Impact Minerals is aiming to become a disruptive player in the high purity alumina market
\nBoss Dr Mike Jones thinks the company could produce the critical material cheaper than any producer or developer currently in the supply chain
\nThe key is a novel process developed in a literal kitchen and a salt lake containing 80 years of feedstock just 2m from surface<\/p>\n
Like all good recipes, Roland Gotthard\u2019s new processes for producing high purity alumina began in the kitchen.<\/p>\n
Specifically his home in Perth, where experiments showing sulphuric acid could reduce a clay into the critical mineral were posted to LinkedIn two years ago.<\/p>\n
A second process using secret reagents \u2014 kept close to Gotthard\u2019s chest amid a patent application \u2014 was completed at close to ambient temperatures of around 90 degrees Celsius.<\/p>\n
The refinery? His family\u2019s slow cooker. Normally tasked with brewing delicious casseroles, the ceramic pot was stuffed by the end.<\/p>\n
But not before the geologist-cum-not-so-mad scientist produced alumina salt with a purity of 99.8%.<\/p>\n
\u201cThe literature says this should leach at 90 degrees, it\u2019s not boiling, it\u2019s corrosive of chemicals, obviously, but wear a couple rubber gloves and some eyeglasses and I could do it at home,\u201d Gotthard said.<\/p>\n
\u201cSo I just got the slow cooker out of the kitchen, my wife\u2019s like, \u2018what the hell are you doing?\u2019 I filtered it all off, did some reactions and created the 99.8% purity salt in my own kitchen.\u201d<\/p>\n
Bench scale test work by pro lab ALS has since demonstrated the efficacy of both methods to produce 99.99% \u2014 or 4N \u2014 high purity alumina. <\/p>\n
Trading at prices of ~US$20,000\/t, it\u2019s a key component in the nickel-rich lithium ion batteries used in high-end Tesla EVs and the sapphire glass in LED lights.<\/p>\n
Gotthard\u2019s LinkedIn jaunts caught the eye of Impact Minerals (ASX:IPT)<\/a> and its managing director Dr Mike Jones, no stranger to innovation having entered the Australian mining industry with Western Mining Corporation\u2019s famous exploration division in the 1980s.<\/p>\n Impact, which had been working with BHP(ASX:BHP)<\/a> and its Xplor incubator program to target copper near the famous Broken Hill silver, lead and zinc mine, leapt at the opportunity.<\/p>\n The deal will see Impact develop a new process to produce HPA it thinks can be significantly cheaper and cleaner than current and prospective producers.<\/p>\n Roland Gotthard (left) and Impact MD Mike Jones (right) hope their JV will produce the world\u2019s lowest cost high purity alumina. Pic: Josh Chiat<\/p>\n \u00a0<\/p>\n Key to the pivot was the acquisition of Lake Hope, two salt lakes around 100km east of Hyden on the border of WA\u2019s Goldfields and Wheatbelt regions.<\/p>\n By completing a pre-feasibility study \u2014 expected to be done by the end of this year \u2014 Impact can up its stake via an earn-in agreement to 80%.<\/p>\n Playa One, controlled by Gotthard and a collection of family and friend investors, would hold the remaining 20%.<\/p>\n Lake Hope was identified by Gotthard and Co. a few years ago using open source geophysical data.<\/p>\n Most HPA is effectively reverse engineered, produced by Japanese conglomerate Sumitomo and a collection of Chinese processors from already refined aluminium metal.<\/p>\n This places Australian hopefuls in the unusual position of disruptors.<\/p>\n Australia has long been a major player in fields like nickel, lithium and even alumina, but is facing pressure from cheaper suppliers in Asia utilising new technology.<\/p>\n ASX HPA players want to flip that narrative, leveraging Australia\u2019s industrial and geological knowledge to produce the critical mineral more efficiently.<\/p>\n Orica-backed Alpha HPA (ASX:A4N)<\/a> is up 750% since 2019 \u2014 now capped at ~$950 million \u2014 planning to use industrial waste in North Queensland as a feedstock.<\/p>\n Cadoux (ASX:CCM)<\/a> want to produce it from a high-grade kaolin deposit, but are in recovery mode after the former FYI Resources was dumped by its proposed JV partner Alcoa early last year. <\/p>\n Both Cadoux and A4N plan to use hydrometallurgical processes distinct from the sulphate and low temperature leach processes tested by Gotthard and used to produce 99.99% HPA at bench scale by ALS.<\/p>\n A scoping study Impact tabled in December last year suggested the company could produce HPA at sector low operating costs of just US$3264\/t, generating 10,000tpa with annual post-tax cash flows of $174m a year.<\/p>\n Underpinning that is Lake Hope, which contains 3.5Mt of mud-like ore just 2m deep, enough to be mined for 80 years on Impact\u2019s early assessments.