Alcore to achieve the lowest production cost of aluminium fluoride, estimates ABx in recent economic assessment

Australian Bauxite Limited (ASX:ABX) has reported the economic assessment of its 89 per cent owned subsidiary Alcore Limited and work being undertaken by Alcore to process aluminium fluoride (AlF3). Aluminium fluoride is a mineral used for smelting aluminium. It is also being investigated for advanced lithium-ion batteries.

Alcore aims to become the first domestic producer of aluminium fluoride which will diversify and increase the security of supply for Australian smelters. It will also enable the country to export to other smelters worldwide.

Currently, Australian aluminium smelters rely entirely on imported AlF3. In the last 12 months, smelters secured more than 26,000 tonnes of AlF3 at an average US$ 1,266 per tonne from China alone.

Alcore AlF3 is the world’s first production of the mineral from recycled aluminium smelter waste and ABX’s gibbsite-rich clean bauxite. The company routinely produces AlF3 of commercial composition and bulk density in the laboratory.

According to Roskill, a respected industry analysis company, 75 per cent of existing commercial AlF3 production costs are raw materials, mainly fluorspar and aluminium hydroxide. Alcore uses lower cost raw materials, resulting in reduced operating cost. It uses fluorine from aluminium smelter waste instead of purchased fluorspar and aluminium from bauxite or aluminium smelter waste instead of purchased aluminium hydroxide.

The operating cost range for Alcore’s early years of AlF3 production is estimated to be US$800-950 per tonne. This will place Alcore in the lowest cost quartile of global production.

The median long-term AlF3 price and the current market price is around US$ 1,175 per tonne. Hence, this will provide an attractive operating margin for Alcore.