Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — Investor Presentation (August 2019)
59 slides from Altech Batteries's investor presentation, Aug 2, 2019
Slide 1: Company Presentation
Altech Chemicals Limited ASX: ATC FRA:A3Y For personal use only Company Presentation Iggy Tan Managing Director
Slide 2: 4,500 tpa High Purity Alumina Plant
For personal use only 4,500 tpa High Purity Alumina Plant ● Sapphire substrates ● LED growing at 16% CAGR ● Massive electricity savings
Slide 3: What is HPA?
For personal use only • Sapphire gemstone • Purified alumina (Al2O3) • 99.99% (4N) purity or greater • Smelter Grade Alumina (SGA) ~ 99.5% Bayer Process uses sodium hydroxide What is HPA? (NaOH) • Sodium impurity is a problem for sapphire and lithium-ion batteries
Slide 4: HPA purity grades and prices: our target business
For personal use only Smelter Grade High Purity High Purity High Purity High price Alumina SGA 99.5% Alumina HPA 99.9% (3N) Alumina HPA 99.99% (4N) Alumina HPA 99.999% (5N) for purity US$400 per t US$6,000 per t US$20,000 per t >US$50,000 per t US$9,000 per t US$40,000 per t Our Target Business
Slide 5: LEDs & Lithium-ion Batteries
LEDs & LITHIUM-ION BATTERIES For personal use only Sapphire Furnace (2,000o C) Sapphire Crystal Boule Sapphire Wafer LEDs Nano Powder Separator Coatings LITHIUM ION BATTERIES
Slide 6: LED Expansions
LED Expansions For personal use only Xiamen Changelight Purchases AIXTRON MOGVD Technology to Expands ROY LED Production
Slide 7: 4,500 tpa High Purity Alumina Plant
For personal use only ● Sapphire substrates ● LED growing at 16% CAGR ● Massive electricity savings
Slide 8: LEDs & Lithium-ion Batteries
LEDs & LITHIUM-ION BATTERIES For personal use only Sapphire Furnace (2,000o C) Sapphire Crystal Boule Sapphire Wafer LEDs Nano Powder Separator Coatings LITHIUM ION BATTERIES
Slide 9: Battery Energy Density
Battery Energy Density For personal use only 1000 Battery Cost (US$/kWh) (LHS) 500 Battery Energy Density (Wh/l) Battery Energy Density (Wh/l) 800 400 Battery Cost (US$/kWh) 600 300 400 200 200 100 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017e 2018e 2019e 2020e 2021e 2022e Battery costs are
Slide 10: Battery Energy Density vs Temp
Battery Energy Density vs Temp For personal use only 300 250 Specific Energy (Wh/kg) 200 150 100 Higher Operating Temperatures 50 0 LFP LMO LCO NMC NCA Cathode Evolution Cathode changes – higher operating temperatures
Slide 11: HPA Coated Separators
For personal use only Normal Polymer Separators Polypropylene (PP) 155 oC HPA <135 oC Polyethylene (PE) 135 oC required Polypropylene (PP) 155 oC for higher temps HPA layer >200 oC Polymer membrane HPA Coated Separators (HPACS)
Slide 12: W Scope Separator Sales
For personal use only 60 W Scope Separator Sales 50 51% HPA % of W-Scope Sales 40 39% 30 31% 30% 34% 35% Coated 20 Separators 10 12% 13% 0 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Japanese separator manufacturer reports 40% HPA coated separators 12% only 24 months ago
Slide 13: Capex Plans of Battery Manufacturers
Capex Plans of Battery Manufacturers For personal use only Korea - 50-70 GWh by 2020 China 32 GWh by 2023 LG Chem Korea - 20 GWh by 2020 Japan - JV with Toyota 50x capacity by 2020 China - 50 GWh by 2020 Korea - 30 GWh by 2020 Sweden - Spending US$4 B to achieve 32 GWh
Slide 14: Demand for HPA
For personal use only Demand for HPA • 30% CAGR demand growth • 272,000 tpa by 2028 Source: CRU Global HPA Outlook 2019
Slide 15: CRU Latest HPA Demand Forecast
For personal use only • CRU upgraded forecast to 272,000 tpa by 2028 • 30% CAGR demand growth 2028 • Future LED market - will require higher quality HPA • LIB separators demand 187,000 tpa by 2028 • LEDs demand forecast 85,000 tpa by 2028 CRU Latest • Significant supply deficit forecast HPA Demand F
