The High-Purity Alumina (HPA) investment landscape has struggled to gain traction and capture investors' attention. As I've noted before, timing is crucial; could 2025 present the ideal opportunity?
I recently came across Alpha HPA Limited (ASX: A4N) and was impressed by its performance. This prompted me to take a closer look at the company, as it stands out among the HPA stories I’ve encountered over the past decade. At the time of writing this blog, A4N has a market capitalisation of AUD 977.2 million and is trading at AUD 0.86. The share price chart (Figure 1) for A4N is particularly noteworthy.
Figure 1: The share price chart for Alpha HPA Limited. (source: Commsec)
Let's go through the details and understand the whole Alpha HPA Limited business. For those who want to skip to the parts of the review, please use the list below.
1.0 Who is Alpha HPA Limited?
As stated on the company's website, Alpha HPA is an Australian-based, publicly listed firm that pioneered the world's first application of the solvent extraction (SX) purification method to aluminium, resulting in a diverse range of ultra-high-purity aluminium products.
The company's high-purity aluminium oxides, hydroxides, nitrates, and sulphates are utilised in various high-tech industries, such as LED lighting, synthetic sapphire, semiconductors, Direct Lithium Extraction (DLE) technology, and lithium-ion batteries. Alpha HPA's market-leading purity levels distinguish us, achieved with a significantly reduced carbon footprint.
Alpha HPA aims to support decarbonisation by providing the world with the most sustainable, high-purity aluminium products. Our implementation of Smart SX Technology demonstrates our dedication to global decarbonization and our vision of advancing the entire world collectively.
2.0 The Smart SX Technology
As stated by A4N, their licensed Smart SX Technology is the world's first highly selective scientific process that precisely extracts aluminum, enabling the production of a broad spectrum of ultra-high-purity aluminum products while significantly reducing energy consumption, emissions, and waste.
Aluminium is among the most carbon-intensive industries globally, responsible for up to 3% of worldwide emissions.
The Smart SX Technology results in up to 70% lower total carbon emissions compared to the traditional high-purity alumina production process because:
The technology avoids using energy-intensive aluminium metal as the feedstock and recycles the primary reagents as by-products. In addition, the process uses renewable energy to power the facility.
2.1 The Science of the SX Technology
(source: Alpha HPA Limited website)
The Smart SX Technology process employs established solvent extraction methods specifically adapted for the highly selective extraction of Al3+ cations from aluminium-loaded solutions. This process transforms aluminium-laden organic solvents through two crystallisation stages into an intermediate product that can be calcined to produce high-purity alumina (HPA) while generating environmentally friendly off-gases.
The loaded organic stream generated from this process can be directed to any acid stream, yielding 5N+ purity aluminium precursors (salts) or 4N+ boehmite or alumina. Notably, the process boasts a recycling efficiency of nearly 100% for its reagents and process streams.
Figure 2: A4N Technology. (source: Alpha HPA Limited)
The Smart SX process is characterised by its straightforwardness, innovation, and adaptability. It effectively converts a common industrial feedstock into a range of ultra-pure aluminium products with high efficiency and low costs. This technology does not rely on novel operational units; rather, it applies unique, proprietary process chemistry, marking the establishment of the first aluminium SX facility in the world.
Figure 3: Flow diagram showing the Alpha HPA process. (source: Alpha HPA Limited)
2.2 Traditional Aluminium Processing
Traditional HPA production methods rely on outdated, emissions-heavy technology. Historically, HPA has been synthesised from the aluminium metal feedstock or produced by using hydrochloric acid to leach kaolin clay. These processes are highly energy-intensive, emit large amounts of carbon and chemicals, and generate considerable waste. This is not only harmful to the environment but also inefficient. Alpha HPA's innovative processes and products achieve industry-level purity with fewer emissions and almost no waste.
