Published On: March 16th, 2022
Altech Chemicals Ltd. aims to be one of the world’s leading specialists and manufacturers of 99.99% (4N) high purity alumina (HPA). Altech is based in Perth, Western Australia, under the leadership of CEO Ignatius (Iggy) Tan. The company recently finalised Stage 1 and Stage 2 construction of its HPA plant in Johor, Malaysia. In addition, The company continues to pursue innovative research to enhance its patented downstream alumina coating technology which can revolutionise the performance of lithium-ion batteries and extend their life.
Altech Chemicals’ Project
Altech Chemicals has been working to position itself as a pioneer in high purity alumina. HPA is a high-margin and highly sought-after component around the world. It is a leading ingredient in the production of artificial scratch-proof sapphire glass used to develop high-performance electronics, such as LEDs, semiconductors, and phosphor display screens.
Today, top purity alumina is also used in state-of-the-art electric cars, smartphones, and optical windows. HPA alumina can also directly be used in lithium-ion batteries as a coating on the polymer separator sheets that are found between the battery anode and cathode. This not only increases battery performance but also improves durability and overall safety. In 2018, the global demand for HPA was approximated at 19,000tpa, which was forecasted to present an annual growth rate (CAGR) of 30% during the period 2018-28.
Altech Chemicals is known for its patented coating technology that allows them to nano-coat particles of graphite and silicon with a layer of high purity alumina. Graphite anodes are typically used in Li-ion batteries. However, these batteries lose around 8-10% of lithium ions during the very first battery charge-discharge cycle, called the “first cycle capacity loss”. Not to mention, these losses augment with each subsequent battery usage cycle.
HPA coated silicon anodes: A pioneering discovery
Silicon (Si) is a very promising material for Li-battery anodes and has a significant advantage over graphite as it theoretically has ten times the energy capacity compared to graphite. Unfortunately, the Si particles expand to nearly 300% when charged, leading to particle fracture and subsequent separation of the anode from the copper collector.
In 2021, Altech Chemicals announced a ground-breaking discovery in its testing lab in Perth, Western Australia, where they had developed a lithium-ion battery that contains a composite graphite-silicon anode. They achieved this by treating silicon particles with high purity alumina and combining it with standard battery-grade graphite. This technology may well be a game-changer in the Li-ion battery market, as it can improve a battery’s energy density, lifespan and reduce first cycle lithium loss.
Impact of HPA coating on first cycle capacity loss
When asked about this innovative industry change, Iggy Tan, the CEO stated, “We have finally cracked the silicon code and have successfully produced lithium-ion batteries with 30% higher energy density…and this is significant for the lithium battery market and the potential electric vehicle market.”
This statement is fortified by Elon Musk’s (Tesla) announcement in 2020 that a critical step in reducing the cost and enhancing the energy density and life of Li-ion batteries is to implement more silicon in the battery anodes. From an end-user point of view, higher levels of Si in electric vehicle batteries can increase the distance travelled on a single charge.
Impact of silicon on the distance travelled by EV
Altech’s anode composite materials plant: Saxony, DE
Altech Chemicals filed a patent with IP Australia in 2021 for its anode coating technology process which involves top purity alumina. The Company has also placed the final touches on its pilot plant design in Schwarze Pumpe Industrial Park, Saxony, where its 75% owned subsidiary Altech Industries Germany GmbH (AIG), will be producing a high-end battery-grade anode material coated with HPA chemical processing technology.
The Company announced that the pilot plant will be installed in the Schwarze Pumpe Dock 3 facility, neighbouring AIG’s 14Ha industrial site at the Park. The plant design is proposed to develop 10,000 tonnes per annum of anode grade graphite, using Altech’s alumina coating technology, which is the subject of a preliminary feasibility study (PFS).
The study received a green project status and will be using 100% renewable power, sourced from the local grid with minor on-site solar generation. The proposed plant design has also attained a Medium Green rating from the Centre of International Climate and Environmental Research (CICERO), Norway. This qualifies the plant for potential financing through green bonds.
Furthermore, plans are afoot for the construction of an on-site laboratory that will enable swift changes to ensure product purity and allow adjustments in processing technology parameters when required. This also offers scope for the development of additional materials coating capacity in the future.
