Ambitious plans to produce aluminium fluoride in Tasmania will get a $7.5 million federal boost.
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The money from the government's Modern Manufacturing Initiative program will go towards a proposed $16.4 million aluminium smelter bath recycling plant at Bell Bay.
Aluminium fluoride is vital for aluminium smelters and the Australian aluminium industry currently relies wholly on imports.
The ABx Group told the ASX it believed it would be the world's first commercial plant recycling the bath material from aluminium production into valuable chemicals.
"The plant is proposed to transform 1600 tonnes per year of aluminium smelter bath into hydrogen fluoride and other industrial chemicals," it said.
"Most of the hydrogen fluoride will be further processed to aluminium fluoride, an essential chemical for aluminium smelting, for which Australia currently imports 100 per cent of its requirements.
"A significant benefit of the project is the establishment of domestic aluminium fluoride production to protect the aluminium industry from supply chain disruption.
"This will create self-sufficiency, increasing Australia's manufacturing resilience and capability, while reducing dependence on international markets that have been increasingly subject to trade issues and shipping disruptions."
It said Alcore's longer term plan was to expand the plant by 15 times, to process all of Australia's aluminium smelter bath and supply more than 80 per cent of Australia's aluminium fluoride requirements.
"The production of aluminium fluoride from aluminium smelter bath is an exemplary illustration of the circular economy."
The company previously estimated Bell Bay production would be expected to start with about 50 jobs, potentially rising to several hundred as more modules were added.
As well as its aluminium fluoride and bauxite interests, the ABX Group is exploring for rare earth elements in Tasmania.
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