Victoria-based Pure Alumina plans to purchase Canadian company Polar Sapphire for $C25.7 million ($27.1 million) to consolidate its position as a high-purity alumina (HPA) producer.
The acquisition is expected to fast track Pure Alumina’s start to commercial production by developing a 1000 tonnes a year production facility outside of Toronto by early 2020. Polar Sapphire already has an existing pilot plant in the area.
Pure Alumina aims to reach a production target of 5000 tonnes a year of 99.999 per cent (categorised as ‘5N’) alumina within three years to capitalise on demand for alumina in LED lights and battery separators for electric vehicles (EV).
Polar Sapphire is noted for its patented production process, which combines pyrometallurgy and hydrometallurgy to produce high-purity alumina at a low cost.
“Polar’s process underpins an extremely low capital cost of $US12 million ($16.7 million) per 1000 tonnes a year of installed capacity and forecast operating costs of just $US6750 a tonne ($9375 a tonne),” Pure Alumina stated.
“This is expected to make Pure Alumina one of the lowest cost producers of 5N HPA in the world.”
The acquisition of Polar Sapphire, which operates an alumina pilot plant in Toronto, will be funded by $C13.75m in Pure Alumina shares and $C12 million in cash. The deal, scheduled for completion in third quarter 2019, depends on Pure Alumina raising $30 million in capital, which will be used to integrate its existing process with Polar’s low-cost technology.
“Exceptionally low estimated capital and operating costs means, once the initial 1000 tonnes-a-year plant is established, strong forecast cashflows are expected to largely fund future expansions,” Pure Alumina managing director Martin McFarlane said.
“The low funding requirements of this acquisition and the initial HPA production facility is a significant advantage when compared to other HPA projects.”
Pure Alumina is also developing the Yendon HPA project near Ballarat, Victoria, which will use existing kaolin deposits in the area.