Electric Metals and the North Star Manganese Project: A Strategic Pathway to U.S. Energy Security and High-Return Critical Mineral Exposure

The global energy transition is accelerating, driven by the urgent need to decarbonize transportation and energy systems. At the heart of this transformation lies a critical but overlooked mineral: manganese. As lithium-ion batteries scale to meet the demands of electric vehicles (EVs) and grid storage, manganese—a key component in cathode materials—has emerged as a linchpin of the clean energy economy. Electric Metals (USA) Limited's North Star Manganese Project, located in Minnesota, offers a compelling case for investors seeking exposure to this strategic resource. By aligning with U.S. energy security goals, leveraging robust economics, and capitalizing on the geopolitical imperative to reduce import dependence, the project represents a rare convergence of market opportunity and national interest.

The Economic Case: A High-Return, Low-Carbon Supply Chain

The North Star Manganese Project's Preliminary Economic Assessment (PEA), released in August 2025, underscores its financial viability. With a post-tax net present value (NPV10%) of $1.39 billion, an after-tax internal rate of return (IRR) of 43.5%, and a 23-month payback period, the project's metrics rival those of the most attractive energy transition investments. These figures are underpinned by a 25-year mine life, projected to produce 4.3 million tonnes of high-purity manganese sulphate monohydrate (HPMSM), a compound essential for NMC and LMO battery chemistries.

The project's capital expenditure of $900.8 million, including plant expansion and closure costs, is justified by its access to the highest-grade manganese deposit in North America. At 19.1% manganese in inferred resources and 17.0% in indicated resources, the Emily Deposit offers a cost-efficient feedstock for HPMSM production. With a long-term price assumption of $2,500 per tonne for HPMSM—a figure supported by rising demand from EV manufacturers—the project's economics are resilient to short-term market volatility.

The Geopolitical Imperative: Securing a Critical Mineral Supply Chain

The United States currently imports 100% of its manganese, relying on countries like South Africa, Australia, and China for this critical input. This dependency is a vulnerability in an era of supply chain fragmentation and geopolitical rivalry. The North Star Project, by contrast, is a fully domestic producer of battery-grade manganese, aligning with Executive Orders on critical minerals and the Inflation Reduction Act's emphasis on localizing clean energy supply chains.

Manganese's strategic importance is underscored by its role in next-generation battery technologies. Tesla's planned 33% manganese content in its 4680 cells and Volkswagen's ambition for over 50% manganese in future models highlight the metal's centrality to the EV industry. By 2030, global demand for manganese in batteries is projected to grow by over 500%, driven by the need for lower-cost, higher-energy-density cathodes. The North Star Project is uniquely positioned to capture this growth, offering a low-carbon, ethically sourced alternative to imports.

The Market-Driven Opportunity: A First-Mover Advantage in a High-Growth Sector

Electric Metals' strategic vision extends beyond mining. The company is developing a vertically integrated supply chain, from ore extraction to the production of electrolytic manganese dioxide (EMD) and electrolytic manganese metal (EMM)—products in high demand from battery and electronics manufacturers. This vertical integration reduces exposure to commodity price swings and enhances margins by capturing value at multiple stages of the supply chain.

The project's proximity to major industrial centers and transportation hubs further strengthens its competitive position. Minnesota's infrastructure, including rail and shipping access, ensures efficient logistics for exporting HPMSM to U.S. and Canadian battery producers. Moreover, Electric Metals' engagement with stakeholders—including potential offtake agreements with EV and battery manufacturers—positions the company to secure long-term contracts in a market where supply is expected to lag demand for years.

Risks and Mitigations: A Realistic Assessment

No investment is without risk. The North Star Project faces permitting challenges, environmental scrutiny, and the inherent uncertainties of mining development. However, Electric Metals has already invested $26 million in technical and environmental studies, and its collaboration with Barr Engineering and Forte Dynamics signals a disciplined approach to risk management. The company's exploration drilling, which has intersected high-grade manganese at depths consistent with initial models, further de-risks the project.

Additionally, the U.S. government's prioritization of critical minerals—through funding, tax incentives, and regulatory support—mitigates geopolitical and operational risks. The project's alignment with national security objectives ensures it will receive favorable treatment in the permitting process, a critical factor in a sector where delays can derail even the most promising ventures.

Investment Thesis: A Strategic Bet on the Energy Transition

For investors, the North Star Manganese Project represents a rare combination of strong economics, geopolitical relevance, and market-driven growth. Electric Metals' ability to produce HPMSM at scale, coupled with its strategic partnerships and government support, positions it as a key player in the U.S. clean energy transition. The company's rebranding to Electric Metals (USA) Limited and its focus on domestic production signal a clear commitment to capitalizing on the manganese opportunity.

While the stock carries the volatility typical of junior miners, its exposure to a critical mineral with inelastic demand and a first-mover advantage in a U.S.-centric supply chain makes it an attractive long-term holding. Investors should monitor the company's progress in securing offtake agreements and advancing to feasibility studies in 2026, as these milestones will validate the project's commercial viability.

In a world where energy security and decarbonization are twin imperatives, the North Star Manganese Project is not just a mining venture—it is a cornerstone of the U.S. strategy to lead the next industrial revolution. For those willing to bet on the future, the time to act is now.