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Altech Chemicals Ltd has 250-year kaolin resource at Meckering

Iggy Tan, MD, commented: “Altech can now progress to the next stage in preparation for mine development, the submission of what will be a relatively straightforward mining proposal and mine closure plan."

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Altech Chemicals Ltd (ASX:ATC) has updated its kaolin resource following recently completed grade control drilling on its 100% owned high purity alumina (HPA) project in Meckering, Western Australia.

The updated Mineral Resource measures 11 million tonnes of kaolin clay containing 45% minus 45 micron clay with a brightness of 82.7%.

This resource will feed the proposed HPA plant in Malaysia for over 250 years.

Iggy Tan, managing director, commented: “Altech can now progress to the next stage in preparation for mine development, the submission of what will be a relatively straightforward mining proposal and mine closure plan.

“Upon approval of these items, the site at Meckering will be ready for the development of the campaign mining and
container loading operation to supply feedstock for Altech’s proposed Malaysian HPA plant.”


Background

Altech is aiming to become one of the world's leading suppliers of 99.99% HPA.

HPA is a high-value, high margin and highly demanded product as it is the critical ingredient required for the production of artificial sapphire.

Artificial sapphire is used in the manufacture of substrates for LED lights, semiconductor wafers used in the electronics industry and scratch-resistant artificial sapphire glass. Sapphire glass is used in models of the Apple watch.

There is no substitute for HPA in the manufacture of artificial sapphire.

Altech was recently granted its mining lease at Meckering, where it is planning to mine 120,000 tonnes of kaolin every three years on a campaign basis, each mining campaign will last two months.

The resultant raw kaolin will be stockpiled, then containerised into standard shipping containers at the rate of around 40,000 tonnes per annum and transported to Johor, Malaysia for processing into HPA at the company’s proposed plant.


HPA and lithium-ion batteries

The major application of HPA in lithium-ion batteries is as a coating on the ceramic separator sheet that divides the cathode and anode electrodes within the battery.

American automotive company Tesla recently announced the 2018 launch of its U.S. lithium-ion battery manufacturing facility, the Gigafactory.

By 2020, the Gigafactory will reportedly reach full capacity and produce more lithium-ion batteries annually than were produced worldwide in 2013.


Analysis

The resource upgrade allows Altech to progress to the next stage of mine development, submission of the mining proposal and mine closure plan.

It progresses the production timeline at Meckering, which in turn will help Altech in its bid to secure project financing for the development of the HPA plant in Malaysia.

Achieving project financing for the proposed Malaysian HPA plant remains a key catalyst for Altech.

The share price has been trading strongly, up 85% over the past 3 months, currently trading at $0.16.

Altech maintains broker support with a valuation of $0.41 per share.

HPA demand for lithium-ion battery manufacturing is forecast to increase at 30% per year to 2025 as forecast by Deutsche Bank.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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