{australien_flagge}FYI Resources (ASX: FYI; FRA: SDL) and Alcoa (NYSE: AA) have achieved their defined goal in the third test run of the HPA pilot plant in Western Australia: refinements in process control have resulted in consistent and reliable HPA production to the 99.999% (5N) Al2O3 mark. Higher purity levels were achieved as well as an increase in the overall average purity. An originally planned fourth pilot test can be omitted due to the good results. The commercialization phase has now finally begun.
Figure 1: The graph shows the steadily decreasing spread in the total of four test runs since 2020. Optimized process control enabled an ever tighter spread and more uniform purity during the various pilot plant trials.
Commenting on the results of the third test phase, Roland Hill, Managing Director of FYI, said, “Reaching 5N is a milestone. However, it is equally satisfying that the results of the third trial in the pilot plant clearly demonstrate the progress of our development in terms of the higher purity level achieved and the narrower operating range that enables a much more uniform purity level. With the impressive trial result and the successful completion of the pilot plant phase, the joint development team will now pursue its clearly defined HPA marching plan and bring the project one step closer to commercialization.”
Summary: Not long ago, the market would have reacted euphorically to the news that kaolin-based HPA could be reliably produced in (and near) 5N grade. After all, the advantages over conventional HPA production from the raw material bauxite are significant. Kaolin-based HPA is “greener” and much cheaper to produce to boot. In particular, the 5N mark can only be achieved with bauxite-based HPA – if at all – with the greatest effort. But investors’ expectations are governed by their own laws. No sooner has one milestone been reached than they demand the next. Institutional investors in particular now want to see concrete steps toward economic implementation. Their question is no longer “if,” but when and in what quantities production will take place at what cost, and how high the investments will be. It is probably only the answers to these questions that are likely to move the FYI price decisively again.
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