Australian high-purity alumina firm FYI Resources Limited and Alcoa of Australia Limited shored up an ongoing agreement to produce high-purity alumina (HPA) last week with the signature of a binding Terms Sheet to develop an HPA refining project.
The newly-signed documents lay out a path for a future joint venture between the firms, but it is still subject to final investment decisions by both parties. Per FYI, the partnership with Alcoa is critical to turning the research and development project into a profitable business venture.
FYI Resources Managing Director Roland Hill said in a related press release that the agreement is a pivotal moment for his firm’s HPA project.
“Coming to joint development terms on our HPA project is a transformational event for FYI. The strong alignment between the parties and resulting HPA business case is outstanding. Today’s agreement brings the possibility of production closer to reality without further material dilution to our shareholders. FYI considers that a future JV forms a robust structure capable of delivering the high quality HPA strategy, as outlined in the DFS, at a time when the international HPA market is forecast to grow in line with the world’s e-mobility uptake and emerging HPA applications.”
“FYI considers that the project has potential for scaled increases in production across multiple jurisdictions including North America and Europe,” continued Hill.
FYI says the two firms will fund the project on a pro-rata basis. Additionally, Alcoa has committed to making more financial contributions to production facility costs. Any losses accrued will be similarly partitioned out among equity entitlements.
At present, the project is planned for three stages. The first stage will include the construction of a demonstration facility along with continuation of production trials through next year. Phase two would consist of a joint venture and a full-scale HPA production plant that would produce at a rate of 8 thousand metric tons per annum. Phase three would see full-scale HPA production commence, likely in 2023 or later.