Firebird Metals Ltd (ASX:FRB, OTC:FRBMF) welcomes a positive Battery-Grade Manganese Sulphate Feasibility Study for the proposed stage one of production in China that demonstrates the opportunity for the company to become a low-cost producer of high-purity manganese sulphate.
The study, which incorporated conservative cost estimates and the lowest selling sulphate price compared with peers, shows that there are significant cost, development and operational advantages to be gained by building a plant and establishing operations in China.
It was based on the premise of building a plant in China utilising third-party manganese ore to produce high-purity manganese sulphate at a time when the Lithium Manganese Iron Phosphate (LMFP) battery market is forecast to experience significant growth in coming years.
Low capex and opex
Key results include projected capex of US$83.5 million and projected working capital of US$10.6 million.
The Chinese circular industry and proposed plant location within the Jinshi High-Tech Industrial Park provide localised key reagents and inputs that drive a low opex of approximately US$609 per tonne for the production of battery-grade manganese sulphate.
This study outlines annual plant capacity for battery-grade manganese sulphate (MnSO4) of 50,000 tonnes and high-purity manganese tetraoxide (Mn3O4) of 10,000 tonnes which equates to equivalent MnSO4 of 72,500 tonnes.
“Another key milestone”
Firebird managing director Peter Allen said: “We are extremely pleased to deliver another key milestone in our pursuit of becoming a low-cost, near-term high-purity manganese producer.
“The rapid progress made from a development and in-country standpoint since announcing our China-based strategy in September 2023 is a testament to the hard work of our team and places the company in a very exciting position moving forward.
“The results from our Battery-Grade Manganese Sulphate Feasibility Study for stage one of production highlight the compelling opportunity we have in front of us to become a key high-purity manganese producer and validate our decision to work towards building a battery-grade manganese sulphate plant and establish operations in China.”
China LMFP strategy
Completion of the feasibility study follows the announcement by Firebird in September 2023 of its China-based LMFP growth strategy, aimed at establishing the company as a low-cost producer of battery-grade MnSO4 and Mn3O4. Both products are key cathode materials in LMFP batteries for electric vehicles.
LMFP is considered a key future cathode for electric vehicle (EV) batteries and is a significant upgrade from the Lithium Iron Phosphate (LFP) cathode, which is currently the most popular EV battery cathode.
Adding high-purity manganese sulphate (MnSO4) to LFP, creates LMFP, delivering significant operational and safety benefits to a battery, including:
- a higher thermal runaway temperature than nickel-based batteries;
- costs approximately 30% lower than nickel-based batteries; and
- enhanced voltage platform and 15-20% increase in energy density.
In November 2023, Firebird announced that it had established a wholly-owned subsidiary Hunan Firebird Battery Technology Co Ltd (HFBT) to own and operate the project.
About the study
The Chinese chemical project design and engineering process differs from western processes. A feasibility study is completed first and forms the basis of engineering design, government permitting and financing activities. The study contains a large portion of compliance and project economics assessment.
Hunan Chemical Engineering Design Institute Co., Ltd (HCEDI) completed the feasibility study in line with stringent Chinese regulations. HCDEI has completed several similar studies for the Chinese manganese sulphate industry.
Results from this China-based study validate Firebird’s LMFP battery strategy to produce battery-grade manganese sulphate in China.
These results have continued to build upon the solid platform for Firebird to successfully deliver on its vision to become a global leader in the manganese industry, combining mining and downstream processing with a dedication to the advancement of the Li-ion battery sector.
“Incredible level of support”
“We have already seen significant cost, development and operational advantages that can be gained by building a plant in China and, most importantly, the company has been buoyed by the incredible level of support and interest received from key government agencies and tier-one banks in assisting us establish operations in China,” Allen said.
“With their support, Firebird is well-positioned to deliver on key remaining development and financing milestones to meet our objective of commencing operations in China in Q4 CY2025.
“This support also extends to ongoing discussions regarding third-party manganese offtake for stage one, which will expedite our production capabilities and pave the way for a cash flow positive business.
“What excites the team the most is we are executing our strategy at the right time. LMFP batteries are forecast for the largest growth of all the manganese-based batteries, due to the fact it meets the key criteria of car manufacturers which is cost competitiveness, safety and good range.
“We believe we are seeing a new era of Li-ion batteries with the commercialisation of LMFP and we are well-positioned to benefit greatly from this rising demand.”
Pre-development work
Pre-development work is continuing for the proposed plant in China with strong progress and support from the Jinshi Government and tier-one banks for development and construction.
Firebird is also in advanced discussions with Chinese banks regarding attractive financing options and expects to provide an update in the coming weeks.
Positive formal advice has been received from the Jinshi Government and relevant departments regarding the process to repatriate profits generated from operations while European customer site visits and offtake discussions are underway with initial positive feedback.
The company is working closely with HCEDI on preliminary plant design which is 50% complete. At the same time, equipment supplier engagement and due diligence of supplier manufacturing processes and supplier customer experiences are vital in the development and operational process in China.
Through this process, the company has identified that further efficiencies can be achieved and has applied for two patents on energy saving (calcining process & product drying), which will further improve the impressive economics of the project.
Other progress on the Chinese strategy includes:
- Third-party manganese ore offtake discussions for the study progressing well.
- Permitting and design completion expected by late Q3 2024.
- Final Investment Decision expected in H2 2024, with a 12-15 month construction timeframe.
Oakover a critical pillar
The ongoing development of Firebird’s flagship Oakover Project in Western Australia remains a critical pillar of the company’s manganese battery materials strategy.
Since listing in 2021, Firebird has delivered significant and rapid progress at Oakover, with key development and environment studies progressing as planned.
It is intended that once Oakover is in production, ore from the project will be used to feed the Battery Grade Manganese Sulphate plant in China.