Slide 16: Supply Deficit Analysis
For personal use only 20,000 Supply Deficit Analysis 0 -20,000 CRU warns -40,000 of significant -60,000 supply deficit 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Mid-term - Market balance Long-term - Supply gap • HPA supply deficit about 20,000 tpa by 2021 • Peaking in 202
Slide 17: Sapphire Glass Scratch Test
Sapphire Glass Scratch Test For personal use only
Slide 18: Current HPA Producers
For personal use only • HPA producers – Chemical companies China (3), Japan (2), South Africa (1) France (1) Sumitomo Chemicals (Japan) 3,020 Huantou, 800 Others (15), 3,570 Sasol (South Africa) 1,800 Current HPA Dailian Rall, 600 Producers Nippon Light Metal, 1,100 Baikowski (France) Hebei Pengda (
Slide 19: Altech's Differentiation
Altech’s Differentiation For personal use only Current HPA Producers Alumina Alumina Aluminium Refinery Smelter Dissolution Bauxite Smelter Grade Alumina Aluminium Metal 99.99% (4N) 99.5% ~US$3,000 per tonne HPA ALTECH HPA PLANT One Single Process Step Kaolin 99.99% (4N) (aluminous clay) HPA
Slide 20: Altech Kaolin Feedstock
For personal use only • Very low iron (Fe) due to weathering • 12.7Mt JORC Mineral Resources^ (250 yrs) • Measured Resources 1.5Mt @ 30% Al2O3 • Indicated Resources 3.3Mt @ 30% Al2O3 • Inferred Resources 7.9Mt @ 29.1% Al2O3 • Meckering, Western Australia (130km east of Perth) Low-Impurity Bauxite %
Slide 21: Meckering Kaolin Deposit
For personal use only • Mining approval granted • Works approval granted • Simple free dig mining Meckering • Campaign mining, 2 months - 3 years feed Kaolin Deposit • Then just sea container loading operation in West Aust • Fremantle to Johor easy shipping
Slide 22: HPA Plant to be in Johor, Malaysia
For personal use only • Chemical-zoned industrial park • 60% lower operating costs • HCl plant nearby • Services, natural gas, electricity, water HPA Plant to • Access to 17th largest container port be in Johor, • 5-10 year corporate tax free Malaysia • No radioactive waste – chemical park
Slide 23: HPA Plant Layout
HCl Plant For personal use only Leach & Neutralisation Fine Sand Kaolin Calcination Roasting & Calcination Kaolin Kaolin Beneficiation Receival HPA Finishing Plant Final Product Administration Control Room Lab TNB Substation Main Station Gatehouse Car Park Gat e
Slide 24: Altech's Patented HPA Process
Altech’s Patented HPA Process For personal use only ROM Campaign Mining Sea Container To Fremantle MECKERING Shipping Sea Container JOHOR Screening Quartz Removal Drum Scrubber Quartz Oversize
Slide 25: Altech's Patented HPA Process
Altech’s Patented HPA Process For personal use only Flash Dryer Hydrochloric Acid Filter Cooler Calciner Milling Screening 700 C Filter Acid Leach Meta Kaolin - Acid Leach Silica
Slide 26: Altech's Patented HPA Process
Altech’s Patented HPA Process For personal use only HCl Gas Stage 1 Crystalisation AlCl3 Purification Centrifuge Al Cl3 Crystals HCl Gas HCl Gas water water Centrifuge Centrifuge Al Cl3 Al Cl3 Stage 3 Polishing Stage 2 Crystalisation Filter Crystalisation HCl Wash HCl Wash
Slide 27: Altech's Patented HPA Process
Altech’s Patented HPA Process For personal use only Roasting & Final 99.99% Cooler Jet Mill Spray Product HPA Battery Grade Option Dryer Beads 1600 C Packaging Cooler Tunnel Kiln Pelletiser Feed Tank HCl Plant Quartz Oversize HCl Alpha Al2O3 1250 C 700 C Screen HX Cooler Calciner Roaster Bead Mill W
Slide 28: Altech's Patented HPA Process
