FYI Resources signs JV term sheet with Alcoa aspiring to create a market-leading High Purity Alumina Business

FYI Resources is eyeing to create a market-leading high purity alumina (HPA) business, and for that matter, has entered into a partnership with global alumina leader Alcoa. They have signed a joint venture term sheet to create an initial demonstration refinery and an 8,000 tonne-per-annum HPA production facility.

As per the term sheet signed, Alcoa will bear the construction costs linked to the HPA refining project, of which 65 per cent will be owned Alcoa and the remaining 35 per cent by FYI Resources.

The term sheet is expected to pave the way for a future joint venture agreement, whereby FYI and Alcoa will collaborate to produce high purity alumina for the global market.

FYI Resources managing director Roland Hill said: "Coming to joint development terms on our HPA project is a transformational event for FYI. The strong alignment between the parties and resulting HPA business case is outstanding. Today’s agreement brings the possibility of production closer to reality without further material dilution to our shareholders.”

He added, “FYI considers that a future JV forms a robust structure capable of delivering the high-quality HPA strategy, as outlined in the definitive feasibility study, at a time when the international HPA market is forecast to grow in line with the world’s e-mobility uptake and emerging HPA applications.”

“We look forward to working together to form a material HPA business to realise our vision for HPA,” Roland Hill said.

The facility will come to life over three stages. In the first stage, FYI and Alcoa will draft a detailed design of the asset, which includes a 1,000 tonnes per annum demonstration facility. Production trials will also take place in this stage over this year and the next. This stage of works will require the companies to invest US$7 million.

In Stage 2, FYI and Alcoa are likely to launch their joint venture. The demonstration facility will enter construction, while engineering for a full-scale HPA refinery will kick-off. In this stage, Alcoa will solely fund US$14 million to bring the demonstration facility online.

From here, FYI Resources and Alcoa will decide whether to proceed or not into Phase 3. This is where the full-scale HPA plant enters construction, which will require around US$200 million.

If this joint venture eventuates, it will position both FYI and Alcoa at the forefront of the HPA refining industry.