TORONTO (miningweekly.com) – The global demand for high-quality aluminium trioxide or high-quality alumina (HPA) is expected to soar by a yearly compounded growth rate of 52% over three years to 2015, a report said on Thursday.
HPA project developer Orbite Aluminae had commissioned consulting firm Secor to undertake a study to establish the market potential of HPA and Orbite's potential competitive advantages, the results of which were released on Thursday.
The study found that the HPA market was expected to increase from 2 030 t in 2009, to 25 350 t by 2015, driven higher mainly by the increasing demand for light-emitting diode (LED) lighting and other high-technology applications.
"Global demand for high-purity alumina is quickly exceeding the available supply. Orbite should help address this deficit, which is critical to a range of industries, and is well positioned to be a strategic alternative to the Asian producers who've largely dominated and controlled the market,” Orbite CEO Richard Boudreault said.
HPA is used mainly as a high-performance substrate in electronic applications, and its markets were expected to grow at double-digit rates through the next decade. A purity level of at least 99.99%, up to 99.9999% purity, defines HPA.
HPA is the product of a number of steps to purify smelter-grade alumina, which accounts for about 90% of the alumina market.
Traditionally, HPA was extracted through the Bayer process, which relied on dissolving minerals from bauxite with caustic soda and then chemically isolating the alumina, leaving behind toxic red mud. However, Orbite had developed a new process that uses hydrochloric acid leaching and that recovers all of the elements of bauxite, leaving behind no toxic residue.
The report found that most HPA suppliers were located in Asia, with China holding a dominant position. Japanese firm Sumitomo in 2009 held a 40% market share. However, the market was expected to fragment, with Sumitomo’s market share declining to 25% by 2015, as Orbite ramped up production and positioned itself as a significant alternative alumina producer.
The report also found that Orbite’s facility, currently under construction in Cap-Chat, Quebec, might yet turn out to be a key competitive asset against Chinese competitors.
Orbite was expected to benefit from the lower cost of energy and reagents, with limited cost pressures from labour and maintenance, while the HPA plant would be environmentally friendly. Orbite's technology would allow for the extraction of alumina from a wide range of source materials such as argillite, bauxite, and fly ash at significantly lower costs.
The company on Thursday said it expected to start producing 99.999% pure HPA early in 2013, when construction of its HPA plant was expected to be complete.
But, Boudreault added that the company was already working on improving the quality of alumina it would produce to 99.9999%, which would enable it to capture a premium for its HPA products.
Orbite's clay deposits in the Gaspe region of Quebec would be the primary source material for the production of 99.999% pure alumina.
Alumina traded at about $317/t in Australia earlier this week.
The company on Thursday was one of the most traded stocks on the TSX, its shares climbing by 15.48% to C$2.76 apiece.