South32 Could Speed Up U.S. Manganese Development, CEO Says -- Interview

South32 Could Speed Up U.S. Manganese Development, CEO Says -- Interview

South32 Ltd. could accelerate development of a battery-grade manganese project near Tucson, Arizona, as policymakers and auto manufacturers seek to shore up supplies of the critical mineral, the mining company's chief executive said on Thursday.

Australia-based South32 is due to complete a so-called prefeasibility study before the end of 2022 on its Clark deposit, at the Hermosa project it acquired in 2018, to identify the best way of potentially producing a manganese product for electric-vehicle batteries.

While South32 is yet to put a timeframe on developing Clark, the Biden Administration's decision to invoke the Defense Production Act, supporting critical material production, could materially speed up its plans, said Chief Executive Graham Kerr.

"You might actually find that Clark gets a shot in the arm and goes faster, just because the nature of the critical mineral in the U.S. and the hunger of many of the car manufacturers to get their hands on manganese to replace cobalt in batteries," Mr. Kerr told The Wall Street Journal.

An earlier scoping study at Clark found potential for an underground mine producing manganese, zinc and silver. Extracting and processing the commodities looks relatively simple, enabling a quick development, said Mr. Kerr.

"There's a lot of reasons why that could go incredibly fast," he said.

Manganese and zinc are listed as critical minerals by the U.S. Geological Survey. As well as being used in electric-vehicle batteries, manganese is used to strengthen steel. Zinc is mainly used to coat and protect steel from corrosion.

Mr. Kerr said there are some U.S. government grants potentially available to South32, although the miner hasn't yet submitted any official applications.

"We have started to actively engage with a number of different bodies in the U.S. government around what this could look like and certainly the reception we have had has been very positive," he said.

"Likewise, we've had a lot of interest from various carmakers about signing something which is more supportive for them to lock off volumes," added Mr. Kerr. But South32 won't line up grants or supply arrangements until at least the prefeasibility study is completed, he said.

"This lays the base work," said Mr. Kerr. "After that, you can say: How much faster can we go and what would that look like?"

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

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