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Altech Chemicals attracts US$11M funding for Malaysian alumina project

Alumina demand is driven by the booming LED industry.
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Total equity support of US$15M from contractor

Altech Chemicals Ltd (ASX:ATC) has secured a commitment for an additional equity investment of US$11 million from German engineering firm SMS group GmbH.

This follows a US$4 million commitment from SMS last month.

SMS is the lead engineering, procurement and construction (EPC) contractor for Altech’s proposed Malaysian high purity alumina (HPA) plant.

The privately owned German engineering company builds turnkey solutions, complete with buildings, infrastructure and auxiliary equipment; SMS’ annual turnover is circa €3.3 billion.

The additional investment by SMS is subject to financial close of Altech’s targeted US$185 million project finance debt facility, which the company is aiming to achieve during the first half of 2018.

SMS group’s total committed equity support of Altech to date is US$15 million, which is a strong demonstration of its confidence in Altech and its HPA project.

Iggy Tan, managing director, commented: “The company welcomes the additional direct investment by SMS in Altech; it demonstrates the commitment and confidence of the EPC contractor to the HPA project and the company.”

Last month, Altech secured commitments to raise $17.2 million via the placement of shares at $0.14 each, to continue the development of the Malaysian HPA project.

READ NOW: Altech Chemicals raising $17.2M for high purity alumina project in Malaysia

Altech’ Malaysian plant will produce HPA directly from kaolin clay, which will be sourced from the company’s 100%-owned kaolin deposit at Meckering, Western Australia.

HPA is a critical ingredient for the production of synthetic sapphire, which is used in the manufacture of substrates for LED lights and semiconductor wafers.

Global HPA demand is expected to grow at a CAGR of 16.7% between 2016 and 2024, primarily driven by the growth in worldwide adoption of LEDs.

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