12 Impact Minerals Ltd Annual Report 2023 MARKET FORECAST FOR HPA: DEMAND AND PRICE The consensus amongst analysts and the industry is for 4N HPA and related products to command prices between US$15,000 and US$32,000 per tonne, with a median conservative price assumption of US$20,000 per tonne. These figures are borne out by ongoing sales of small quantities of HPA and precursor products reported by Alpha HPA Limited (ASX: A4N Release 24th February 2023). Although data are scarce, in-house analysis of industry performance indicates a notional cost curve with the bulk of incumbent producers at US$11,000 to US$15,000 per tonne for 4N HPA. New entrants, such as Alpha HPA Limited, who produce HPA from a chemical feedstock, and the kaolin developers are forecasting production at a disruptive cost of US$6,000 to $7,000 per tonne (Figure 9: ASX: A4N Release 7th February 2023 and 17th March 2020). A preliminary review of the economic factors affecting the development of Lake Hope indicates the Project may be cost-competitive with these new hydrometallurgical processes. Figure 9. An indicative cost curve for global HPA production. Note the disruptive nature of the cost of production for new entrants using hydrometallurgical techniques versus the incumbent processes dominated by the Bayer process. Overall annual demand for HPA is predicted to increase from 45,000 to 50,000 tonnes in 2021-22 to about 250,000 tonnes by 2030 (Figure 10). An increase in LED demand will mainly drive this growth together with lithium-ion battery uses, both underpinned by global decarbonisation and electrification initiatives. LED growth has experienced between 13% and 18% Compound Annual Growth Rate (CAGR) over the past ten years, and this is predicted to continue, driven by increased installation capacity of LED’s and increased demand for environmentally friendly lighting in domestic and commercial properties. The fastest-growing end-use demand sector in recent years has been in lithium battery separators, which grew at a CAGR of 26%, reaching 5,000 tonnes in 2018 (latest data available). Continued significant growth is predicted in this market, given the uptake of lithium battery technology. Review of Operations continued $ per kilogram
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