ASX-listed high purity alumina player, Altech Chemicals, has received a commitment for a €7.38 million grant from the state Government of Saxony in Germany towards the potential development of a HPA plant in the east German state. It comes after the company recently signed an option agreement to purchase approximately 10 hectares of industrial land in the Schwarze Pumpe Industrial Park in the Spreetal municipality of Saxony.
ASX-listed high purity alumina player, Altech Chemicals, has received a commitment for a €7.38 million grant – or about A$12 million – from the state Government of Saxony in Germany towards the potential development of a high purity alumina, or “HPA” plant in the east German state. It comes after the Perth-based company recently signed an option agreement to purchase approximately 10 hectares of industrial land in the Schwarze Pumpe Industrial Park in the Spreetal municipality of Saxony.
Altech representatives visited the site in August, which marked the commencement of a period of due diligence that will feed into a feasibility study on the economics of building and operating a HPA plant in the region.
In a commitment letter to Altech, the Saxony Government said that synergy benefits were expected to be realised from an Altech plant against the background of the presence of electric vehicle and battery manufacturers becoming active in the region.
Altech Chemicals Managing Director, Iggy Tan said: “In essence, the grant means that if we were to determine that it was commercially viable to construct a second HPA plant in Germany, an amount of A$12.2 million would be available.”
“Altech … remains focused on delivering the close of funding for our first HPA plant in Johor, Malaysia and the recommencement of construction. However, by evaluating this opportunity in Germany we are quickly responding to Europe’s push to bring its supply chains closer to home and to increase its self-reliance for critical raw materials – such as those that are used in the manufacture of lithium-ion batteries.”
The company has developed strong ties with Germany, with a German connection on its board and share register.
It also enjoys a relationship with Germany’s massive SMS engineering group and the German Government-owned KfW IPEX-Bank, which has provided a US$190 million debt facility as the senior lender for Altech’s proposed US$280 million HPA plant at Johor Bahru in Malaysia.
Altech has also mandated Macquarie Bank as the preferred mezzanine lender for a debt facility of up to US$90 million for the Malaysian project.
Altech has raised just under A$40 million over the past 24 months to fund stages one and two of the Johor Bahru development, both of which were finished by the end of the 2019-20 financial year.
The company hopes to have the proposed Johor Bahru processing plant up and running and first product out to customers by about 2023.
The plant has a planned design throughput capacity of 4,500 tonnes per annum of HPA.
HPA is a high-value, high-margin product that is a pivotal component in the production of synthetic sapphire and increasingly in the manufacture of lithium-ion batteries.
Synthetic sapphire is used in the fabrication of LED lights, semiconductor wafers for the electronics industry and scratch-resistant sapphire glass for wristwatch faces, optical windows and smartphone components.
Lithium-ion battery manufacturers use HPA for the coating on the polymer anode/cathode separator sheets in batteries.
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