Altech Chemicals said it is continuing research at the Fraunhofer Institute for Ceramic Technologies and Systems, or “IKTS”, in Dresden, Germany, on high purity alumina battery applications with a focus on lithium-ion battery separator technologies and the impact of alumina impurities on battery safety.
The internationally renowned Fraunhofer-Gesellschaft research organisation is specifically assessing the contamination that impurities from lower quality alumina, sub “4N”, may have on the battery electrolyte. The impurities are a cause of lithium battery thermal runaway, efficiency and life-cycle reduction, according to Altech whose HPA product should meet the higher standard 4N threshold.
Altech said that Fraunhofer-Gesellschaft is the largest research organisation in Europe and conducts research under industry contracts via 72 other institutes and facilities who collaborate under the umbrella of Fraunhofer-Gesellschaft’s 2.6 billion Euro annual budget.
As an independent, German-based institute, IKTS’ HPA test work will be well regarded by German and other European participants in the lithium-ion battery chain and the electric mobility sector. Altech will be looking to use this research to target customers for its ultra-pure HPA product, once the Malaysian plant is up and running.
Altech also said this week that construction at its Malaysian HPA plant had been suspended due to the imposition of a COVID-19 ‘movement control order’ by Malaysian authorities. Management said that the balance of stage two construction work at the electrical sub-station for its HPA plant was nearing completion, prior to the shutdown order.
Altech’s Malaysian HPA project that will draw its kaolin clay feedstock from Meckering in WA and will be capable of producing an alumina product that can achieve 99.99 per cent purity, according to Altech. The company said it has over 230 years of kaolin supply at Meckering, potentially making it an intergenerational business proposition for the European battery market.
The company said this week that none of the finance arrangements have been impacted by the current coronavirus situation. Altech has already secured senior project debt finance of US $190 million from the German Government-owned KfW IPEX-Bank. It also has Macquarie Bank working on additional mezzanine finance.
The Iggy Tan led company appears to have done a remarkable job so far in putting the finance jigsaw puzzle together after independently raising approximately A$39 million over the last two years to cover the initiation of construction at the Malaysian plant site. The company is continuing to work on the remaining finance puzzle pieces, including a rights issue in Europe.
Back in July 2019 Altech announced the sale of an option to Frankfurt Stock Exchange-listed Youbisheng Green Paper AG, since renamed Altech Advanced Materials AG, or “AAM”, whereby AAM can acquire up to a 49% interest in Altech’s HPA project for USD100 million. AAM has commenced the process of securing the funds to enable it to exercise its option, which once complete is anticipated would be a catalyst for project financial close.
Altech said this week that it has been advised by AAM that it remains on track for prospectus approval from the German Federal Financial Supervisory Authority by mid-April 2020. The rights-issue will commence upon receiving prospectus approval; however, timing may be altered in light of the prevailing COVID-19 situation.
AAM continues to work with the Swiss international Investment Bank that is appointed as placement agent in relation to the issuance of equity or other equity instruments (securities) by AAM via private placement, which remains scheduled to follow the AAM rights offer.
Altech also has a number of other initiatives in play through the current uncertain times, including the European promotion of its HPA project via its alternate director, Uwe Ahrens who is based in Germany. AAM has also appointed the Centre of International Climate and Environmental Research, associated with the University of Oslo, to complete an independent determination of the green credentials of Altech’s HPA project.
Management said that the work in Oslo is important for positioning the project in a more stable, future global economy and in broadening access to financial and equity markets, in particular “green” funds and lenders.
If Altech’s projection of an average annual free cash number at the project of US$76m a year allowing for sustaining capital and before debt servicing and tax is real, then it will be well positioned to handle a serious debt load, alleviating the need to give too much of the project away in equity.
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