Alcoa of Australia has executed a binding term sheet with Western Australia’s FYI Resources as the company makes its way into the high-purity alumina (HPA) market.
The new project will see Alcoa and FYI aim to commence construction on a 8000-metric-tonne-per-annum (mtpa) HPA plant in 2024.
Prior to that, Alcoa and FYI will engage in a staged development process building up to the plant’s construction, which would be managed by Alcoa
Both parties would contribute specific intellectual property to the project.
Alcoa executive vice president and chief commercial officer Tim Reyes said the joint venture (JV) is a natural next step for his company.
“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,” Reyes said.
“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.”
Alcoa has recognised the current increased demand for HPA, which is proving important in the global energy transition, particularly for lithium-ion batteries used in electric vehicles.
HPA is also used to create mobile phones and is applicable to medical and aeronautical sectors.
It comes after Alcoa conducted a successful alumina trial in December 2020, using feedstock to produce the desired high purities.
Alcoa and FYI first established ties in September 2020, when they announced tentative plans to produce HPA.
Over 2021-2022, Alcoa will contribute an initial $5 million to stage one project development activities, including additional production trials, as well as the detailed design of an estimated 1000mtpa demonstration facility.
Stage two would see a demonstration facility constructed and detailed engineering undertaken before the circa $200 million HPA plant is built in stage three.
Stage two and three of the project are subject to final investment decisions.
FYI Resources managing director Roland Hill said the binding term sheet presents a capstone moment for his company.
“Coming to joint development terms on our HPA project is a transformational event for FYI,” he said.
“Today’s agreement brings the possibility of production closer to reality without further material dilution to our shareholders.
“… A future JV forms a robust structure capable of delivering the high quality HPA strategy, as outlined in the DFS, at a time when the international HPA market is forecast to grow in line with the world’s e-mobility uptake and emerging HPA applications.”