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.
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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.
