Australian manganese producer Element 25 has signed a second offtake agreement for its Butcherbird Manganese project, Kallanish reports.

The deal sees Singapore-based private equity firm and commodity trader Semeru Energy acquire between 175,000 and 200,000 tonnes per year of manganese ore produced by the project. This represents approximately 50% of the project’s annual manganese output and is due to run over a period of five years, with an option to extend.

The agreement, announced on 9 December, contains an exclusivity period until 30 June, 2021, which also covers shareholder and regulatory approval requirements.

As part of transaction, Semeru will provide $5 million in project finance to fund Element 25’s expansion plans as outlined in its updated pre-feasibility study, published in early December. The funding supplied by Semeru, which had previously invested $1m in Element 25’s capital raising activities, will facilitate the ramp-up of the second stage of the project’s development.

The Butcherbird project, located in the Pilbara region of Western Australia, is 100% owned by Element 25 and holds Joint Ore Reserves Committee (JORC) resources in excess of 263m t of manganese ore. The company has previously agreed another offtake deal with OM Materials, also based in Singapore, accounting for approximately 365,000 t/y of the project’s output.

Element 25 plans to also integrate renewable energy into the power solution of the project to minimise carbon intensity, as well as reducing energy costs, which it states will put Butcherbird at the forefront of sustainable metal production.