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Altech Chemicals starts permitting for kaolin mining operation in WA

The kaolin mining operation and beneficiation plant in Western Australia will provide low cost feedstock for the company’s High Purity Alumina Project in Malaysia. A Bankable Feasibility Study has already highlighted potential to deliver high margins, strong cash flows, and rapid payback period.
Altech Chemicals starts permitting for kaolin mining operation in WA

Altech Chemicals (ASX:ATC) has commenced permitting for its proposed aluminous clay (kaolin) mining operation and beneficiation plant at Meckering, Western Australia.

This is a key component and input to Altech's High Purity Alumina (HPA) project that provides a real alternative to current Chinese and Japanese producers.

The Meckering project application has been accepted by the Department of Environment Regulation (DER), which confirmed next and final stage of permitting prior to construction is Works Approval.

In addition, Department of Mines and Petroleum approval is also underway.

A mining lease application has been submitted with a mining proposal and a mine closure plan also well advanced.

Permitting for both mining and beneficiation is relatively straightforward.

Late last month, the company completed the HPA Project Bankable Feasibility Study three months ahead of schedule.

Key metrics from the BFS included:

- Capital cost estimate US$76.9 million (A$98.6million);
- Payback period 3.8 years;
- Estimated pre-tax NPV of US$326.1 million (A$362.4 million) (at 10% discount);
- IRR of 30.3%;
- Long-term sale price forecast of US$23,000/tonne (A$25,560/tonne) for 99.99% (4N) product;
- Cost of goods sold US$8,140/tonne (A$9,050/tonne); and
- EBITDA of US$59.4 million (A$66.0 million) per annum.


The DER has confirmed its acceptance of Altech’s project application for its proposed aluminous clay (kaolin) mine and associated beneficiation plant, at Meckering.

It will also assess the company’s Works Approval application.

Notably, under DER regulations, based on the beneficiation plants processing rate of less than 50,000 tonnes per annum (tpa), the plant may only require registration post construction rather than an application for an Operating Licence.

Concurrent with DER permitting, Altech is advancing mining approvals and an access compensation arrangement for the Project.

Following grant of the mining lease, the Company will submit a Mining Proposal (MP) and a Mine Closure Plan (MCP) and upon approval of these items (and subject to funding), mining operations at Meckering will commence with overburden removal for the establishment of an open pit mine.

There are no other permitting requirements for the project.

Meckering Mining Operations

The proposed mining operation at Meckering will be conducted on a ‘campaign’ basis, once every three years.

Approximately 144,000 tonnes of kaolin will be mined each campaign, each mining campaign will last around two months and the mined kaolin will be delivered to a run of mine (ROM) stockpile, proximal to the open pit.

Stockpiled kaolin will be fed to the Meckering beneficiation plant at a rate of approximately 48,000 tonnes per annum.

Meckering Beneficiation

The beneficiation circuit will consist of a wet screening plant to remove oversize silica from the kaolin, then a dryer to reduce moisture levels of the beneficiated product.

The Meckering plant will produce approximately 18,565 tonnes of beneficiated aluminous clay per annum, with approximately 20,299 tonnes (wet) of oversize silica sand as waste, which will be returned to the mine void.

The Meckering wet screening plant and dryer will operate on a day shift, five days a week.

The final beneficiated aluminous clay product will be transported from Meckering to Fremantle, Western Australia for final shipping to Johor Bahru, Malaysia, where the company’s proposed HPA processing plant will be constructed.

In May, Simulus Engineering Pty Ltd was appointed the Engineering, Procurement, Construction and Management partner for the beneficiation plant.

Processing Plant

The proposed Malaysian HPA plant is a single train continuous processing plant, which will provide economies of scale in terms of operating costs and will position Altech as the largest producer of HPA in the world, surpassing Sumitomo Chemicals that currently states its annual HPA production capacity at 3,200 tonnes.

In optimising the design of its HPA plant, the company has specifically focused on minimising technological risk by selecting proven “off-the-shelf” plant and equipment.

Its location at Tanjung Langsat was chosen based on significant economic and developmental benefits associated with this dedicated industrial park, which includes the ready availability of hydrochloric acid, power and natural gas – all at highly competitive prices, and for its proximity to international container ports and international airports (Johor Bahru and Singapore).

HPA Market

The global HPA market was estimated at 19,040 tonnes per annum in 2014 and is expected to increase to 48,230tpa by 2018 growing at a compound annual growth rate of 28%. 

The global HPA market is rapidly growing in the artificial sapphire sector, which is used to produce Light Emitting Diode (LED) products (55%), semiconductors (22%), phosphor plasma display panels (16%) and industrial/chemical/medical applications (7%).

- HPA is experiencing increasing demand due to its growing significance in the production of today’s high-performance electronic devices;
- HPA is the key ingredient to the modern world;
- HPA’s superior qualities are pertinent features for a range of existing and new applications, for example sapphire glass for smartphones; and
- The price for the 4N HPA product is a high-value product which ranges from US$20-$50/kg.


The start of permitting for the proposed aluminous clay (kaolin) mining operation and beneficiation plant highlights the continued progress Altech Chemicals has made with its HPA project.

This is likely to be straightforward given that the Works Approval is the final stage of permitting while the plants comparatively small size will require just registration post construction rather than an application for an Operating Licence.

Besides the mining lease, mining proposal and mine closure plan, there are no other permitting requirements for the project.

The proposed HPA plant is anticipated to be in the bottom quartile of the production cost curve for the world’s HPA producers, benefitting from the use of kaolin as a cheaper feedstock than that used by other producers.

It also offers a real alternative to current Chinese and Japanese producers.

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