Hill End Gold reports that marketing discussions reveal high purity alumina’s (HPA) use in lithium batteries and synthetic sapphire for high‐technology is growing rapidly, creating the ideal environment for Hill End’s Yendon HPA project:

• Discussions with manufacturers of lithium battery separators highlight the huge increases they are making in their production capacity
• Some are in the process of increasing their production by ten times current levels
• Discussions also reveal that around 70% of the new capacity involves making separators which are coated with high‐purity alumina, more than double the current percentage
• The combination of these two factors is expected to result in additional demand for HPA equal to many times the 8,000 t/y which Hill End aims to produce at its Yendon HPA project in Victoria, Australia
• HPA demand also set to rise sharply on the back of its role in the production of synthetic sapphire, which has a rapidly growing number of high‐technology applications
• Strong consumer interest in Hill End’s planned development of a commercial‐scale demonstration plant to enable it to tailor its products to meet customer requirements.

Company representatives attended the China International Optoelectronics Expo in Shenzhen and the North American Battery Show in Detroit. They also held meetings in China and the US with battery separator manufacturers and synthetic sapphire growers. The key conclusions drawn from these conferences and meetings were as follows.

Lithium battery separator manufacturers are investing heavily in new production capacity. This will see them increase production by five to 10 times their current levels. The timing of the increases will be staged over the next five years in line with each company’s expectation of the growth in the electric vehicle market.

Compounding the HPA demand growth rate from new battery separator production capacity will be the fact that 70% of the new capacity is being set up to be coated with HPA. This compares with less than 30% today and will be driven by the improved safety and performance offered by the technology.

Of particular importance for Hill End is that this increase in separator production, combined with the higher percentage which will be HPA‐coated, will result in new HPA demand which is many times the planned 8,000 t/y of HPA that will be produced at the Yendon HPA project. By way of example, one Chinese battery separator plant under construction, which was visited by HEG representatives, will
require 16,000 t/y of HPA.

Hill End is now in the process of negotiating a ‘Technical Assistance’ agreement with one of China’s largest separator manufacturers. Having a close technical relationship with such a firm will provide significant benefits for streamlining the process of understanding the issues important for their processes and the marketing of Hill End’s HPA product.

Lithium batteries for home and grid scale energy storage systems are becoming increasingly important to manage the variable generation capacities of renewable energy systems further driving demand for HPA coated separators.

Separator manufacturers showed strong interest in Hill End’s Yendon HPA project, with it receiving requests from three manufacturers for samples to undertake initial testing to determine how Yendon’s product would work in their process.

A key issue for the separator market is the physical properties of the HPA. Hill End will be undertaking the test work to produce a product that meets the physical requirements and envision being in a position to supply test samples early next year.

Demand for synthetic sapphire is still growing strongly on the back of the LED market. Demand from the optical industries is also increasing significantly for laser lenses and scientific equipment.

A potential new area of growth for the sapphire market is in ‘Time of Flight’ (ToF) applications. This technology provides very accurate 3D imaging by measuring the time taken for light to travel from a sensor to an object and back. The use of light for this technology is relatively new, but is being taken up very quickly in a number of areas like LiDAR applications, Gesture applications and Face recognition technology.

Hill End’s strategy of developing a demonstration plant was very much welcomed in the discussions. As the process path hasn’t been proven at a commercial scale, HPA buyers see significant value in showing the project is scalable and to have commercial volumes available to the market.

Hill End Managing Director Martin McFarlane said that it was clear that the additional HPA produced by Yendon would be needed to meet the growing demand from the lithium battery and sapphire markets.

“The extremely strong response we have received from HPA customers confirms our view that Yendon has an outstanding future based on its wordclass resource and demand for the end product,” he said.

Hill End is assessing options for substituting the planned pilot plant with a larger commercial-scale demonstration plant. Under the scenario being assessed, the demonstration scale plant would produce a commercial volume of HPA up to 1,000 t/y. This option could deliver several key benefits for both the DFS and Hill End’s profitability. These would include:

• Such a plant would provide all the benefits of a pilot plant in respect to process optimisation and proof of scalability up to 8,000 t/y of HPA
• Capex of such a demonstration plant is yet to be determined, but is expected to be a small fraction of the $270 million identified in the 8,000 t/y Yendon HPA project PFS
• Production at this scale could start in a relatively short time frame, potentially years ahead of the 2022 commissioning schedule outlined for the 8,000 t/y HPA plant in the Yendon PFS
• The plant would continue to operate once the study phase was completed, generating ongoing revenue from HPA sales
• The plant would produce marketable quantities of HPA. These would be used to meet the HPA customer supplier accreditation processes and generate small scale offtake contracts, which would translate to large contracts when the full scale HPA operation is commissioned
• Having established HPA production through the demonstration plant, secure markets for the product, cash flow and strong customer relationships would in turn assist with obtaining funding for the 8,000 t/y HPA project. In addition, learnings from the construction and operation of the plant could reveal capital cost savings for the full‐sized plant.

Hill End emphasises that this option needs to be fully assessed to determine the capital and operating costs to ensure it is financially feasible. The funding alternatives for such a plant also need to be determined.

It is envisaged that upon completion of the study phase, a demonstration scale plant would continue to operate as a small commercial plant.

The picture shows a 20-in Sapphire boule to be cut and polished for space research lens