FYI updates value of alumina project to US$1 billion

Perth materials technology group FYI Resources has increased estimates of the net present value of its Western Australian high purity alumina (HPA) projects by 87 per cent to $1.33 billion (US$1.014 billion)

The company plans a kaolin mine and processing at Cadoux, WA and an HPA production plant at Kwinana south of Perth.

FYI said the upward revisions were the result of major planned technical improvements, substantial project de-risking and other commercial developments since the project was initially valued in March, 2020.

High purity alumina is used in lithium-ion battery separators, and in synthetic sapphire to manufacture substrates for LED lights, semiconductor wafers used in the electronics industry, and scratch-resistant sapphire glass used for wristwatches, optical windows and smartphones.

The Perth company said enhancements in the project include detailed flowsheet advances, process re-design production optimisation and extensive pilot plant (pictured) test work to optimise and de-risk its strategy.

It also reflects a memorandum of understanding (MoU) with alumina producer Alcoa of Australia for ‘the potential strategic development’ of FYI’s HPA project as well as potential project off-take arrangements.

The valuation is based on a $265 million, 10,000 tonne plant capable of producing Al2O3 at 99.999 per cent purity, and an average selling price of $34,600 per tonne.

This would produce annual earnings before interest, tax and depreciation (EBITDA) of $244 million on revenues of $342 million.

The larger volume production planned is the result of expected market growth for HPA, while higher capital costs reflect exchange rate movements.

FYI managing director Roland Hill said the quality and robustness of the HPA project had improved since initial estimates through evolution of the project’s design and pilot plant trials.

Hill said: “The updated DFS outcome represents a persuasive economic case and demonstrates the merit of the project in being developed as potentially one of the HPA sector’s highest quality, lowest capital and operating cost projects.”

Hill said the company had progresses financing options for the project.

Picture: FYI Resources/Perth pilot plant

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