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Demand for high purity alumina (HPA) — a specialised product used in lithium-ion batteries, LED lights, and more – is growing at a rapid rate.
When it comes to lithium-ion batteries, HPA is currently used as the coating on the separator between the anode and cathode.
The HPA coated separators improve battery chargeability (charging and discharging rates), performance (power density), safety and overall service and durability.
This LIB battery separator market — valued at US$US6.2 billion in 2020 — is expected to reach $US11.3 billion by 2026.
But that’s not all. HPA’s battery applications could grow significantly beyond this.
FYI Resources (ASX:FYI) calls HPA the “hallelujah” battery material with applications in the separator and anode – and increasing potential candidate in cathode development.
The whole battery, basically.
FYI recently inked a deal with advanced battery graphite stock EcoGraf (ASX:EGR) to develop additional uses for FYI’s HPA product.
Investors are also watching closely for an update on an MoU between FYI and global aluminium giant Alcoa, where commercial terms are being finalised for a full joint venture operation.
* chats with FYI managing director Roly Hill about EcoGraf, HPA demand, and that all important deal with Alcoa.
What does the deal with EcoGraf mean for FYI?
“In simple terms — it is a joint venture between two battery focussed commodity players, looking at doing something completely different,” Hill says.
“[This JV] is a very elegant way of adding a little bit of value to the downstream side of what FYI and EcoGraf are doing individually.
“For us, it is all about expanding HPA’s applications in the battery.
“HPA is currently used as the coating on the separator between the anode and cathode.
“But it is looking like the utility of HPA is increasing. Now it looks like it [could be used] in the anode, and the cathode as well.
“The obvious benefits from the customer perspective are safety, performance, and possibly cost reduction, and life extension of the battery.
“Pretty exciting stuff, and the key thing for us is the interest [we are getting] from some of the larger battery groups.
“It just a matter of us adding a bit more value and ‘cracking the code’ a little, to see where it can lead.”
How much HPA will be required for the battery sector going forward?
“We would use Benchmark Mineral Intelligence as our guidance on that,” Hill says.
“They are suggesting that the anode growth – graphite and the HPA – could be +700% by 2025 from where it currently sits.
“The HPA market, where it currently sits, has a standing rate of 17% to 18% year-on-year growth through battery applications and the more traditional markets — LEDs, sapphire glass, those sorts of things. Big numbers.
“Potential additional uses of HPA in the battery [mentioned above] are not included in all those numbers.”
Is the EcoGraf deal separate to what FYI is doing with Alcoa?
“We had to defer the signing of the term sheets with Alcoa by a month,” Hill says.
“That is because, out of courtesy, we introduced this [deal with EcoGraf] to Alcoa, along with several other initiatives that we wanted to pursue.
“They very much liked that, and the other things that we are wanting to do. We had to defer everything just so they could get involved.
“It was originally outside the scope; now it is inside the scope.”
I can see everyone just waiting for FYI to sign the Alcoa deal. Everyone is hanging out for it.
“No more than me, I can tell you,” Hill says.
“[But] both companies don’t come this far – time, money, and effort – for it not to succeed.”
So, there is nothing to worry about from an investor point of view?
“We can’t say ‘signed sealed and delivered’ just yet, but it’s very close to the line. We are pretty much aligned on all the major terms,” Hill says.
“They are very bullish on the business, and the sector.
“They have done their homework on us, and the flow sheet. They are prepared to back it by putting skin in the game.
“I think the combination of their balance sheet and operational experience plus FYI’s agility – it will be strong and solid partnership.”
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