AMMG releases update on High Purity Alumina (HPA) Market

Highlights

• Global HPA market estimated at 19,040tpa in 2014 with increase to 48,230tpa anticipated by 2018
• Market growth forecast at a CAGR of approximately 28%
• Asia Pacific region HPA market share 70%
• Asia Pacific potential location for AMMG’s HPA plant – best geographic position to service the large growing market
• AMMG will focus production towards 4N (99.99%) HPA product due to bulk of sales and demand
• As a new potential suppler, AMMG aims to meet the forecast HPA deficit as well as providing buyers with increased choice and flexibility

Australia Minerals and Mining Group Limited (ASX : AKA) (AMMG/the Company) is pleased to provide an update on the high purity alumina (HPA) market.

HPA – NON-MTALLURGICAL MARKET

Alumina or aluminium oxide, commonly known as Al2O3 is primarily used as a feedstock for the fabrication of meatallic aluminium. Ninety percent of alumina known as “smelter grade alumina” (SGA) is used in alluminium metal production with the remaining 10 percent dedicated to the non-metallurgical market for specialty or chemical use. HPA, which characterizes alumina with a minimum purity of 99.99%, is the high-end product of the non-metallurgical alumina market.

HPA QUALITY

On the basis of purity, the global HPA market can be divided into the following products :

? 4N category – 99.9% pure, with an impurity level of only 0.01% (100ppm)
? 5N category – 99.999% pure, with an impurity level of only 0.001% (10ppm)
? 6N category – 99.9999% pure, with the impurity level of only 0.0001% (1ppm)

AAMG believes that the majority of global HPA sales and demand is at the 4N category and is therefore aiming to produce this product.

HPA MARKET SIZE AND FORECAST

According to Technavio Research, the global HPA was estimated at 19,040tpa in 2014 and is expected to increase to 48,230tpa by 2018, growing at a CAGR of 28%.

The market is expected to witness significant growth during the forecast period because of rising demand from end-users and a positive outlook for the global economy. QY Research estimates the demand for HPA in 2014 to be 24,550tpa and growing to 36,000tpa in 2017. Their growth rate prediction is around 16% over this period.

GEOGRAPHIC SEGMENTATION

The demand for HPA is dominated in the Asia Pacific (APEC) region with a share of 70% in 2013 which is where is the electronic manufacturing centres are located. The Americas accounted for share of 14%, which is expected to increase to 18% during the forecast period. Europe, Middle East and Africa region accounts for 16% of the global HPA consumption.

The current majority of HPA producers are also based in the Asia Pacific region. China was the largest global supplier of HPA accounting for a share of 49% in 2013 followed by Japan with a market share of 21%. The Europe, Middle East and Africa (EMEA) region accounted for a share of 16% with small regional vendors catering to the demand.

AMMG believes most of the future demand will continue to be driven by the APEC region and the Company’s strategy of having an “ore to HPA” production facility in this region is a distinct geographical advantage for supplying HPA.