This article is a sponsored feature from Mining.com.au partner Impact Minerals. It is not financial advice. Talk to a registered financial expert before making investment decisions.
High purity alumina (HPA) is a very niche sector, which makes it extremely lucrative for a company with the right project.
First off, what exactly is HPA? Simply put, it is aluminium oxide, or alumina, which occurs in various forms including corundum — one of the hardest natural substances known, second only to diamonds.
Corundum is also the source for rubies, with chromium impurities, and sapphires, with iron and titanium impurities.
HPA rose to prominence as a very useful component of batteries because of its hardness and the fact that it is thermally and chemically inert.
It is used in a wide range of products in small volumes, but spanning a vast range of technologies.
Dr Mike Jones, Managing Director of emerging HPA producer Impact Minerals (ASX:IPT), says one key use of HPA is as a separator between the anode and the cathode in a variety of battery architectures.
“Because of its thermal and chemical inertia, it prevents heat build-up from the chemical reaction in the battery, but allows the chemistry to flow through between the anode and cathode,” Jones tells Mining.com.au.
“The reason batteries explode is that the separator is not made properly, and so it just peels away from the edge of the battery, and then you get thermal runaway, and they catch on fire.”
HPA is also used to make the small sapphire wafer in light emitting diodes, semiconductors, and ceramics, including bioceramics used as implants.
This is where the level of purity becomes extremely important and varies depending on the final application.
Many high-end ceramics and batteries require a purity of 99.99%, or 4N, while there is a vast field of use for ceramics which can settle for the slightly lower purity of 99.9%, or 3N. However, for HPA to be accepted in the human body, it needs to be much higher purity again.
Niche but critical
“It’s a little-known but niche material that’s actually a crucial part of the energy transition, but as materials science and technology develops, they are finding uses for HPA in an increasingly broad array of categories,” Jones explains.
HPA is an industrial mineral, so there’s generally no shortage of source material to make it and while it is a straightforward process, according to Jones, there is a lot of fine control needed to get to a 4N purity.
“Many companies have tried and failed along the route, and so far there’s only been one successful company on the ASX, which is Alpha HPA (ASX:A4N).
“Six years ago they were a small junior explorer like us and came across a new method of making HPA, and now they’ve got a billion-dollar market cap. So it’s a fantastic outcome.”
Impact wanted to emulate this sort of success, so it set out on a relentless search for that one “company-making” project, and on its journey came across the Lake Hope HPA Project in Western Australia.
“We had tried for many years to find a world-class deposit and we found a lot of small things, unusual things, but never got that big breakthrough to find the big win that we wanted,” Jones says.
“So this particular project, when it came across my desk, it was a bit of an, ‘oh God’ moment, which is ‘we’re going to have to probably do this’, and that’s because there was a great resource, and so as a result there’s a clear runway to production.”
Lake Hope hosts a total resource of 2.8 million tonnes @ 25.1% for 700,000 tonnes of contained alumina.
A 2023 Scoping Study estimated Lake Hope would have a net present value of $1.3 billion, an internal rate of return of 55%, and one of the lowest operating costs per tonne of HPA globally.
Operating costs are estimated at about US$4,000 per tonne, net of byproduct credits. Meanwhile, 4N HPA and related products sell for more than US$20,000 per tonne at the moment.
“This project has got a net present value of over a billion dollars, for something that’s basically a small quarry, 2m deep, digging up the lake clay,” Jones notes.
“Because of the nature of those minerals, we can use a process that is inherently a lot less risky and a lot less costly than all of our competitors.”
In November 2024, Impact released a maiden measured resource of 730,000 tonnes @ 25.8% for 189,000 contained tonnes of alumina that will underpin a maiden probable or proven reserve.
This would support an initial mine life of at least 15 years at the proposed benchmark production rate of 10,000 tonnes per annum of HPA. The overall larger resource provides a solid foundation for a potentially much longer mine life of over 50 years.
Right now, Impact is working towards the completion of a Prefeasibility Study, which is due for release in the first quarter of 2025 after the final reports from various contractors and consultants are received.
Multi-byproduct potential
Impact has a lot of optionality within its Lake Hope Project, with the potential to either advance it to production as a HPA project or as a potash project.
