Altech looks to innovative “green bonds” to finance HPA project
Altech Chemicals has been given an official “green” classification for its Malaysian high purity alumina project from an independent research centre, opening the door to the “green bond market” that was valued at nearly USD$250b last year. Green bonds are an environmentally conscious financing instrument used by investors who are looking to invest in environmentally sustainable projects.
The “green grading” provides punters with an increased level of certainty that a project is indeed environmentally friendly.
Whilst Altech has already managed to secure a sizeable chunk of low interest debt out of Germany, the green rating opens Altech up to a whole new category of investor.
Managing Director of Altech, Iggy Tan said: “the second opinion report formalises the view that Altech’s single step HPA process is an energy efficient green process – a real game changer in terms of environmentally friendly, energy efficient and consequently lower cost production of high purity alumina.”
Altech is hurtling towards production of HPA at its plant in Malaysia that will be fed with almost pure kaolin clays from its Meckering deposit in Western Australia where the company says it has upwards of 230 year’s worth of supply.
HPA itself has a variety of uses in high-tech applications such as LED lighting, advanced mobile phones and it is used as a separator in lithium-ion batteries.
Altech’s green bond framework report was submitted to the Centre of International Climate and Environmental Research, or “CICERO” based in Norway. CICERO issued a formal ‘light green’ shading for Altech’s project and assessed its governance score as ‘good’.
It also declared the company’s green bond principles to be “in line with its own”.
CICERO’s green bond second opinions are graded dark green, medium green or light green and the shading broadly reflects a qualitative analysis of a project or company’s climate and environmental risks and ambitions.
The governance assessment, a complimentary but separate assessment, ranks a governance processes as fair, good or excellent based on various factors such as policies, management of proceeds and reporting.
CICERO said: “Altech’s process includes recycling processes and does not create substantial amounts of solid or liquid waste that would go to landfill or tailing points. In addition, nearly 100% of the hydrochloric acid used in its chemical process is recycled and reused in the process plant.”
The Perth-based company said that its second opinion report was instigated by Frankfurt stock exchange listed Altech Advanced Materials of which Altech holds a near 30 per cent stake.
Advanced Materials holds an option to plough USD$100m into Altech’s Malaysian HPA project and the company said it will now seek to take up that option given the project’s new found green investment credentials.
The Initiative for Climate Bonds is a not for profit global company working solely to get the USD$100 trillion bond market moving for climate change solutions. It said that France ranks third behind the USA and China, bringing a staggering USD$30.1b to the green bond market in 2019.
Interestingly, German state-owned development bank, KfW, that has already committed loan funds to the project was the second largest green bond issuer in 2019, issuing USD$9b worth of green bonds.
So called “green” investing is a curious yet burgeoning market sector that attracts a particular type of investor.
Given that Altech’s HPA product will likely be used in non-fossil fuelled electric cars and also in the manufacture of LED lights that have saved the planet from billions of tonnes of carbon dioxide emissions, it would seem that Altech just might be the belle of that ball.
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