Altech’s Malaysian HPA plant
The Company is working to close the balance of project finance for this collaborative project, which involves:
- The 4,500tpa HPA plant at Johor, Malaysia
- Altech’s 100%-owned kaolin mine at Meckering, WA, which supplies feedstock for the Malaysia plant
The HPA production process involves a non-pressurised HCl technique. The processing technology reduces operating costs in the production of ultra-high purity alumina, which can, in turn, lower the high purity alumina price.
Altech’s Project Funding
Driving its global expansion, Altech raised its chief funding by securing ECA funding from German government-owned KfW-IPEX bank in 2017, to approve a USD 190 million project debt facility.
The Company also has an EPC contract with SMS Group, a private German metals processing company. Offering input on the EPC acquisition in 2018, CEO Iggy Tan said, “A lot of European and German investors do not have the mandate to invest in Australian companies. They love the HPA project, and this way they can invest in the German entity-a separate listed German vehicle and get exposure to the high purity alumina market”.
The SMS Group has completed stage-1 and stage-2 construction at the Malaysian HPA plant site, funded by Altech’s balance sheet. The group has also guaranteed plant performance following preset product quality and volume specifications. SMS holds a total USD 15 million equity position in Altech. Over the years, Altech Chemicals has also secured a total of USD 40.9 M through three rounds of private funding placements from 2017 to 2021.
Further strengthening their position, Altech’s ten-year off-take sales arrangement with Mitsubishi Australia Ltd (Mitsubishi) in 2016, covers the first 10-years of HPA production from the plant. The table below summarises the proposed source and application of funds for the project:
Proposed project source and application of funds
Altech Chemicals CEO: Iggy Tan
CEO Iggy Tan took the reins at Altech Chemicals in 2014 and has since overseen leadership and management at the company. He has a 30-year background as a mining and chemical executive with several inspiring achievements in commercial mining projects under his belt. These achievements include capital raising, funding, construction, start-ups, and operations.
Considered a trailblazer in the Australian lithium industry, he is admired for spearheading Altech‘s growth by establishing a global company with footprints in Australia and Asia, with a sales and marketing presence in key market areas.
He holds a Master of Business Administration from the University of Southern Cross and is a graduate of the Australian Institute of Company Directors. And with a strong record in accomplishing private equity sourcing, he is responsible for leading seven resource projects in Australia and overseas. Mr Tan emphasises building a team of professionals, finalising plant design, and securing the necessary funding before commencing any project.
Altech Chemicals Stock and Financials
Altech Chemicals saw a steep rise in its stock price in November and December 2021. The current market cap of the ASX-listed company stands at $132.17M, with a closing stock price of $0.095. However, the company has shown a 52-week average of $0.041-0.150 in the market. Altech also presents a robust average share volume of 5,015,983, representing excellent liquidity.
Altech‘s latest funding in December 2021, raised $8.1M, for which funding was directed to the construction of the battery materials coating pilot plant in Germany by Altech Industries Germany, a subsidiary of Altech Chemicals.
Why should investors keep a close eye on Altech Chemicals?
Driven by an experienced and innovative team of engineers and chemists, Altech has proven to show significant growth in the future. The Company looks forward to its continued development, with the final aim being the global commercialization of its high purity alumina nano-coating technology for graphite and silicon particles. Here are a few highlights of Altech that may reel in an investor’s interest:
- It has launched and registered the product “Silumina AnodesTM“, developed based on its breakthrough HPA coating technology.
- The Company has attained the Medium Green rating from the Centre of International Climate and Environmental Research for its battery coating plant in Germany, qualifying it for future funding through green bonds.
- Altech has signed collaboration agreements with Ferroglobe, a leading silicon producer, and SGL Carbon SE (Germany), a leading graphite producer.
- It is a pioneer in a growing market for HPA with an annual CAGR of 30% from 2018 to 2028.
- The graphite demand is forecasted to peak at 600,000 tpa driven by the European giga factories. And the HPA coating material for graphite and silicon anodes will only add to the expected demand growth.
Graphite demand from European gigafactories
Altech Chemicals presents a promising portfolio that focuses on developing and enhancing HPA products that can revolutionise the global lithium industry and the electric car industry, whilst fortifying the existing HPA product market. The recent innovations and discoveries are sure to position the Company as the world’s leading supplier of high purity alumina. If interested, you may discover more about the company through their LinkedIn profile or official website.
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