Orbite Aluminae eyes the high purity and smelter grade alumina industries.

Orbite Aluminae's president and CEO describe plans to conquer part of the high purity and smelter grade alumina industries. Orbite has started construction on an expanded facility where it expects to start producing 1,000 tonnes a year of high purity alumina (HPA), along with rare earths, starting in 2013. The economics of the HPA plant, step one for Orbite in a greater quest that also involves taking on more conventional smelter grade alumina (SGA), are looking good.

"We expect margins in the 80 to 90% once in steady state production," Boudreault said.

High-purity alumina is not the stuff of kitchen pots and pans. It is used in high tech applications especially in the aerospace, automobile and electronic industries. It is not a massive market, nor is it a miniscule one. And it is growing. Boudreault said the size of HPA market is in the 100,000-tonne-per-year range and expanding by about eight to nine percent a year.

Orbite's plan is to have the Cap Chat HPA plant - An expansion of its pilot testing facility - online in early 2013 and hitting production of around 1,000 tonnes HPA per year at steady state. Within a few years of coming online Boudreault said Orbite would ramp up to several thousand tonnes HPA per year, possibly garnering it a significant portion of the world HPA market.

Orbite has estimated the cost of the initial HPA plant to be between $26 million and $30 million and given Orbite has nearly C$70 million in the bank - in cash and short term investments - Boudreault said the project is fully funded.

As far as revenue streams go, so long as Orbite's process proves workable on an industrial scale, licensing of its methods may also be lucrative. In this sense Orbite's chief asset may not be its physical facilities and resources but its intellectual properties.

Aluminum giants have taken note. In the past few months Orbite has signed memorandums of understanding (MOU) with Rusal and Nalco. Boudreault hopes the MOUs will lead to joint ventures on an SGA plant at Cap-Chat and then licensing deals that would give them the right to use Orbite's methods on their home turf.

Orbite's method has potential on two major fronts for aluminum producers. It might be used on aluminum ores owned by majors such as Rusal and Nalco and it also shows promise as a way to reprocess red mud, waste left behind after conventional processing of aluminous ores.

The potential in red muds is something Boudreault sounds most passionate about. If it works, the process could prove handy in remediating extensive stores of "extremely polluting" red mud at processing sites. To that end, early metallurgical testing shows Orbite's patented or patent-pending processes can extract alumina - and rare earths as well - left over in red mud and in so doing render the red mud more or less benign.

The potential there, if Orbite's process proves economical, could be huge. It could give aluminum producers a way to reduce their environmental footprint and mitigation costs, and even, in some cases, an added revenue stream. Boudreault said whether the process proves economic - in the sense of profit generation - depends much on the alumina grade of red muds. While some red muds contain little in the way of leftover aluminum, more typically, Boudreault said, the Bayer process leaves behind some 50-percent of aluminum. Residual grades can be in the 20-percent range, akin to Orbite's own aluminous clay deposit in the Gaspe.