<\/p>\n At a grade of 25.1%, that\u2019s 880,000t of alumina, or Al2O3.<\/p>\n Dr Jones says the site contains 80 years of resources. Pic: Josh Chiat<\/p>\n If a PFS and 10t pilot plant this year is successful and mining approvals are straight-forward, Impact could be producing demonstration plant rates of 1000-2000tpa in a couple of years.<\/p>\n \u201cIt\u2019s really the natural advantages that the geology has given us in this lake,\u201d Jones said.<\/p>\n \u201cWe can see that (mining) it is going to be relatively straightforward. And so the estimated cost of production that we have now is significantly below any other producer globally.<\/p>\n \u201cAcross the whole mining and technology sector we\u2019re being disrupted on a daily basis by new materials, new ideas, in particular in the battery space. <\/p>\n \u201cAnd so it is a race to get to production and keep those costs as low as possible. But we (could be) so significantly lower than anybody else that we think we\u2019ve got a big head start and should be able to get to production before any other disruption comes along.\u201d<\/p>\n The shallow nature of the deposit \u2014 formed from the deposition of rainwater over millions of years \u2014 means drilling is extremely cost effective, much of it done by Gotthard and fellow geo Martin Neumann with only a PVC pipe and rubber hammer. <\/p>\n Lake Hope\u2019s quirkiness is such the head falling off one of the mallets was described internally as a \u2018rig failure\u2019 \u2026 easily fixed with a trip to the hardware shop in the agricultural hub of Hyden.<\/p>\n It means Impact\u2019s ~$2m cash pile will go a long way before a raising to support the pilot plant and PFS is needed later this year.<\/p>\n \u00a0<\/p>\n At a market cap of just $39 million, Impact is a minnow relative to other HPA stocks.<\/p>\n And, with its own in-house geology team, it has been running the ruler over a number of other projects in rare earths and base metals in recent years.<\/p>\n They include the Arkun REE project, currently being drilled, and Broken Hill in NSW, a large early stage exploration project that seems to be the best proposition for a spin-out or JV.<\/p>\n But none have yet come up with the sort of scale a single-operation company would require to re-rate.<\/p>\n Jones thinks Lake Hope, along with a planned processing plant likely in Kwinana\u2019s \u2018Battery Alley\u2019 or the coal turned \u2018future tech\u2019 hub of Collie, could be that project.<\/p>\n Drilling is so simple on the salt lake samples can be taken with a rubber mallet and PVC pipe. Pic: Josh Chiat<\/p>\n \u201cI\u2019m on record as saying, if you\u2019re going to build a one mine small gold project \u2014 or copper or even lead \u2014 it is a waste of everyone\u2019s time,\u201d Jones said.<\/p>\n \u201cYou need to be working on a world class deposit in order to really create long term shareholder wealth. And if we look at discoveries like the Chalice (ASX:CHN)<\/a> discovery, initially, recently Azure (ASX:AZS)<\/a> and a few years ago De Grey (ASX:DEG)<\/a> they\u2019re all billion dollar market cap companies just during the exploration phase. <\/p>\n \u201cAnd that\u2019s the scale that we set Impact up to find. <\/p>\n \u201cWe\u2019ve found a few small things, we\u2019ve been a bit unlucky over the years in terms of several small, very interesting deposits but they never grew to a size that warranted development.<\/p>\n \u201cSo when we came across this project it was like, OK we haven\u2019t discovered it ourselves \u2014 we discovered it on LinkedIn as we\u2019ve spoken about \u2014 (but) it\u2019s a 50 year mine life at least, that\u2019s one tick for world class. <\/p>\n \u201cIt\u2019s got very low operating costs \u2014 second tick. And the third tick is a growing market with high margins so we can\u2019t not give it a go.\u201d<\/p>\n \u00a0<\/p>\n In a study conducted for Alpha HPA in 2022, CRU Group projected supply deficits in the HPA market would emerge by 2026.<\/p>\n Jones says prospective offtakers are already asking Impact for material to test and qualify once it becomes available.<\/p>\n It has already made inroads with alumina buyers in Europe and America, who are concerned about the concentration of the supply chain in China.<\/p>\n That means so-called \u2018reputable supply\u2019, the proportion which would be IRA compliant in America and compliant with similar regulations in the EU, is around half of 2030 demand \u2014 something CRU projects will lift beyond 120,000tpa.<\/p>\n \u201cWe have a report that CRU did in back in 2018-19 and these figures have actually proven to be quite accurate over the last four or five years,\u201d Jones said. <\/p>\n \u201cSo the market is expanding at about 20% per annum.