Orica and Alpha to expand strategic partnership with equity stake and north American growth MoU

14 Nov 2022

Orica (ORI: ASX) today announced the expansion of its strategic relationship with Alpha HPA Limited (‘Alpha HPA’) (A4N: ASX), including acquiring a 5% equity interest and establishing a non-binding Memorandum of Understanding (‘MoU’) to investigate the feasibility of establishing a new high-purity aluminium manufacturing facility in North America. 

Commenting on its deepening partnership and equity investment in Alpha HPA, Orica Managing Director and Chief Executive Officer Sanjeev Gandhi said: 

“Building on our successful partnership with Alpha HPA in Australia, we are thrilled to further expand our relationship and explore opportunities for growth and circularity in North America. The Alpha HPA First project in Queensland has demonstrated how industrial partnerships can optimise resource use, simultaneously creating value and reducing waste.” 

“Orica’s strategic investment in Alpha HPA reinforces our desire to grow our exposure in future-facing industries, including eMobility, while leveraging our strong global manufacturing asset base and supporting the broader transition to a lower-carbon future, together.” 

Commenting on the Company’s expanding relationship with Orica, Managing Director, Rimas Kairaitis said: 

“We are delighted to now be taking our partnership with Orica to the next level.  Having established a strong working relationship in developing our HPA First Project, the mutual ambition to expand our relationship into North America and establish Orica as a strategic shareholder in our Company is a welcome progression of our relationship.  Importantly, we see these initiatives as a strong endorsement of the ongoing development of our business.   

“Orica has a detailed understanding of our process technology, the advanced nature of our marketing activities, and a strong appreciation of our commitment to building a sustainable business to help decarbonise critical future-facing industries.  We welcome Orica as a new shareholder in our Company and look forward to taking this exciting next step in our development together.” 

Strategic Equity Placement 

Orica and Alpha HPA have executed a Subscription Agreement whereby Orica will acquire a 5% equity interest in Alpha HPA.  

The funds will be used to accelerate final engineering and product marketing for the full-scale HPA First Project at Gladstone, and to advance feasibility studies on the potential of an additional HPA manufacturing facility in North America, with the remaining funds used for general working capital.   

Under the Subscription Agreement, Orica will subscribe for 44,982,980 ordinary shares at $0.44 per share to raise ~$19.8M.        

North American Memorandum of Understanding (MoU) 

In addition, Orica has signed a non-binding Memorandum of Understanding (‘MoU’) with Alpha HPA to mutually investigate the technical and commercial feasibility of establishing a new manufacturing facility in North America to produce high-purity aluminium products for the rapidly expanding future-facing industries in the region.  

The facility would seek to leverage and replicate the chemical process synergies that have been successfully established between Orica and Alpha HPA in the development of the HPA First Project at Gladstone, Queensland. This would include the supply of process reagents and the offtake of process by-products to/from Alpha HPA’s and Orica’s manufacturing facility, supporting circularity between the two parties. 

The rationale for exploring an operational footprint in North America for Alpha HPA is to provide a local production source to supply and capitalise on the rapidly expanding manufacturing capacity across future-facing industries in the region, including the lithium-ion battery sector, and re-shoring of supply chains into the semiconductor sector. Both sectors are key markets for Alpha HPA’s high-purity aluminium products, and both are being stimulated by key legislative initiatives including the US Inflation Reduction Act and the US CHIPS Act.  

Orica and Alpha HPA will initially focus on the technical and commercial feasibility through 2023 of a new manufacturing facility to produce high-purity aluminium products near Orica’s Carseland manufacturing centre in Alberta, Canada.  

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Andrew Valler

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