“We are also looking at a method of producing potash as the key product to the project, basically de-risking the HPA, because you can get potash as a byproduct or you can get HPA as a byproduct, depending on how you do it,” Jones says.
“In order to be competitive in the potash space, you need a much larger mining operation than the one we’re planning for HPA, but we’re investigating that as a possible second string to the bow.”
Potash produced from Lake Hope is not expected to face the same obstacles that other Western Australian potash projects have encountered because it is not a brine project.
Jones says that’s because the potash is made from the lake sediments during the first stage of the HPA process.
“We add a reagent up front, and then the byproduct from that is high-quality potash,” he says.
“It’s a significant offset to the operating cost. We’ve also got ready buyers for that material in Kwinana.
“The reagent that we use up front is an alkaline reagent, which means that the volume of material going to the back-end acid leaching to produce HPA is much smaller than our competitors.”
The acid leaching process has been a stumbling block for other companies because of the volume of new acid that’s required to get to the purity levels required.
Jones notes the majority of Impact’s peers use relatively high-temperature hydrochloric acid leach up front, which requires a large volume of acid and specialised equipment. Alpha HPA use a solvent extraction process which is also more costly than Impact’s method.
Impact, however, has discovered a low-temperature leach process that requires half the amount of acid to produce HPA and its byproducts.
Another value-add for Impact is the potential to recirculate and regenerate the acid.
Low emissions
Lake Hope is expected to have a minimal environmental footprint with no on-site beneficiation required at the mine, nominal long-term rehabilitation requirements, and one of the lowest scope one and scope two CO2 emissions of any HPA production process globally.
Jones says this is a “natural outcome” of the deposit.
“We’re just taking the top 2m of the lake. We’ll be able to cover much of the lake with solar panels to provide all the power we need for an electric mining fleet and fully on renewables,” he says.
“By the time that we are ready to start trucking in earnest, the trucks will probably be electric as well.”
Lake Hope will connect to the South West Interconnected System, which is on track to be fully renewable by 2030.
Impact has nominated the Kwinana industrial complex as the prime location for a process plant.
The company investigated three other locations alongside Kwinana.
Esperance and Albany were considered for their respective ports and availability of industrial land, while Kalgoorlie — prior to the mothballing of BHP’s (ASX:BHP) Nickel West operations — presented an attractive location because of the access to the some reagents.
“When it came down to it, we realised Kwinana has got everything that we need right there, and the problem with all the other places is that the reagents that we need, we’d have to ship to each of those places,” Jones explains.
“Whereas the Kwinana industrial complex is like an ecosystem where you can get the things that you need and sell the things that you don’t want without too much problem.
“Whilst the trucking distance is maybe 200km further, it’s a negligible increase in operating cost overall compared to trucking multiple reagents, waste acids, and all the rest of that stuff to the other places.”
Impact recently appointed a marketing manager, Joseph Casella, as the company prepares to ramp up marketing efforts in 2025.
Casella was previously with lithium major Tianqi Lithium and has extensive experience in commercial sales across a wide range of commodities.
At one point he was tasked with setting up a HPA division for Tianqi, though that was put on the backburner.
“The back half of next year and into ’26 and ’27 is the key marketing time, because 2027 is when we hope to scale up to either a demonstration plant, 1,000 to 2,000 tonnes per annum, or into full-scale production, depending on demand,” Jones says.
This is around the same time the market is anticipated to head into deficit as supply plateaus at less than 70,000 tonnes and demand continues to climb to over 120,000 tonnes by 2030.
Expanding horizons
Impact is also in early stage talks with alumina groups in Europe and the US regarding potential partnerships.
Some existing 3N producers are looking to break into the 4N space, but that requires more time, effort and cash.
“So it would make sense that we do an alliance with those groups rather than trying to manufacture our own 4N,” Jones says.
“They also have a lot of skills in calcining, which is the final stage of heating that’s required to produce the ceramics. It would make a lot of sense that there’s probably some synergies with the existing 3N groups to do something together.”
Write to Angela East at Mining.com.au
Images: Mining.com.au & Impact Minerals
