Aussie investors love this high-value substance, says Canadian ASX hopeful
Canada’s SparrowHawk Strategic Metals wants to list on the ASX because Aussie investors better understand the emerging high purity alumina (HPA) than other bourses.
HPA — created from aluminous clay using various chemical procedures — is used as a base material for making lithium-ion battery components, LED lights, smart phone screens and surgical tools.
SparrowHawk is in the process of raising $3 million in seed capital and is aiming to launch an IPO in around 12 to 18 months.
The company’s goal is the be a low-cost producer of 99.99 per cent HPA and cobalt.
Right now there are just four ASX-listed HPA explorers. The closest to production is Altech Chemicals (ASX:ATC).
“We have been talking to potential investors in Europe and Canada but there is just no knowledge there on HPA, whereas the Australian market is well informed,” boss Cliff Fitzhenry told Stockhead.
“We heard about HPA last year and obviously with Altech Chemicals being the most advanced we had quite a bit of interest in their plans and what they were doing.
“We’ve researched the market quite a bit and I think it’s a huge game changing technology that the guys are using and it’s quite deceptive in the market. The market is growing at such a pace. There is a huge demand for this material.”
HPA is currently a small global market of about 25,000 tonnes annually.
But that is tipped to grow to around 48,000 by 2025 and 86,000 by 2030.
The high-value material is enjoying super-charged growth thanks to demand from a number of boom industries — especially lithium-ion batteries and scratch-resistant clear synthetic sapphire glass used in smartphone screens and lenses.
HPA is used in the separator of a battery to make lithium-ion battery chemistry more stable.
Allied Market Research predicts the HPA market will reach $5.3 billion by 2023.
Growth in demand is primarily dominated by China, Japan and South Korea.
SparrowHawk’s kaolin project is located in Tanzania near the Port of Dar es Salaam.
Kaolin is the feed mineral used to make HPA.
Mr Fitzhenry says there are a lot of kaolin deposits in Africa.
“Obviously for HPA the main thing is not really the size of the orebody or the tonnage, it’s the purity, and this deposit is quite pure,” he said.
“This kaolin deposit is actually the largest and purest in Africa.”
Grab sampling has confirmed the kaolinite within SparrowHawk’s “Pugu Hills” project is amenable to acid leach processing to produce HPA.
SparrowHawk says hydrochloric acid leaching of kaolinite to produce HPA is a disruptive, “game changing” technology that has cut production costs dramatically compared to historic producers.
The company is raising the initial $3 million to advance its HPA plans and start exploration on its cobalt projects in Uganda.