Altech’s Patented HPA Process For personal use only ROM Campaign Mining Sea Container To Fremantle MECKERING Shipping Sea Container Meta Kaolin Flash JOHOR Dryer 700 C Hydrochloric Acid Filter Cooler Screening Calciner Milling HCl Gas Polishing Screening Filter Filter Drum Scrubber > 0.3mm Acid Leac
Slide 29: Established, Proven Chemistry
For personal use only • Chemistry established in 1900s by Swiss • US Govn’t & Alcoa developed further 1980’s • No demand for HPA in 1980’s • New HPA growth demand (LEDs LIBs) Established • Altech applied open chemistry to Meckering Proven • Very successful, disruptive, lowest cost Chemistry • One pa
Slide 30: Bottom quartile operating costs
For personal use only • Competitors 1. We own our feedstock 2. Main reactant HCl re-used 3. Plant in low cost country (Malaysia) Bottom Quartile Altech for Op Costs Source: Persistence Market Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2024”
Slide 31: Mitsubishi 10-year off-take
For personal use only • Off-take sales agreement with Mitsubishi • First 10 years of HPA operations • Secures sales for HPA plant production Mitsubishi • Exclusive global distributor • Experienced with HPA 10 year • Strategic priority: lithium-ion batteries off-take
Slide 32: For personal use only
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Slide 33: Lump Sum Turn Key EPC Contract
For personal use only • SMS group – German EPC contractor • Lump sum turn key contract • Completion and cost risk • Throughput guarantee Lump Sum • Process & quality guarantee Turn Key • Third largest user of ECA finance Contract • Committed US$ 15 mil equity 33
Slide 34: Aiming to Under-promise, Over-deliver
For personal use only • Lots of “fat” in design assumptions • Using 79% instead 90% Utilisation • Using 60% instead 90% Recovery Aiming to • Using 30% instead 34% head grade Under-promise • 3 Yr ramp up instead of 2 Yr Over-deliver • Possibility of 6,000 tpa 34
Slide 35: FIDS Equity Economics
For personal use only • Pre-tax NPV7.5 US$ 505 million • Internal Rate of Return (IRR) 22% • Payback (full rate) 3.9 years • EBITDA US$ 76 million p.a. Economics – • Capital cost US$ 298 million* • Production Costs - US$ 8.55 /kg FIDS Equity • LT Sale Price - US$ 26.9/kg Model • Gross Margin – 68% *
Slide 36: Grand Ceremony
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Slide 37: For personal use only
For personal use only
Slide 38: Altech Growth Performance
For personal use only $- $100.0 $30.0 $60.0 $90.0 $10.0 $20.0 $40.0 $50.0 $70.0 $80.0 • • • • • Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 No debt Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Cash - $8 m +$2m to come Feb-17 Mar-17 Apr
Slide 39: Quality Shareholders
Quality Shareholders For personal use only D Balaton/Delphi 13% Melewer Group 9% SMS Group Others 8% 67% Board & Mge 3%
Slide 40: 4,500 tpa High Purity Alumina Plant
For personal use only ● Sapphire substrates ● LED growing at 16% CAGR ● Massive electricity savings
Slide 41: Debt Funding Successful
For personal use only • Debt funding with KfW IPEX-Bank • Total debt of US$ 190 million Debt • US$ 170 million export credit finance • 50% of plant – German suppliers Funding • Low interest, long tenure Successful • Best debt in the world
Slide 42: Four work streams advancing
For personal use only Four work streams 1) Subordinated mezzanine debt • Macquarie Term sheet of US$90m Due Diligence 2) Equity work stream Advancing • Lead - Petra Capital Final Stage 3) Possible JV Partner Funding • Partial project sell down 4) German Equity Strategy 42
Slide 43: Macquarie Mezzanine Debt DD Status