\u201d<\/p>\n Much of that growth has come from EV batteries, where is separates the anode and cathode to prevent overheating and \u2018thermal runaway\u2019.<\/p>\n AKA This.<\/p>\n JUST IN: Fire crews are currently on the scene of a battery fire at Moorabool, near Geelong. Firefighters are working to contain the fire and stop it spreading to the nearby batteries. https:\/\/t.co\/5zYfOfohG3<\/a> #7NEWS<\/a> pic.twitter.com\/HAkFY27JgQ<\/a><\/p>\n \u2014 7NEWS Melbourne (@7NewsMelbourne) July 30, 2021<\/a><\/p>\n\n There is around 5kg of HPA in every electric vehicle \u2014 if that vehicle uses a nickel-cobalt-manganese or nickel-cobalt-aluminium cathode chemistry.<\/p>\n But lithium-ferro-phosphate or LFP batteries, which are cheaper (though less energy dense), safer and don\u2019t contain HPA, are grabbing increased market share, especially in the dominant Chinese EV market.<\/p>\n HPA\u2019s role in LED demand, which Gotthard says is growing around 15% a year, provides insurance against changes in battery technology.<\/p>\n \u201cSo we\u2019re looking more not necessarily (just) feeding into batteries, but feeding into LEDs and that demand is just steadily growing,\u201d he said.<\/p>\n \u00a0<\/p>\n Located down a fire break that doubles as an access road to the remote \u2018magic lake\u2019, if they can get the mine up and running Impact would be one of a handful of operators in a sparsely explored district.<\/p>\n The closest town Hyden is a largely farming community which has experience as a service centre for projects like the Bounty gold mine and Forrestania nickel mines.<\/p>\n Famed for its Wave Rock landmark (also known as Katter Kich), Jones thinks Impact can be a contributor to the Hyden community. Pic: Josh Chiat<\/p>\n Bought by IGO (ASX:IGO)<\/a> in its disastrous acquisition of Western Areas, Forrestania is about to be put on ice as its Flying Fox and Spotted Quoll mines wrap up and nickel prices remain under water.<\/p>\n In that context, Impact could emerge as an important contributor to a region famed for Katter Kich, a Ballardong Nyungar cultural site more commonly known as Wave Rock.<\/p>\n To be clear, no one has any intentions to mine that site, which also doubles as the catchment for the town\u2019s water supply.<\/p>\n But Jones believes the town can become a base for the project, which would likely be mined on a campaign rather than continual basis \u2014 akin to Lynas Rare Earths\u2019 (ASX:LYC)<\/a> Mt Weld mine.<\/p>\n Over to the east are the traditional owners of Lake Hope, the Ngadju People, experienced in mining having struck a landmark native title agreement with IGO and its Nova nickel mine east of Norseman over a decade ago.<\/p>\n A heritage survey has already been carried out, identifying no sites of cultural significance and just one artefact outside the boundaries of the lake itself.<\/p>\n Jones is confident of navigating negotiations with the Ngadju Aboriginal Corporation and the prospect of drawing support from Federal and State Governments like the Critical Minerals Facility once it comes to funding the ~$250m project.<\/p>\n \u201cI think there\u2019s a very good chance of that. We applied last year, I think it was the second year that they\u2019d run the critical minerals grant at the federal level,\u201d he said.<\/p>\n \u201cThey gave a significant amount of funding ($4.6m) to Andrew Forrest and IGO to (plan) a process plant for downstream (nickel) processing in Kwinana \u2014 in Battery Alley. <\/p>\n \u201cWe only wanted a measly $1.5m funding, which we didn\u2019t get, but those things come up annually and then there are also other funds that we can apply for which are perhaps a little bit more appropriate. We will certainly be putting applications in for those. <\/p>\n \u201cThere\u2019s obviously politics involved in any grant of that scale and that nature, and it is putting jobs and money back into the economy. <\/p>\n \u201cSo in principle I don\u2019t object (to larger companies receiving support) but I think that the funds should be spread more widely to smaller groups like ourselves. <\/p>\n \u201cWe\u2019re trying to innovate and that\u2019s where the breakthroughs are made and so we\u2019ll see how we go in the next round.\u201d<\/p>\n \u00a0<\/p>\n <\/span>\u00a0<\/p>\n The reporter travelled to Lake Hope as a guest of Impact Minerals.<\/em><\/p>\n At Stockhead, we tell it like it is. While Impact Minerals was a Stockhead advertiser at the time of writing, it did not sponsor this article.<\/em><\/p>\n <\/span><\/p>\n The post The secret recipe that could make Impact Minerals HPA\u2019s Michelin Star chef<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Geology is key<\/h2>\n
The Hemi of HPA?<\/h2>\n
Batteries and LEDs<\/h2>\n
Riding the Wave<\/h2>\n
Impact Minerals (ASX:IPT) share price today<\/h2>\n\n