FYI - Alcoa Plan to Enter High Purity Alumina market with JV project - The Pick Online Magazine

Alcoa Corporation (NYSE: AA) intends to enter the growing high-purity alumina market to address increasing demand for sustainable products through a joint development project.

Alcoa of Australia Limited (AoA), a subsidiary of Alcoa Corporation, has executed a binding term sheet with Western Australia-based FYI Resources Ltd (ASX: FYI) for development activities to produce high-purity alumina, or HPA.

AoA will hold a 65% ownership interest in the project, which will have stages of development before potential construction, in 2024, of a full-scale, 8,000 metric-ton-per-year (mtpy) HPA plant. The development activities also set a pathway for a future joint venture for the project, of which AoA would be the manager and both parties would contribute specific intellectual property.

As a high-value product that will play an important role in a low-carbon future, the production of HPA is strategically aligned with Alcoa’s commitment to advance sustainably,” said Tim Reyes, Alcoa Executive Vice President and Chief Commercial Officer.

“This project is a natural complement to Alcoa’s existing business that builds on our expertise in alumina refining technology development and our production capability.”

Market applications for the non-metallurgical alumina, which is characterized by high brightness, resistance to corrosion, and capacity to accommodate high temperatures, include materials critical to the global energy transition, such as LED lighting that consumes less power and lasts longer and lithium ion batteries used in electric vehicles. Other high-tech applications include mobile devices and products used in the medical and aeronautical sectors.

The project follows a successful trial, in December 2020, that used Alcoa feedstock to consistently produce HPA at more than 99.99% Al2O3 (aluminum oxide) purity.

“Alcoa and FYI have complementary skills, experience and knowledge that combined will help to accelerate our entry into the HPA market, which is expected to have a compounded annual growth rate of nearly 20 percent to 2028,” Mr. Reyes added.

The term sheet outlines three phases for the development of the project:

• AoA will contribute an initial US$5 million, over 2021-2022, to stage one project development activities that will include additional production trials, as well as the detailed design of an estimated 1,000 mtpy demonstration facility.
• In stage two, a demonstration facility would be constructed, and detailed engineering undertaken for a full-scale HPA plant that would produce 8,000 mtpy.
• Stage three would include the start of construction for the full-scale plant.

Stages two and three are each subject to final investment decisions. The full-scale facility is currently projected to cost approximately $200 million, subject to detailed engineering studies.

AoA would fund its pro-rata share of project capital and make additional contributions to the demonstration and production facility construction costs, subject to final investment decisions, in consideration for its 65 percent ownership of the project.