High purity alumina firm Alpha HPA raises $225m, including NRF support
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The news: High purity alumina producer Alpha HPA has launched a $225 million institutional placement to support construction and commercialisation of its operations, including a $75 million pre-commitment from the National Reconstruction Fund Corporation (NRF).
Undisclosed pre-commitments have also been received from major Alpha HPA shareholders AustralianSuper and Orica.
The numbers: Alpha HPA will issue 300 million new shares at 75 cents each, an 11.2% discount to the last close price of 84.5 cents on 28 January.
The NRF’s $75 million commitment represents a pro-former shareholding of 6.9%.
A share purchase plan will also allow eligible shareholders to apply for up to $30,000 of new shares at the lower of the placement price or a 2% discount to the five-day volume weighted average price.
The context: High-purity alumina is a critical mineral used in the manufacture of semiconductors, pharmaceuticals and lithium-ion batteries.
Of the new funds raised, $210 million will go towards construction and commercialisation of HPA First Project Stage 2 while $5 million will go towards upgrading capacity at HPA First Project Stage 1. Construction of the Stage 2 facility in Gladstone is expected to be completed in late 2027 or early 2028.
The remaining $10 million will go towards “general corporate purposes including the cost of the offer”.
When including previous government support and a previous institutional placement, Alpha HPA had raised $590 million for Stage Two. However, "refreshed economic model and re-baselining of the project" since a detailed feasibility study in 2024 resulted in a 26% increase in expected total capital expenditure.
Alpha HPA has already received about $497 million worth of government support including loans from the Northern Australia Infrastructure Facility and Export Finance Australia, QIC royalty critical minerals fund investment and grants from the Queensland and federal governments.
The company has entered a trading halt so that the institutional placement can take place.
JP Morgan Securities Australia, Macquarie Capital and Bell Potter Securities are acting as joint lead managers, bookrunners and underwriters to the placement.
The share purchase plan has a record date of 28 January. It will open on 6 February and close on 20 February.
What they said: “We are pleased to welcome NRFC as a cornerstone investor – their investment is a strong endorsement of the Company’s strategic importance as the largest single site manufacturer of HPA globally,” Alpha HPA managing director Rob Williamson said.
“We look forward to continuing Stage 2 project execution, and moving closer to establishing Australia’s first, sovereign, large scale, commercial capability to manufacture high purity aluminas and related products to support technology growth sectors driving the global energy transition.”
NRFC chief executive David Gall said: “Alpha’s unique IP makes lower temperature processing possible. Coupled with the project’s use of 100% renewable electricity this means it produces around 70% less emissions than current methods of producing HPA.”
“The NRFC is delighted to be supporting an Australian company that is commercialising breakthrough IP to create products the world and Australia will increasingly need," Gall said.
The sources: ASX, NRF media release
