When the Australian government recently added high purity alumina (HPA) to its highly refined critical minerals list, a number of people began asking what it was why it been elevated so suddenly.
Just one of two new additions to the country’s critical minerals list (silicon is the other) HPA has already garnered significant government financial support with the nation looking to maintain its leading position in the specialist metals space.
Like the majority of metals added to the Australian critical minerals list in recent years, HPA has been identified as having significant potential to assist in the switch to renewable energy and support booming electric vehicle (EV) development.
According to the Australian government, HPA and silicon were added to the list after consultation with the minerals industry and science agencies over the past 18 months.
HPA Overview
So what is HPA and what is its modern technology future? HPA is a high-purity form of aluminium oxide (Al2O3).
According to leading Australian HPA developer Altech Chemicals Ltd (ASX: ATC | FRA: A3Y), HPA is a high-value (US$28,000 to US$40,000 per tonne), high margin, and highly demanded product which is increasingly consumed in the manufacture of large format lithium-ion batteries (LIBs), where it is attracting growing use as a coating on the separator sheets in LIBs.
HPA is also the critical ingredient required for the production of synthetic sapphire.
Synthetic sapphire is used in the manufacture of substrates for LED lights, semiconductor wafers used in the electronics industry, and scratch-resistant sapphire glass used for wristwatch faces, optical windows and smartphone components. Altech says there is no substitute for HPA in the manufacture of synthetic sapphire.
Growing market
With global HPA demand approximately 19,000tpa (2018), it is estimated that this demand will grow at a compound annual growth rate (CAGR) of 30% (2018-2028). By 2028, HPA market demand is forecast to be approximately 272,000tpa, driven by both the increasing adoption of LEDs worldwide as well as the increasing demand from LIB manufacturers.
According to Allied Market Research, the global HPA market was valued at US$1.3B in 2019, and is projected to reach US$4.8B by 2026, growing at a CAGR of 20.7% from 2020 to 2026.
Meanwhile, Graphical Research has forecast that the North American HPA market is projected to go past US$726.5M by 2027. At the same time Asia Pacific’s HPA market size will be valued at around US$3.1B by 2027.
Australian commitment
Australia has committed billions of dollars in the past 12 months to protect and grow its critical minerals position.
The nation recently unveiled its A$200M Critical Minerals Accelerator Initiative to support strategically significant projects at challenging points in their development. This funding will accelerate projects to market and drive investment.
It is also backing an A$50M virtual Critical Minerals Research and Development Centre which is being established to leverage the expertise of Geoscience Australia, CSIRO and the Australian Nuclear Science and Technology Organisation, to drive breakthrough collaborative research with industry.
Modern manufacturing initiative backs Alpha HPA
Mid-stage critical minerals projects, such as HPA refining, can now access the government’s A$1.3B Modern Manufacturing Initiative (MMI). MMI funding assists firms in piloting, demonstrating or scaling up the techniques and processes they need to achieve commercial success.
The first round of MMI funding under the collaboration stream saw four critical minerals projects receive grants totalling A$243.6M. The recipients included Alpha HPA Limited (ASX: A4N), which received A$45M to construct a high-purity alumina production facility in Yarwun, Queensland.
Alpha was the lead applicant, with the grant application supported by Australian multinational corporation Orica Ltd (ASX: ORI) as joint applicant.
The business collaboration between Alpha and Orica forms a key part of the HPA First Project, which leverages off the existing Orica manufacturing facility in Gladstone. 10% of the grant proceeds will flow to Orica to offset its capital expenditure required to support the project.
Alpha HPA’s managing director, Rimas Kairaitis, said the grant recognized the unique potential for the HPA First Project to supply critical HPA materials to important decarbonizing industries.
“The HPA First Project will showcase Smart SX Technology in action, and at scale. Solvent extraction has long been a method for extracting and purifying metals, but it’s not been successfully applied to aluminium until now. With the HPA First Project, the company is applying a proprietary licensed solvent extraction and refining technology to produce >99.99% pure aluminium products from a common industrial feedstock.
Market interest and numerous end-user discussions have enabled Alpha to advance its HPA First Project revenue forward, through the construction of a Precursor Production Facility (PPF).
This facility will focus on the manufacture and sales of Alpha’s 5N Ultra Aluminium Precursor salts, namely:
- Ultra Aluminium Nitrate (99.999% purity); used for various speciality applications including coatings, LED and laser phosphors, lithium ion battery electrode coatings and scintillators
- Ultra Aluminium Sulphate (99.999% purity); used predominantly for the synthesis of aluminium-bearing lithium-ion battery cathode active materials (eg: NCA and NCMA)
- The facility will have a total Ultra Aluminium Precursor production capacity of ~ 10-20MT per month, with construction taking place on the same site as the HPA First Project in Gladstone
- The 10-hectare, state-of-the-art Gladstone facility will leverage the latest in process control systems and automation and will be capable of producing 10,000 tonnes of HPA equivalent per year
Market Reaction
The value of HPA stocks jumped immediately on the ASX following the announcement of the critical minerals status.
One of those which celebrated the announcement of HPA’s promotion to the priority list for critical minerals and registered a positive bounced in its share price is FYI Resources Ltd (ASX:FYI).
FYI and joint development partner leading aluminium producer Alcoa Australia are currently aiming to become a major producer of premium quality HPA.
FYI managing director Roland Hill said its HPA project strongly aligns with the growing policy changes globally that require higher standards of input materials and increased environmental and social governance (ESG) of the battery minerals supply chains.
“We are encouraged to see that HPA has been included in the national critical minerals list. HPA is a unique material and FYI is proud of the role it will play in supplying premium quality HPA to the growing battery, downstream energy and critical minerals processing sector which will become increasingly important into the future,” Mr Hill said.
HPA’s future role in LIB development and its reputation as a critical mineral has seen a number of HPA-focused companies list on the ASX.
The list also includes Alchemy Resources (ASX: ALY), Andromeda Metals (ASX: ADN), Australian Bauxite (ASX: ABX), Collerina Cobalt (ASX: CLL), Nova Minerals (ASX: NVA), Platina Resources (ASX: PGM) and Pure Alumina (ASX: PUA).