Figure 4: Alpha HPA Smart SX process compared to the Traditional Methods of production. (source: Alpha HPA Limited)
A4N has transformed the standard of aluminium purification to produce sustainable, high-purity aluminium products that are industry-changing and available in commercial quantities.
3.0 History
The beginnings of Alpha HPA Limited can be traced back to 2010, where it existed as Auger Resources Limited, where they had a 90% interest in an Indonesian based company, PT Golden Pricindo Indah ("Golden"), which holds Izin Usaha Pertambangans ('IUPs') or mining business licences covering the Central Jampang gold project area in
southwestern Java. The agreement marks an expansion of Augur’s exploration focus beyond central NSW and its renewed focus on gold projects. [1]
On the 24th of October 2017, the company, which had a name change to Collerina Cobalt Limited (ASX: CLL) on the 2nd of May 2017, announced the following; "Outstanding Aluminium Solvent Extraction Test Work Results". This release to the Australian Stock Exchange (ASX) would be one of the early news that would create what is today the business of Alpha HPA Limited.
The current version of the Board made their appearance on 1st November 2017 with the appointment of the current Managing Director, Mr. Rimas Kairaitas, and Non-Executive Director Mr. Anthony Sgro. Alpha HPA Limited started its life with a name change from Collerina Cobalt Limited on the 30th of November 2018.
Here are some notable news release to the ASX that should allow a genral understanding of the developing storyline for Alpha HPA Limited. Please note that the list is not a complete list of announcements. The complete list can be found on the Investors page on the Alpha HPA Limited website.
3.1 ASX Releases 2025 and 2024
2025 - 01 - 14 | |
2024 - 12 - 11 | |
2024 - 08 - 20 | |
2024 - 05 - 20 | |
2024 - 04 - 17 |
3.2 ASX Releases 2023
2023 - 11 - 02 | ||
2023 - 09 - 28 | ||
2023 - 06 - 05 | ||
2023 - 04 - 05 | ||
2023 - 03 - 23 |
3.3 ASX Releases 2022
2022 - 11 - 29 | |
2022 - 11 - 14 | |
2022 - 04 - 28 | |
2022 - 03 - 16 |
3.4 ASX Releases 2021
2021 - 11 - 05 | |
2021 - 08 - 18 | |
2021 - 06 - 03 | |
2021 - 04 - 28 | |
2021 - 04 - 12 |
3.5 ASX Releases 2020
2020 - 12 - 23 | |
2020 - 11 - 25 | |
2020 - 11 - 11 | |
2020 - 10 - 08 | |
2020 - 09 - 28 | |
2020 - 08 - 20 | |
2020 - 03 - 17 |
3.6 ASX Releases 2019
2019 - 07 - 01 | |
2019 - 03 - 07 |
3.7 ASX Releases 2018
2018 - 12 - 04 | |
2018 - 11 - 30 | |
2018 - 11 - 20 | |
2018 - 11 - 20 | |
2018 - 09 - 06 | |
2018 - 08 - 05 | |
2018 - 07 - 08 | |
2018 - 04 - 25 | |
2018 - 03 - 20 | |
2018 - 02 - 20 |
3.8 ASX Releases 2017
2017 - 12 - 07 | |
2017 - 11 - 29 | |
2017 - 11 - 28 | |
2017 - 11 - 23 | |
2017 - 11 - 12 | |
2017 - 10 - 31 | |
2017 - 10 - 23 | |
2017 - 09 - 19 | |
2017 - 05 - 02 |
4.0 The Business
I am new to understanding this part of the market, but looking at the series of ASX announcements by Alpha HPA Limited since 2017, at the the current market capitalisation of nearly AUD 1B, one would have a reasonably valid reason to feel that there is a lot of upside, especially when you look at the USD 3.6 trillion valuation for NVIDIA.
The business of HPA is still in its infancy for the ASX, and based on my my limited research on the sector, Alpha HPA Limited is the standout. Looking at the business of Alpha HPA Limited, they are the ones supplying the source products for the likes of the semiconductor business, so there are probably going to be limited competitors.
