The Alumina Limited (ASX: AWC) share price is crawling higher in afternoon trade today and is now changing hands at $2.12 apiece.
Alumina shares are on the move after the company announced an update for developments on alumina production.
Here's what we know.
What did Alumina announce?
Alumina advised that Alcoa of Australia Limited has executed a binding term sheet agreement with FYI Resources Ltd (ASX: FYI) to "produce high-quality alumina".
Alcoa of Australia is a venture between Alcoa Corporation and Alumina.
The latter has a 40% stake in Alcoa of Australia, which represents one of the world's largest integrated bauxite mining, alumina refining and aluminium smelting operations.
Back to the agreement – Alcoa of Australia will hold a 65% interest in the project, and play a managerial role as well.
The release points to a potential construction date in 2024, of a "full scale, 8,000 metric tonne per year (high purity alumina) HPA plant", after several milestones.
Alcoa of Australia will contribute an initial $5 million over the coming year, to fund trials and facility design.
Afterwards, the company intends to build a demonstration facility, and engineer the full scale HPA plant.
Finally, stage three would signal the start of construction on the full scale plant. The build is estimated to cost around $200 million.
Alumina's announcement of the project comes after a successful trial in December 2020 that used Alcoa's feedstock to produce HPA "at more than 99.99% aluminium oxide purity".
US based Alcoa Corporation – the other 60% partner in the venture – certainly appeared to relish the news, with executive vice president, Tim Reyes, seeing the play as an easy fit.
Speaking on the announcement, Reyes said:
This project is a natural complement to Alcoa's existing business that builds on our expertise in alumina refining technology development and our production capability.
Expanding on the above Reyes added:
Alcoa and FYI have complementary skills, experience and knowledge that combined will help to accelerate our entry into the HPA market, which is expected to have a compounded annual growth rate of nearly 20 percent to 2028.
Alumina share pice snapshot
The Alumina share price has more than doubled the S&P/ASX 200 index (ASX: XJO)'s return of 25% over the past 12 months, climbing 52.5%.
It rallied another 19% in the past month, after gaining another 15.5% since January 1.
