The NAIF chequebook with a chequered history whipped out again for a $50m loan to Element 25
The Northern Australia Infrastructure Facility has dusted itself off and found a new WA mining venture to invest in less than four months on from a collapse that could cost taxpayers more than $140 million.
NAIF has earmarked a low-interest loan of up to $50m for the expansion of Element 25’s Butcherbird manganese mine in the Pilbara.
E25 wants more manganese concentrate to feed into its planned high purity manganese sulphate monohydrate (HPMSM) processing facility in the US state of Louisiana.
The HPMSM facility secured a $US166m grant funding from the US Department of Energy in September.
Shares in E25 were up nearly 13 per cent on news of the NAIF funding.
“Securing this support from the Federal Government’s Northern Australia Infrastructure Facility reaffirms the Government’s commitment to developing Australia’s critical minerals sector and Butcherbird’s economic importance to Australia and the Pilbara region of WA,” E25 managing director Justin Brown said.
“Our feasibility studies have confirmed Butcherbird’s pedigree as a long-life manganese concentrate production hub from its 274 million tonne resource, which is integral to our plans for HPMSM in the US as well as potentially other locations around the world.
“This support from NAIF is critical to our plans to expand Butcherbird to meet this growing demand as the world continues to shift towards electrification and energy transition.”
Mr Brown said rechargeable batteries could use as much as 10 times more manganese if battery chemistry shifts towards lithium manganese rich chemistries. Car manufacturers have shown an interest in such chemistries.
NAIF’s investment in E25 comes less than four months after local mineral sands miner Strandline Resources fell into administration.
The shares of ASX-listed Strandline, which counts the Coburn heavy mineral sands project near Shark Bay as its key asset, were in suspension for more than a year before its collapse.
The West Australian revealed in January that the NAIF would likely take a haircut on its debts as Strandline’s single biggest financier.
Administrators are currently trying to sell the fallen business.
NAIF was originally set up to back infrastructure projects in remote regions across WA, Queensland and the Northern Territory, particularly in areas with high Aboriginal populations.
But a dearth of those types of projects led NAIF to broaden its scope to include more mining developments, which has caused some notable dramas.
Potash producer Kalium Lakes went bankrupt in August 2023 after NAIF had loaned more than $80m.
NAIF had also pledged to give $140m to Australia Potash, which like Kalium went under, but this loan did not proceed before the miner collapsed.
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