King River Resources’ subsidiary charged up to advance HPA project

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King River Resources’ subsidiary charged up to advance HPA project

KRR’s HPA application in the EV industry
Image source: KRR Update, dated 25 January 2022

Highlights

  • High Purity Metals is committed to producing 5N (≥99.999%) high purity aluminium precursor compounds and 4N (≥99.99%) high purity alumina (HPA).
  • The 2,000tpa 5N aluminium precursor plant is projected to provide not only a much lower cost of market entry but also a greater range of potential products to market.
  • Aluminium precursors and HPA are premium-priced materials, enjoying significant annual demand growth forecasts.

King River Resources Limited (ASX:KRR) has shed light on the progress of the High Purity Alumina (HPA) Project, being advanced by its wholly owned subsidiary High Purity Metals Limited (HPM).

The strategic focus of HPM includes the production of 5N (≥99.999%) high purity aluminium precursor compounds and 4N (≥99.99%) high purity alumina (HPA). These aluminium compounds would be manufactured using the Company’s proprietary ARC HPA process using an industrial aluminium chemical feedstock.

ALSO READ: Major HPA milestones mark King River’s action-packed December quarter

High Purity Metals is capitalising on the significant project developments to produce a suite of aluminium salts, aluminium compounds, boehmite and HPA, which are in high demand in the LED, optics, and battery industries.

With this backdrop, let us deep dive to explore more about HPM’s strategy, plans and development of the HPA project.

Strategically focused to reduce CAPEX

High Purity Metals is committed to commercialising the 5N aluminium precursors and 4N HPA opportunities in a sustainable way that maximises the return on investment for its shareholders. Thus, HPM intends to initially build a 2,000tpa 5N aluminium precursor plant to minimise the CAPEX for entry into the market with a high rate of return.

ALSO READ: Success story continues for King River (ASX:KRR) with latest HPA Type 1 Precursor results

Notably, a prefeasibility study into a 9,000tpa 4N HPA operation with a CAPEX of AU$203 million, has indicated:

  • Annual EBITA of AU$193 million
  • Net present value (NPV) of AU$1,043 million
  • Internal rate of return (IRR) of 50.8%

The developments further progressed in a detailed feasibility study for the 2,000tpa 5N aluminium precursor plant, which is projected to provide not only a much lower cost of market entry but also a greater range of potential products to market.

Unique process showcases production and bottom-line efficiencies

The ARC HPA process is a unique & distinct approach to the traditional industry process for the manufacture of HPA. A simple method is used to extract then purify the aluminium from the acid leach solutions when treating mineral concentrates.

It allows the production of 5N aluminium precursors and 4N HPA using an industrial chemical feedstock, differentiating HPM from companies that are synthesising it from aluminium metal or from aluminous clays such as kaolin.

ALSO READ: Factors wheeling King River Resources (ASX:KRR) on an exciting growth trajectory

Products

HPM is focused on producing several aluminium compounds, with its recent success validating the progress.

Aluminium compounds

Source: Copyright © 2022 Kalkine Media®, Data Source: KRR Update, dated 25 January 2022

In a significant update, High Purity Metals indicated that it is now in the early stages of targeted contact with CAM (Cathode Active Materials) and P-CAM manufacturers. With current demand influenced by product availability, the firm is encouraged to focus the DFS plan on producing Type 1 aluminium salt precursor for the P-CAM market. Meanwhile, the Type 2 precursor, which is an aluminium compound, can be processed through to become either boehmite or 4N HPA, and can be used to make other precursor aluminium salts integral in the lithium battery supply chain.

ALSO READ: King River Resources’ recent developments boost HPA DFS progress

A snapshot of market opportunities

Aluminium precursors and HPA are premium priced materials required by high technology industries. They enjoy significant annual demand growth forecasts, driven primarily by two fast accelerating sectors: the sapphire/LED industry and the rapidly expanding lithium-ion battery industry.

HPA applications

Source: Copyright © 2022 Kalkine Media®, Data Source: KRR Update, dated 25 January 2022

KRR has highlighted that the ability to produce a variety of 5N aluminium precursors based on market needs and the potential to make HPA in the future based on the project economics previously reported in the Company’s HPA PFS is an attractive proposition.

Road Ahead

With considerable investment in R&D, High Purity Metals expects to imminently have product samples available to send out to end-users for qualification in their process. At the same time, the firm is also conducting ongoing experiments on manufacturing P-CAMs.

Alternative chemical feedstocks are also being explored for a range of purposes, such as:

  • To de-risk the supply chain
  • To improve the process
  • To investigate how to extract value from what would otherwise be a waste stream from other process industries

The commissioning of the laboratory-scale pilot plant is completed. There is flexibility in the location of the pilot plant, with discussions underway to select a suitable industrial site.

Upcoming milestones for High Purity Metals

Source: Copyright © 2022 Kalkine Media®, Data Source: KRR Update, dated 25 January 2022

KRR shares traded at AU$0.024 midday on 25 January 2022, up over 2% from the last close.

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