For personal use only • Indicative non binding term sheet of US$90m • Technical due diligence – Worley Parson • 5 months of technical due diligence Macquarie • Positive technical report – no fatal flaws • Completed market due diligence by CRU Mezzanine Debt • Internal financial modelling done DD Sta
Slide 44: Stage 1 Construction underway
For personal use only Stage 1 & 2 Construction underway
Slide 45: Stage 1 Construction underway
For personal use only Stage 1 & 2 Construction underway
Slide 46: Stage 1 Construction underway
For personal use only Stage 1 & 2 Construction underway
Slide 47: Stage 1 Construction underway
For personal use only Stage 1 & 2 Construction underway
Slide 48: Stage 1 Construction underway
For personal use only Stage 1 & 2 Construction underway
Slide 49: Stage 1 Construction underway
For personal use only Stage 1 & 2 Construction underway
Slide 50: Global Quality Partners
Global Quality Partners For personal use only • Australian Company • Malaysian HPA plant • Kaolin mine • Major shareholder • Aust Technology • Tax incentives Australia Malaysia Germany Japan • German debt (KfW) • EPC contract (SMS) • Mitsubishi offtake • Frankfurt dual listing • Major markets
Slide 51: German Project Equity Strategy
For personal use only German Project Equity Strategy
Slide 52: Europe Battery Industry
For personal use only • Germany, France creation of a major battery industry in Europe • By 2024 capacity will be 147 GWh • Stringent 2020 EU CO2 emission Europe standards (95g/km) Battery • Push to electric vehicles (EVs) by European car manufacturers Industry • Less reliant on Asia • Volkswagen -
Slide 53: German Project Equity Strategy
For personal use only • Use of German listed company to raise project equity • Altech Advanced Materials AG (AAM) • Raise US$100m in Europe via AAM German • AAM can acquire up to 49% of project Project Equity • Altech buy-back 49% of project end of year 6 Strategy • Buy-back price at 15% pa return •
Slide 54: Benefits of German Equity Strategy
For personal use only • Access to larger pool of European institutional investors • Many can’t invest in Australian company • European investors desire for battery materials Benefits of exposure German • Enhanced project valuation • Less dilution for current Altech Equity shareholders Strategy • Pat
Slide 55: 49% Valuation
For personal use only • Altech (51%) has invested A$60m to date • 5 year development effort • 250 year mine life deposit • Intellectual property, process technology 49% • Mitsubishi 10-year off take US$100m • Established KfW US$190m senior debt Valuation • Fixed price EPC contract with SMS • Mezzani
Slide 56: Proposed JV Structure
Proposed JV Structure For personal use only Australia Altech Chemicals Limited (ASX:ATC) 29% Germany 49% 51% Altech Advanced Materials (AAM) (DAX: YB1A) Australia Altech Chemicals Australia Pty Ltd 100% 100% Australia Malaysia Altech Altech Meckering Pty Ltd Chemicals Sdn Bhd Kaolin Johor HPA Deposi
Slide 57: Conditions Precedent
For personal use only • DD to the satisfaction of both parties • Altech Board final approval • Appointment of Iggy Tan & Uwe Ahrens to YAG operating Board • YAG approving three Altech nominees Conditions to the YAG supervisory board Precedent • YAG name change to Altech Advanced Materials AG (AAM) •
Slide 58: Thank you
For personal use only Right Place Right Time Right Feedstock Right Technology Thank you
Slide 59: Forward-looking Statements
For personal use only Forward-looking Statements This announcement contains forward-looking statements which are identified by words such as ‘anticipates’, ‘forecasts’, ‘may’, ‘will’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, ‘plan’ or ‘intends’ and other similar words that involve ris
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