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Altech Chemicals progresses towards goal of producing low-cost high purity alumina from kaolin

The company can produce HPA at around a third of the price of traditional producers who use aluminium metal feedstock.

Altech Chemicals Ltd - Altech Chemicals is progressing towards its goal of producing low-cost high purity alumina from kaolin
HPA separators can stop lithium batteries from overheating

Altech Chemicals (ASX:ATC) (FRA:A3Y) has big plans to be the lowest cost producer of high purity alumina (HPA), managing director Iggy Tan told the audience at the RIU Explorers Conference in Fremantle last week

He said: “Typically, the companies producing HPA are chemical companies, Altech’s point of difference is that it’s a mining company.”

These chemical companies have to buy aluminium metal as feedstock and break it back down to alumina which Tan said cost extra time and money.

He said: “This doesn’t make sense, because that aluminium metal started as alumina from bauxite.

“We can go straight from the ore to the alumina in one single step, but we don’t start with bauxite, we start with kaolin.”

Malaysian operational advantages

The company is building a 4,500 tonnes per annum plant in Johor, Malaysia, where it will make 99.99% (4N) HPA from feedstock at the 100%-owned kaolin deposit at Meckering, Western Australia.

Altech picked Malaysia for processing because of the access to infrastructure and ports and recently received approval from the Malaysian government for no corporate profit tax on business income until year 10 of operations.

Tan said the company was at the low end of the cost curve.

He said: “We’re about a third of half the cost.

“We’re so cheap because we don’t use aluminum metal, we have alumina in the ground for free, we recycle all our acid in production and we’re in a low-cost country like Malaysia so that really gives us all the advantages.”

Because the company doesn’t produce aluminium metal it has a 46% less carbon dioxide footprint for one tonne of HPA and costs 41% less energy to make one tonne of HPA than chemical companies.

Driving business growth

About 30,000 tonnes of HPA are used every year and this is expected to climb to 270,000 tonnes by 2028.

Tan said this was being driven by lithium batteries due to the ability of HPA separators to prevent batteries excessively overheating.

He said: “If you want a car to run 400 kilometres before you need to recharge it, you need to pack in more energy density within a fixed volume in the batteries.

“The negative consequence is that batteries are getting hotter and hotter."

The touching of the positive and negative terminals is what has caused lithium batteries to catch alight in the past.

Tan said: “What you might not know is that in between the positive and negative terminals are plastic separators which allow the lithium ions to go back and forth and prevent the positive and negative terminals from touching.

“The separators can handle up to 135 degrees but when you put HPA in them they can handle up to 300 degrees.

“For battery safety, this is becoming critical.”

Offtake and JV options

The company has a 10-year offtake deal in place with Mitsubishi which Tan said was useful for chemicals going into Japan which normally went through trading houses.

He said: “Mitsubishi will buy our product and then sell it to their customers.

“The benefit of that is that we don’t have to set up distribution infrastructure.”

The next step for Altech is funding, in particular raising $100 million in equity.

Tan said: “We’re accessing a German listed shell and we’ve given the shell the option to acquire 49% of the project.

“If the shell is able to raise $100 million it becomes a 49% joint venture partner.”

Altech has all the permitting in place, has completed stage one of the HPA plant construction and is progressing with stage two of construction.

Quick facts: Altech Chemicals Ltd

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ASX:ATC
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Market Cap: $41.99 m
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