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Altech Chemicals Ltd signs 20 year lease at plant site in Malaysia

Published: 10:00 25 Nov 2016 AEDT

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Altech plans to feed the plant with raw kaolin.

Altech Chemicals Ltd (ASX:ATC) has executed a 20-year lease agreement, which includes a 20-year renewal option over the site for the proposed high purity alumina plant (HPA) in Johor, Malaysia.

A lease signing ceremony was held earlier in the week to mark the significant milestone.

The site is 4 hectares in size and is within a section of an industrial complex specifically reserved for chemical facilities.

A key advantage of the site is its proximity to hydrochloric acid, lime and limestone plants – all required consumables for the company’s proposed HPA plant.

Altech plans to feed the plant with raw kaolin mined and shipped from the company’s 100% owned Meckering kaolin deposit located in Western Australia.


Iggy Tan, managing director, commented

“Johor is currently the preferred destination for business investment in Malaysia.

“Costs of business in Johor are estimated at 30% less than in Kuala Lumpur and 60% less than in Singapore.

“With three ports; low cost and established power, gas, road, telecommunications and other business infrastructure and its proximity to Singapore, Johor is the ideal site for Altech’s downstream high value-add HPA processing plant. 

“We firmly believe that the benefits of locating our HPA plant in Johor will enable Altech to position itself in the lowest quartile of the world’s HPA producers. This is important when you are competing in a global market.”


HPA global demand market

Altech recently commissioned a market research report for global high purity alumina (HPA) demand to support project debt funding for the proposed plant in Malaysia.

The report noted that global HPA demand grew 19.5% in 2015 compared with 2014 and demand is forecast to remain strong, growing at 16.7% annually through to 2024.

Overall, the market research report on the global HPA demand is supportive of Altech’s ambitions to construct a plant in Malaysia.

It confirms the low-cost/high purity of the acid-leach processing that Altech has adopted for its Malaysian HPA plant.

The report also confirms the continued strong bargaining power of HPA producers and the low level threat of substitute products for HPA.

Given the report’s findings around the economic viability of the proposed plant, this should act as a valuable tool throughout the project financing process.

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