Australian mining and metals company South32 has secured a $20m grant from the US Department of Defense (DoD), to support the Hermosa mining project in the US.

DoD awarded the financing under the Defense Production Act (DPA) battery grant programme.

The financing will be matched with a $43m investment by South32, to support the activities that will help advance the domestic production of battery-grade manganese.

Hermosa is a polymetallic development with zinc-lead-silver sulfide deposit, a battery-grade manganese deposit, with the potential for further polymetallic and copper mineralisation.

Located in a historic mining district in the Patagonia Mountains of Southern Arizona, Hermosa is the only US project to produce, zinc and manganese, two federally designated critical minerals.

South32 Chief Executive Officer Graham Kerr said, “The Department of Defense funding will help support the development of the Hermosa project’s battery-grade manganese deposit.

“The only advanced project in the United States that has demonstrated through a pilot testing program that it can produce battery-grade manganese from a domestic ore source.”

The DoD funding will help South32 advance battery-grade manganese production at Hermosa, to market in North America, including DoD-designated end-users.

Also, the funding is expected to create a cost-effective domestic option for manganese products within the electric vehicle battery supply chain that is currently dependent on imports.

Hermosa project is adopting sustainability and advanced technology in its underground mine design, through power supply from renewable energy and all-electric underground mining fleet.

The manganese deposit would have a lower carbon footprint than other methods to produce battery-grade manganese such as the Electrolytic Manganese Metal (EMM) production process.

The project, with a surface footprint of 750 acres is expected to use around 75% less water than other mines in the region, minimising environmental impact.

Furthermore, the project is expected to support the local economy, create up to 900 jobs and support investment across surrounding communities for decades.

Hermosa president Pat Risner said: “This project represents an opportunity for the United States to create domestic supply chains for the minerals and metals important to national security.

“The Department of Defense funding will help develop this critical resource on a timeline that matches that urgency.”