The Element 25 Ltd (ASX: E25) share price is starting the week very strongly.
At one stage today, the ASX materials share was up as much as 23% to 74 cents.
In early afternoon trade, it has pulled back a touch but remains up 10% to 66 cents.
Why is this ASX materials share rocketing?
According to the release, Element 25 will supply up to 32,500 metric tonnes of manganese sulphate to General Motors annually. This will support the automaker's annual production of more than 1 million electric vehicles (EVs) in North America.
As part of the deal, General Motors will provide Element 25 with a US$85 million loan to partially fund the construction of a new manganese sulphate production facility in Louisiana, United States.
In total, the ASX materials share expects to invest approximately US$290 million to build the 230,000-square-foot facility. Site preparation is planned to begin in the third quarter of 2023, before opening in 2025.
The company highlights that the facility will produce manganese sulphate by processing manganese concentrate from the Butcherbird Manganese Project in Western Australia. It is expected to be the first facility of its kind in the United States.
Element 25's managing director, Justin Brown, said:
E25 aims to be a leading source of high quality, vertically integrated, traceable and ESG-compliant battery material to the global electric vehicle industry and GM's support does more than accelerate our strategy for HPMSM production in the United States. Together, we are creating a resilient and sustainable North American supply chain that will help introduce millions of customers to the performance and environmental benefits of EVs.