A Scoping Study on Alluminous, our 50%-owned high purity alumina (HPA) technology company, has come back with strongly positive numbers, and we wanted to walk you through what it means.

The study looked at four ways to build a commercial HPA plant, in Perth and in the Houston area of the US. All four showed positive returns, but our preferred pathway is Case 4: a staged US facility starting at 2,000 tonnes per annum and growing to 4,000 tonnes as product qualification, sales contracts and funding allow. Modelled on a 100% project basis, this case shows a post-tax NPV of A$518 million (US$362 million), an IRR of 42.3%, and a payback of about 3.8 years. The US location is materially cheaper to build and run than Perth, and fits with the US push to build local critical-materials supply.

It's worth being clear about what this is and isn't. This is an early-stage, order-of-magnitude study with an accuracy range of +50%/-30%, not a feasibility study, and it's not a basis for an investment decision. Significant work remains, including pilot testing, product qualification, offtake agreements, site selection, permitting and funding, before any decision to build. The figures are for 100% of the project, not our 50% share, and assume full equity funding with no debt, so further capital will be needed and its terms aren't yet known.

We see this as validating the case for the A$1.1 million we paid for our stake, and the further A$1.75 million we've invested since. Alongside our Lake Hope project, it broadens the range of HPA markets and customers we can reach.

If you have questions about this announcement, we'd encourage you to send them through the question box on this page.