Impact Minerals Pioneers Low-Cost HPA Production in Western Australia

• Impact Minerals is developing the Lake Hope Project, a high-purity alumina (HPA) project located in Western Australia. The project aims to produce 4N (99.99%) HPA, a high-value product used in a range of advanced applications.
• The company has developed an innovative two-stage processing route that involves an alkaline pre-treatment step followed by an acid leach, allowing extraction of HPA more efficiently than conventional methods.
• By using the alkaline pre-treatment and membrane technology, Impact can reduce the mass of material entering the acid processing by 50%. This translates to a significant reduction in acid consumption and substantially lower operating costs.
• Impact has been awarded a $2.9 million grant from the Australian government to accelerate the development of the project.The grant is part of an estimated $6.4 million research and development project to be completed within three years and designed to provide Impact with the relevant information required to complete a Definitive FeasibilityStudy in that time frame.
• A key component of the grant funding will be to construct a pilot plant, which is a key goal for 2025, and this will provide consistent material for off-take and qualification trials.
• The global HPA market is expected to experience strong growth in the coming years, driven by increasing demand from a range of high-tech applications. HPA is a key material in the production of LEDs, semiconductors, and sapphire glass, as well as an emerging component in lithium-ion battery separators.

High-purity alumina, or HPA, has emerged as a critical material for the 21st century. With demand surging for LEDs, semiconductors, sapphire glass and lithium-ion battery components, the global market for this specialty product is on a rapid growth trajectory. One company aiming to carve out a piece of this expanding market is Impact Minerals (ASX:IPT). This junior explorer has discovered a novel pathway to produce high-grade 4N (99.99%) HPA from an unlikely source - the salt lakes of Western Australia's remote interior.

In a recent interview, Impact's Managing Director Dr. Mike Jones provided an update on the company's Lake Hope Project and its plans to become a leading low-cost producer of HPA.

A Better Way to Make HPA

The key to Impact's HPA ambitions is an innovative new processing route. As Dr. Jones explains,

"For those who haven't followed the story, we're going to dig up the top 2 meters of a salt lake about 500 km east of Perth, bring it into Perth, build the processing plant, and that's where we're going to produce the HPA. It's just raw clay and it goes into this alkaline leach. It actually spits out very high quality potash as the first byproduct. What we're left with is actually a volume of material that's only half what we started with."

It's the next step that sets Impact's process apart. Why is this important? By effectively pre-concentrating the material through this alkaline leach step, Impact can dramatically reduce the amount of acid needed to purify the alumina in the final stages - cutting it by 50% compared to other HPA hopefuls.

"Immediately the acid requirement is half of what our competitors are using," notes Dr. Jones. "In terms of volume for volume production of HPA, that halves the input costs straight away."

From there, it's a matter of using standard equipment like evaporators and distillers to recycle the acid and achieve the 99.99% 4N HPA grade. Dr. Jones is confident this will position Impact as "the lowest cost quartile producer globally."

Fast-Tracking to Production

To accelerate its path to production, Impact has secured a $2.9 million government grant to build a pilot plant and complete a definitive feasibility study (DFS). The pilot plant will aim to demonstrate the new HPA process at scale and produce customer samples for offtake discussions.

"So the pilot plant should be up and running hopefully by the middle of next year," says Dr. Jones. "That pilot plant will give us a much more cost-effective way of regenerating our acid. We believe that will contribute significantly again to the low operating costs for the entire project."

The grant will also fund ongoing R&D in partnership with engineers CPC and The Mineral Recovery Research Center (MRRC) at Perth's Edith Cowan University, focusing on further optimizing the process to minimize costs and waste.

Interview with MD Dr. Mike Jones

Plugging into HPA Growth Markets

So where will all this HPA be going? While much of the recent buzz around HPA has centered on its use in lithium-ion battery separators, Impact sees strong potential in more established markets as well.

"Regardless of the energy transition, it's clear that incandescent light bulbs are on the way out," says Dr. Jones. "It's just more efficient to produce an LED. There's a 280-meter long LED screen for a concert that Adele was doing in Germany. Every LED has a sapphire wafer behind it which has been made out of HPA."

He sees this trend continuing to drive HPA demand "regardless of whether the green agenda is turned down or not." Semiconductors, medical ceramics and optical products are other key growth markets Impact will target.

The company is also exploring potential new applications for HPA through additional R&D projects.

"We've got applications in at the moment for other grants to perhaps develop some of our own uses of HPA," hints Dr. Jones. "It'd be good if you can come up with your own niche."

The Path Forward

With its HPA project steadily advancing and a clear focus on the most profitable market segments, Impact appears well positioned to benefit from the HPA boom. But as Dr. Jones cautions, the specialty chemicals business requires a different skillset than the average mining operation.

To that end, Impact has been assembling an experienced management and technical team to guide the project through to production. Additions include an ex Tanqi Lithium marketing executive, and a pair of veteran process engineers who previously built an HPA plant.

"Looking at Alpha HPA, they have clearly indicated in their ASX announcements that whilst they're building a 10,000 tpa plant, they've actually received indicative interest for 30,000 tpa," says Dr. Jones. "I truly believe that if we build it, they're going to come."

If Impact can achieve its goal of becoming one of the world's lowest-cost HPA producer, there's a good chance he will be proven right. The next 12 months should provide a steady stream of catalysts as the company refines its process, and proves out the pilot. For investors looking to gain exposure to the HPA growth story, Impact appears to be a name worth following.

Conclusion

As the Lake Hope project continues to advance, Impact's low-cost, high-purity HPA looks well positioned to disrupt the market. With a DFS on track by 2027, pilot plant completion earmarked for middle of 2025, and a team experienced in specialty chemicals projects, the company appears to have a clear path to production.

The Investment Thesis for Impact Minerals

• Emerging low-cost producer of high-purity alumina targeting the rapidly expanding LED, semiconductor, and sapphire glass markets
• Innovative new processing route using alkaline pre-treatment and membranes significantly reduces acid consumption and operating costs compared to peers
• $2.9M government grant to fast-track pilot plant construction and DFS completion by 2027
• Experienced management team with track record of developing specialty chemical projects
• Multiple near-term catalysts including pilot plant commissioning and DFS release
• Attractive entry point with $15M market cap and potential re-rate as HPA project is de-risked

Macro Thematic Analysis

The HPA Growth Story - High-purity alumina is quickly becoming a critical material as demand surges across a range of high-tech applications. The LED lighting market is seen as a key growth driver, with HPA required to produce the sapphire wafers found in every energy-efficient bulb.

Demand is also rising from the semiconductor industry as chips become ever smaller and more complex. HPA is needed to produce the ultra-high purity quartz crucibles used in silicon wafer manufacturing.