PyroGenesis Canada Inc. (TSX:PYR) has told investors it is taking advantage of new opportunities in the aluminum market as producers face increasing demand, rising energy costs, higher market prices for high-quality aluminum, and approaching carbon emissions targets.
In an update on its aluminum business line, the company noted that it has expanded its focus from the primary aluminum market as its solutions are being explored by secondary aluminum producers globally.
It said it has also increased sales efforts along with research and development, targeting innovative new uses of its ultra-high heat expertise and plasma-based solutions. All of these endeavors have reached the client-discussion stage, the company added.
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“Due to a series of macroeconomic and geopolitical factors that have intensified the already tightening market for aluminum – even now the world’s second most widely used metal after steel, and whose demand is estimated to rise by 80% over the next two decades – aluminum prices have spiked, currently up almost 40% after rising as high as 56% year-over-year in March,” the company’s CEO and chairman P. Peter Pascali said in a statement. “As the metal has become more valuable and with raw material supply chains experiencing added volatility, producers are seeking technological answers to boost their production yield, and PyroGenesis solutions, most notably our Drosrite dross recovery system, provide an in-stream benefit.”
PyroGenesis also updated investors on existing customers, as well as some of the many proposals and new-use developments underway.
Drosrite – Metal Recovery Systems
The company said its Drosrite systems, which help aluminum producers recover valuable metal from the smelting waste known as dross, are in demand, with it successfully winning some of the largest dross recovery projects internationally, making it one of the largest and fastest-growing dross recovery solutions in the world.
The first three Drosrite systems, of the seven ordered by a Middle Eastern end-user–one of the world’s largest aluminum producing complexes –continue to perform exceptionally well, the company said. As producers have entered a period of heightened pressure to maximize the output of existing operations, the output rate, quality, and purity level of its salt-free Drosrite metal recovery system has proven to be a differentiator, it added.
Additionally, with that client’s recent expansion achieved, it said the remaining four systems are completed, packed, and ready for shipping.
The order follows a $4 million purchase order for the first of three 10-ton Drosrite systems from a recurring client, with procurement for the production of the system already begun.
An additional Drosrite system was also completed and delivered to a second recurring client, making it the fourteenth system either installed/in shipping or newly ordered/requested, PyroGenesis said.
As a result, in anticipation of the construction of a new primary aluminum smelter, PyroGenesis said it is planning a full end-to-end tender of solutions, from plasma torches to Drosrite tolling services, and is already in talks with the producer about such a tender. The new smelter will be one of the largest hydroelectric-powered facilities to be built in some time, it said.
While a longer-term opportunity, it said this represents potentially one of the most exciting developments, not just for the company’s aluminum business line, but also for the company as a whole.
“This industry was tailor-made for us,” Pascali continued. “The similarity between PyroGenesis and the aluminum industry as a whole is unique and cannot be understated: few if any industries have both an intrinsic expert understanding, and a long-term need of high-powered electricity solutions, like the aluminum industry.”
PyroGenesis designs, develops, manufactures and commercializes advanced plasma processes and sustainable solutions that reduce greenhouse gases. Its technology is suited for iron ore pelletization, aluminum, waste management, and additive manufacturing.
Contact the author at stephen.gunnion@proactiveinvestors.com