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How King River Resources (ASX:KRR) is poised to reap rewards of HPA tailwinds 

Summary

  • King River Resources aspires to be a significant producer of high-value high purity alumina (HPA).
  • The demand and prices for 4N HPA are expected to improve in the forthcoming years, backed by significant growth of two critical high technology markets. 
  • Synthetic sapphire glass, which has applications across products like smartphones, plasma display and optical lenses, utilises HPA as substrates. 
  • The skyrocketing production of electric vehicles (EVs) has been one of the major driving forces to fuel HPA demand for lithium-ion batteries. 

King River Resources Limited (ASX: KRR) has advanced a steady stream of developments to produce ≥4N (99.99%) purity High Purity Alumina (HPA). The Company aims to position itself as a significant player in the rapidly growing high-tech product markets that use HPA. 

During the March quarter, KRR produced HPA at >4N (99.99%) purity by calcining high purity precursor materials purified by its refining process using an industrial chemical feedstock material, which is readily available in the domestic and international markets. Meanwhile, metallurgical tests and engineering studies seem to have further validated HPA quality for applications in different industries. 

ALSO READ: King River Resources’ Shares Jump On HPA Purity Verification Results

With this backdrop, let us explore how KRR’s undertakings align with the recent market trends to maximise value for its shareholders.

KRR in sweet spot with tailwinds from high-tech industry

The intense market penetration of electronics and associated products has steered the HPA industry on the cusp of a boom. Notably, synthetic sapphire glass, which has applications across several industry segments, utilises HPA as substrates. 

Source: Copyright © 2021 Kalkine Media  

Sapphire glass, armed with a scratch-resistance property, is widely used in manufacturing smartphones, plasma display screens, smartphones, optical lenses, etc. Such HPA related products have witnessed significant demand escalation over the recent years. 

HPA is also used as a precursor material in light-emitting diode (LED) production, which continues to receive significant government focus in the wake of growing popularity for energy-efficient lighting. 

In the given context, the high purity HPA produced by KRR relishes strong commercial potential to drive growth momentum for the Company. 

ALSO READ: King River Resources’ 1H FY21 Brimming with a Slew of Project Developments

Rapidly advancing battery market offers robust growth potential

The skyrocketing popularity of electric vehicles (EVs) has been one of the major driving forces to rev up the high purity alumina market. The ripple effect is evident in the steeply rising consumption of HPA-coated separators used for manufacturing lithium-ion batteries. 

Significantly, the EV demand is heating up, thanks to the global efforts to facilitate the green transition and the entry of significant international players in the EV space. 

Source: Copyright © 2021 Kalkine Media  

ALSO READ: King River Resources (ASX:KRR) Turns In Healthy March Quarter with HPA Production Progress

KRR steering initiatives to cash in on lucrative opportunities

Late last year, KRR switched to an alternative HPA production route, using readily available industrial aluminium chemical feedstock, thus eliminating the need for associated mining, processing, and logistical infrastructure for the Speewah Project. 

The more direct pathway for completing a process design – that too at a lower risk – and an expedited path to produce HPA could prove to be significantly critical in strengthening the Company's foothold in the growing market. 

ALSO READ: King River Resources Making Major Strides in HPA Space Amid Escalating Demand

The Company recently updated on its HPA prefeasibility study (PFS) progress, which is edging closer to completion with the wrap-up of relevant studies and financial modelling. In addition, the Company has continued its investigation for an appropriate industrial site in the Kwinana industrial area, which offers access to feedstock and reagent suppliers, infrastructure, port, energy supply, and a skilled workforce.

Meanwhile, the Company has been advancing with the development of a mini-pilot plant to demonstrate its ARC HPA refining process at a larger scale for the Definitive Feasibility Study and to produce market samples. 

ALSO READ: King River Resources (ASX: KRR) Turbocharges HPA Prefeasibility Study

The demand and prices for 4N HPA are anticipated to rise in the years to come as the two critical high technology markets (synthetic sapphire glass and HPA-coated separators using HPA as a precursor material) record significant growth. At the same time, King River Resources has aligned its undertakings well to make the most of the buoyant market scenario and maximise value for its shareholders. 

KRR stock was trading 3.448% higher at AU$ 0.030 on 9 June 2021 (AEST 12:05 PM).

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