Pure Alumina punches above its weight and into the lucrative HPA market
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Special Report: After signing the non-binding merger with Polar Sapphire, Pure Alumina is preparing to carve itself a large slice of the rapidly growing HPA market.
The small ASX-listed company makes its aim clear: Pure Alumina (ASX:PUA) wants to become one of the world’s leading high-purity alumina (HPA) producers.
Demand for HPA, which is used in LED lighting and lithium batteries, is soaring, with sales expected to hit US$5 billion next year compared with US$2 billion in 2015.
Canada-based Polar Sapphire says it is currently producing 99.999 per cent HPA.
Known as 5N, this is the purest form of the product in the world and attracts a significant premium over lower-grade versions of HPA.
The company is currently operating a pilot plant in Toronto and already has a pipeline of 17 customers testing its product.
It says that feedback has been overwhelmingly positive, and customers are beginning to request large-scale orders.
To meet this surging demand, Polar Sapphire plans to build a commercial-scale factory which is projected to generate US$55 million a year in revenue by year-five.
Commercial HPA production will commence in 2019, years ahead of other proposed HPA projects.
Polar Sapphire’s patent-protected HPA process and custom-made equipment generates a product that allows customers to eke out 25 per cent more yield compared with using other sources of HPA.
The modular plant which can expand by simply installing additional modules, keeps costs extremely low.
The company says its patented HPA process gives it one of, if not the, lowest HPA capital costs in the world for 5N HPA.
If and when Pure Alumina completes its acquisition of Polar Sapphire, it will become the first ASX-listed HPA company to produce HPA and do it with a significant capital cost advantage.