Alpha HPA Faces Execution Risks as It Scales Up Production and Expands Leadership

Project Construction and Engineering Progress

Alpha HPA Limited has reported robust advancement in the construction of its HPA First Project Stage 2, marking a critical phase in scaling its high purity alumina (HPA) production capabilities. The installation of a 66kVA powerline to the site has been completed, enabling the connection of transformers once civil works conclude. Engineering design has reached the 30% milestone, allowing the company to freeze layouts and progress civil design. Offsite fabrication of long-lead equipment is well underway, with tank packages awarded under budget due to strategic fabrication choices leveraging low-cost country fabrication combined with local structural, mechanical, and piping erectors.

Minor civil works progressed during the quarter, including permanent access driveway installation and stormwater drainage infrastructure. The operations readiness team is fully established, focusing on commissioning sequencing and training to enable early nitrate circuit commissioning ahead of full alumina production.

Strong Commercial Momentum in Semiconductor Sector

Alpha HPA’s marketing efforts have capitalized on surging demand in the semiconductor sector, particularly driven by AI and data center growth. The company secured Letters of Intent (LOIs) covering approximately 62% of Stage 2 production volumes, with semiconductor customers committing to up to 4,100 tonnes of HPA annually. These LOIs stem from extensive product qualification processes, reflecting Alpha’s ability to meet stringent purity standards, including the removal of radio-nuclide impurities below 1 part per billion, a critical requirement for thermal interface materials and chemical mechanical planarization (CMP) abrasives used in next-generation semiconductors.

Product sales and test orders continue to build, with over 300 orders received since the Final Investment Decision (FID) in May 2024. Notably, Alpha has developed ultra-fine nano-alumina dispersions tailored for high-value CMP applications, further strengthening its product portfolio and market positioning.

Alpha Sapphire Expansion and Alpha Polaris Concept Study

Alpha Sapphire, the company’s synthetic sapphire subsidiary, has made significant strides with multiple growth runs completed and quality improvements achieved, including reductions in internal defects and contamination. Sapphire wafering for key GaN-on-sapphire semiconductor customers is underway, with purchase orders received and wafering contracts secured. The company signed a Heads of Agreement for a Phase B sapphire growth facility in Brisbane, with feasibility engineering and cost studies ongoing.

Meanwhile, the Alpha Polaris concept study has commenced in Canada in collaboration with Orica, focusing on a streamlined product mix and site selection. This study aims to explore the deployment of Alpha’s proprietary HPA refining technology adjacent to Orica’s facility, targeting high-volume production to meet growing global demand.

Leadership Changes and Corporate Developments

Reflecting its transition into a growth phase, Alpha HPA appointed Rob Williamson as Managing Director, leveraging his expertise in major project startups and asset operations. Rimas Kairaitis transitioned to Executive Director and Chief Commercial Officer, focusing on sales, marketing, and strategic stakeholder engagement. The company is actively searching for a new Chief Operating Officer to complement the leadership team. Long-standing Executive Director Peter Nightingale retired during the quarter.

Financially, the company reported net cash outflows from operating and investing activities, consistent with its capital-intensive expansion. Cash reserves remain strong at AUD 119.9 million, supported by financing facilities including a $30 million loan from the QIC Critical Minerals and Battery Technology Fund. Related party payments totaled AUD 546,456, primarily for director fees and advisory services.