E25 Approved For US$57M of Louisiana Tax Incentives

Element 25 Limited (E25 or Company) (ASX: E25; OTCQX: ELMTF) is pleased to announce it has achieved all milestones for the Louisiana State Industrial Tax Exempt Program (ITEP) incentive package to support E25’s planned lithium-ion battery grade high purity manganese sulphate (HPMSM) processing facility in Ascension Parish, Louisiana (Facility or Project). Governor Jon Bel Edwards has now approved the incentive agreement between E25, the Louisiana Department of Economic Development, and the Louisiana Board of Commerce and Industry.

This represents a significant milestone for the Project and concludes several months of active stakeholder engagement with multiple levels of state and local government and local community members to explain the benefits that will flow from the proposed Facility. The total benefits available to the Project from State Incentives have been estimated by EY at US$57M¹.

Louisiana Governor John Bel Edwards said: “Louisiana’s long standing status as a national pacesetter in foreign direct investment is no accident. It is the result of sustained relationship building. Companies such as Element 25 see the strategic advantages of doing business in our state, from top notch logistics to our skilled, dynamic workforce.”²

Table 1. Summary of Louisiana State incentives available to the E25 HPMSM Project slated for Ascension Parish in Louisiana.

The incentive package that has been agreed with the State includes direct and indirect measures of financial support for the Project, which will reduce the required funding to construct the Facility.

To meet the requirements of the incentive agreement, E25 has committed to:

• Construct the Facility with a minimum expenditure of US$211,640,709 on fixed plant and equipment and buildings/fixed structures.
• Where feasible and practical, consider using local labour and manufacturing capability in the construction of the Facility.
• Operate the Facility in order to provide employment in the State of Louisiana.
• Create and maintain sixty five (65) jobs with payroll totaling US$5.85M per annum for the duration of the incentive agreement.

In all cases, the current development plan for the Facility meets or exceeds all required thresholds to secure the State’s support under the agreement.

Earlier this year, E25 engaged EY to undertake an analysis of the likely value of the Louisiana incentives, both were included in the ITEPA summary of the benefits available to the Company under the Louisiana State incentives listed in Table 1. The total forecast Project benefit is estimated at approximately US$57M.

E25’s Louisiana Project is expected to create 220 new direct jobs with average annual salaries of more than US$90,000. Louisiana Economic Development estimates the Project will result in an additional 408 new indirect jobs, for a total of 628 new jobs in the Capital Region.

Figure 1. Members of the E25 HPMSM team met with Governor Jon Bel Edwards of Louisiana (3rd from left) in September 2023.

Element 25 will import manganese concentrate from its Butcherbird Mine in Western Australia to produce EV battery materials and its proprietary production process will also produce three reusable by-product streams which can be repurposed as fertiliser feedstocks, ferro alloy feedstock and in other industrial operations. As a result, the facility will minimise solid and liquid wastes. Furthermore, the majority of the reagents will be sourced from within Louisiana.

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