Altech Chemicals Ltd (ASX: ATC) aims to become one of the world’s leading suppliers of 99.99% (4N) High Purity Alumina (HPA) through the construction and operation of a processing plant of 4,500 tonnes of HPA per year (tpa) in Johor, Malaysia.

Raw material for the plant will come from the company’s 100% -owned kaolin deposit in Meckering, Western Australia, and shipped to Malaysia.

HPA is a high-value, high-margin product that is expected to be used more and more by lithium-ion battery manufacturers, both as a coating on battery separator sheets and also as a possible nano-coating for battery life. application on battery anode materials such as graphite and silicon to improve battery performance, safety, chargeability and life.

Graphite coating with alumina

2021 has been a busy year for Altech, Managing Director Iggy Tan and his team focused on advancing the financing options for the Malaysian HPA plant offered by the company, which included promoting a bid to ‘green bonds, a direct investment at the project level of up to 49% of the project and an additional equity investment in Altech.

In September 2020, Altech announced that it had developed an innovative method for coating graphite particles, typical of those used in lithium-ion batteries, with a nano layer of alumina.

Development, testing and expansion of this technology to include coating silicon particles with alumina is underway at the company’s dedicated research and development facilities in Perth.

The facility was officially opened in July 2021 and allowed Altech to conduct a series of research, development and testing (including battery testing) to refine its coating methods and technology.

“Cracked the silicon barrier”

At the end of November 2021, Altech achieved a breakthrough in lithium-ion technology with its research and development laboratory in Perth by creating a workable graphite-silicon anode.

After nearly 12 months of hard work, Altech claims to have finally “cracked the silicon barrier” and successfully produced and tested a series of lithium-ion battery anode materials that have approximately 30% greater retention capacity. to that of conventional anode materials.

Altech successfully combined silicon particles – which had been processed with its innovative proprietary technology – with ordinary battery grade graphite to produce a lithium-ion battery electrode containing a graphite-silicon composite anode.

Investors reacted strongly, with stocks trading at AU $ 0.14 at the end of November, a 40% increase from the start of the month.

Breakthrough for the lithium-ion industry

Altech Managing Director Iggy Tan said following the production success: “This major achievement is not only a significant step forward for Altech, but also for the lithium-ion battery industry in general.

“Especially, given the 2020 public statement from US electric vehicle maker Tesla, which said its goal was to increase the amount of silicon in its batteries to achieve drastic improvements in energy density and battery life. battery life.

“A lithium-ion battery with a 30% higher energy capacity would not only translate into significant financial benefits, but also potentially increased range for electric vehicles.

“Phase 2 of Altech’s planned research and development program will see the company strive to improve the 30% energy boost and could include the assembly of a pilot plant.

“In terms of the potential commercialization of its technology, the company’s 75% -owned subsidiary, Altech Industries Germany GmbH, has already started a pre-feasibility study for the construction of a 10,000 tonne per year battery materials plant in Saxony, Germany, to serve the growing market. European lithium-ion battery market.

Altech CEO Iggy Tan told Proactive about the breakthrough:

The conservative (bank case) modeling of Altech’s HPA project cash flows shows a pre-tax net present value (NPV) of US $ 505.6 million at a discount rate of 7.5%.

The project is expected to generate annual average net available cash of approximately US $ 76 million at full production, with an attractive HPA sales margin of approximately 63%.

German engineering company SMS group GmbH (SMS) is the designated EPC contractor for the construction of the Malaysian HPA plant at Altech.

SMS provided a US $ 280 million fixed price turnkey contract and offered clear and concise guarantees to Altech for throughput and plant completion.

Altech successfully secured US $ 190 million senior debt financing from German government-owned KfW IPEX-Bank as senior lender.

In addition to senior debt, Altech is pursuing various additional financing options, including a listed green bond and the sale of a direct project stake of up to 49% in its HPA project.

HPA factory in Saxony, Germany

During the first quarter of 2021, the German subsidiary 75% owned by Altech, Altech Industries Germany

GmbH (AIG) has started a Preliminary Feasibility Study (PFS) for the construction of a High Purity Alumina (HPA) battery material coating plant in Saxony, Germany.

The PFS assumed a coating capacity of the plant of 10,000 tpa (35 tonnes per day) and the location would be in the Schwarze Pumpe industrial park in Saxony, Germany – where AIG has an option to acquire a site for ‘about 14 hectares.

The results of the PFS are expected in the coming months.

$ 14.5 million rights issue

Altech continued to receive strong support from its shareholders in 2021, as evidenced by the fully subscribed capital increase that was carried out in January 2021.

The company raised $ 14.5 million thanks to the offer subscribed by major shareholders of Altech, Deutsche Balaton / Delphi and the Melewar group.

HPA use

The use of HPA in the manufacture of lithium-ion batteries is expected to increase rapidly, alongside the use of batteries in electric vehicles and an ever-increasing number of consumer goods applications.

Lithium-ion battery manufacturers are already using HPA as a coating for the polymer anode / cathode separator sheets inside the battery to reduce separator shrinkage and the resulting likelihood of battery combustion.

HPA is also an essential ingredient required for the production of synthetic sapphire.

Synthetic sapphire is used in the manufacture of substrates for LED lamps, semiconductor wafers used in the electronics industry, and scratch-resistant sapphire crystal used for wristwatch dials, optical windows and smartphone components .

It should be noted that there is no substitute for HPA in the manufacture of synthetic sapphire.

HPA request

HPA is a high-priced material (sold between US $ 15-50 per kg) with a forecast for significant annual growth in demand driven primarily by two fast-growing industries: the booming lithium-ion battery industry. ; and the sapphire / LED industry.

The use of 4N HPA in lithium-ion battery production continues to evolve, driven by the development of more energy-dense batteries to serve the growing electric vehicle (EV) and renewable energy storage markets.

Altech has created its own dedicated research and development laboratory, which allows the company to refine its material coating technology and conduct a range of lithium-ion battery test work.