore haulage services agreements with ReGroup Australia Pty Ltd.
The agreement will see OMM purchase up to 100 per cent of manganese concentrate production from Element 25’s Butcherbird project, capped at 1.1 million tonnes per annum, under take-orpay obligations.
OMM will also receive exclusive global marketing rights for conforming products, with limited exceptions.
Pricing will be linked to recognised manganese ore benchmarks, adjusted for quality and freight on a free-on-board basis, with periodic reviews.
The initial five-year term begins with the first shipment, with an option to extend for up to another five years, subject to performance, approvals and financing conditions.
Element 25’s managing director Justin Brown said the agreement secures a high-quality, long-term off-take partner for the company’s expanded Butcherbird operations, extending its existing relationship with OMH and its subsidiary, OMM.
“OMH has established downstream smelting capability, providing a strong commercial foundation for the Butcherbird Project over the initial five years of operation, and potentially beyond that timeframe.
“Securing a strong off-take partner also represents a major step forward in de-risking the development pathway for out Butcherbird expansion, giving lenders and investors the confidence needed to support project financing.
“The structure of our agreement delivers revenue certainty while still preserving marketing exposure, ensuring we participate in upside conditions without compromising stability.”
Added Brown: “Importantly, the agreement maintains our strategic flexibility, allowing Element 25 to continue advancing our valueadded downstream ambitions, including our HPMSM battery materials programme.”