As Alpha HPA Limited clearly states on their products section of the website, the products they are creating are for the most aggressive market currently in the investment space.
We are sustainably producing a growing range of ultra-high purity aluminium oxides, hydroxides, nitrates and sulphates for a wide range of high technology industries including LED lighting, synthetic sapphire, semiconductors, Direct Lithium Extraction (DLE) technology and lithium-ion battery markets – at world-leading purity levels and at a dramatically lower carbon profile.
There is no doubt in anyone's mind that the age of artificial intelligence (AI) and Technology Automation is the hottest discussion. The likes of Tesla, Dell, Nvidia, Apple, Facebook, Amazon, etc., are all going to be the end users of these products potentially coming out from Alpha HPA Limited.
The world is now all about AI and computing technology, so Figure 5 is evidence that the market of supplying bits and pieces to those companies is the main game. Therefore, imagine where the likes of Alpha HPA Limited will be in terms of valuation once they are fully operational.
Figure 5: The top 20 companies worldwide by market capitalisation. (source: Companies MarletCap)
A good way to understand the potential of someone like Alpha HPA Limited is to imagine that there is only one iron ore company on the ASX. The big unknown is if they are able to fully commercialise their business. Presently, it does appear to point that they are on the way to a very prosperous path.
5.0 Other Companies on the ASX with Similar Business
Two companies come directly to my mind that swim in the HPA sector. The first one is the former FYI Resources Limited, which is now under a new name, Cadoux Limited (ASX: CCM) and Altech Batteries Limited (ASX: ATC).
Altech Batteries Limited was the most aggressive with their strategy, but of late, it appears that Altech is now moving into the battery space. There is a name change to Altech Batteries from its original name of Altech Limited, which was, as far as I can remember, 100% HPA development.
As I write this review, I haven't delved into Altech Batteries' primary business focus yet. However, considering the recent name change and their latest release mentioning batteries, it seems that a shift in their future direction is underway. Cadoux goes further to mention that they are also positioning themselves to be a significant producer of both HPA and rare earths.
Cadoux on their website does state that they are an emerging developer of high-quality critical minerals. Cadoux is focusing on two potential world-class projects: high purity alumina (HPA) and rare earths downstream production.
If readers do know of other companies in this space, please let me know.
6.0 Samso Concluding Thoughts
As an investor, I have only had one win in the ASX technology space and that was with Pointerra Limited (ASX: 3DP). I ended up staying in that stock for almost 5 years before deciding that an exit was required. That was a great journey from the early beginnings.
Alpha HPA Limited is not a technology stock , but, for me, I associate it with technology as it is all about what the HPA products will add value to once it has left their hands. I feel excitement in what they could become as the race to produce quality and sustainable HPA products is one of the most sought-after business, especially for ASX companies. The value creation for shareholders is undeniably substantial, as those in Alpha HPA Limited will surely attest.
As we are all cautious creatures when we are parting with our hard-earned money as investments, what gives me comfort is the amount of money that has come from government and industry organisations to Alpha HPA Limited. The demand for Alpha HPA products is very clear, as there is no turning back in terms of the needs coming from the AI and technological progress in the coming decades.
Figure 6: The ASX release for the AUD45M Federal Government Grant. (source: Alpha HPA Limited)
There would have been a lot of smart people going through the business models before parting with those large sums of money (Figure 6). Unlike the resource path, which I am very familiar with, the amount of unknowns is lesser and more predictable. I am not saying that it is easy to build a technological business; I am just saying that the unknowns are lesser.
As I did my research on the company, I became very informed about the business and the potential of future valuation. I am very happy to have come across this story. I am sure there are more people out there that have looked at the business in greater detail, but sometimes, enough information is all you need. As we all know, when you are too smart, too close to the story, our judgement can be clouded and be the detriment of our investment decisions. :-)
References:
Alpha HPA Limited Announcements
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