Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — Investor Presentation (August 2018)
38 slides from Altech Batteries's investor presentation, Aug 20, 2018
Slide 1: Company Presentation
Altech Chemicals Limited ASX: ATC FRA:A3Y For personal use only Company Presentation Iggy Tan Managing Director 20 August 2018
Slide 2: World leading producer of high purity alumina (HPA)
For personal use only World leading producer of high purity alumina (HPA) Our Vision 4,500 tonnes pa
Slide 3: Sapphire gemstone
For personal use only • Sapphire gemstone • Natural form of high purity alumina (HPA) Al2O3 • Formed by mother nature like diamonds • Colour from impurities Sapphire • Nearly as hard as diamond (Mohs 9) Gemstone
Slide 4: What is HPA?
For personal use only • Purified alumina (Al2O3) • 99.99% (4N) purity or greater • Smelter Grade Alumina (SGA) ~ 99.5% (5,000ppm impurities, mainly sodium) • Bayer Process uses sodium hydroxide What is HPA? (NaOH) • Sodium impurity is a problem for sapphire and lithium batteries
Slide 5: 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$27,000 per t US$50,000 per t Our Target Business
Slide 6: LEDs & Lithium-Ion Batteries
LEDs & LITHIUM-ION BATTERIES For personal use only Sapphire Furnace (2,000 oC) Sapphire Crystal Boule Sapphire Wafer LEDs Nano Powder Separator Coatings LITHIUM ION BATTERIES
Slide 7: LED Expansions
LED Expansions For personal use only Xiamen Changelight Purchases AIXTRON MOGVD Technology to Expands ROY LED Production
Slide 8: Sapphire Glass Scratch Test
Sapphire Glass Scratch Test For personal use only
Slide 9: Global High Purity Alumina Forecast 2016-2024
For personal use only Global High Purity Alumina Forecast 2016 -2024 Source: Persistence Market Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2024” 86,831 75,637 HPA Comsumtion tpa Demand 65,036 55,350 34,328 39,786 46,748 for HPA 29,669 25,315 21,309 2015 2016 20
Slide 10: Battery Energy Density vs Temp
Battery Energy Density vs Temp For personal use only Battery costs are reducing due to increased energy density Cathode changes increases energy density Higher Operating Consequence – higher Temperatures 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 Sales Data
For personal use only W Scope Sales Data Coated Non-Coated 100 HPA 90 80 70 60 Coated Sales (%) 50 40 30 Separators 20 10 0 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Japanese separator manufacturer reports 40% HPA coated separators 11% only 12 months ago
Slide 13: Battery Separator Expansions
Battery Separator Expansions For personal use only
Slide 14: Global Separator High Purity Alumina Demand
For personal use only • 1.6 kg HPA for average EV car (40 KWh) • 6.4 kg HPA for EV Bus (160 kWh) Altech 2016 GLOBAL SEPARATOR HIGH PURITY ALUMINA DEMAND 99.99% HPA Used in Lithium Battery Separators 15,102 Source: Altech Chemicals & Deutsche Bank Markets Research Separator Industry Lithium 101 - 9 M
Slide 15: Separator HPA Demand Forecasts
For personal use only Separator HPA Demand Equivalent Number of Organisation Forecast 2025 (tpa) Altech HPA Plants Altech Chemicals 15,102 3.4 x Other Petra Capital (mid case) 37,500 5.1 x Separator CRU Consulting 76,000 16.9 x Forecast Average 38,034 8.5 x 2018 • CRU most bullish on separator HPA g
Slide 16: Total HPA Demand Forecasts
For personal use only Organisation Total HPA Demand Equivalent Number of tpa 2025 Altech Plants Total HPA Persistence 62,519 tpa 14 x Petra Capital 122,000 tpa 27 x Forecast CRU Consulting 92,900 tpa 20 x (inc LEDs) Average 92,473 tpa 20 x 2018 • Ave forecast of 92 k tpa by 2025 (20 times ATC plant)
Slide 17: HPA producers – Chemical companies
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 18: 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$3,000 per tonne HPA ALTECH HPA PLANT One Single Process Step Kaolin 99.99% (4N) (aluminous clay) HPA
Slide 19: Altech Kaolin Feedstock
For personal use only • Very low iron (Fe) due to weathering • 12.7Mt JORC Mineral Resources^ (250 yrs) • Measured Resources 1.5Mt @ 30% Al2O3 • Indicated Resources 3.3Mt @ 30% Al2O3 • Inferred Resources 7.9Mt @ 29.1% Al2O3 • Deposit in Western Australia Low-Impurity Bauxite Canadian Altech Kaolin F
Slide 20: Mining approval granted
For personal use only • Mining approval granted • Works approval granted • Simple free dig mining Meckering • Campaign mining, 2 months - 3 years feed Kaolin Deposit • Then just sea container loading operation • Fremantle to Johor easy shipping in West Aust
Slide 21: Chemical-zoned industrial park
For personal use only • Chemical-zoned industrial park • 60% lower operating costs • HCl plant nearby • Services, natural gas, electricity, water HPA Plant to • Access to 17th largest container port be in Johor, • 5-10 year corporate tax free Malaysia • Site clearance completed
Slide 22: Johor HPA Plant
For personal use only Johor HPA Plant
Slide 23: Altech's HPA Process
Altech’s HPA Process For personal use only ROM Campaign Mining Sea Container To Fremantle MECKERING Shipping Sea Container Meta Kaolin Flash JOHOR Dryer Hydrochloric Acid Filter Cooler Screening Calciner Milling HCl Gas Polishing Screening Filter Filter Drum Scrubber 700 C > 0.3mm Quartz Oversize Ac
Slide 24: Proven Chemistry
For personal use only • Chemistry established in 1900s by Swiss • US Gov & Alcoa developed further 1980’s • No demand for HPA in 1980’s • New HPA growth demand (LEDs LIBs) Established • Altech applied open chemistry to Meckering Proven • Very successful, disruptive, lowest cost Chemistry • Two paten
Slide 25: Conservative Bank Model
For personal use only • Pre-tax NPV7.5 US$ 505 million • Internal Rate of Return (IRR) 22% • Payback (full rate) 3.9 years • EBITDA US$ 76 million p.a. Conservative • Capital cost US$ 298 million Bank • Production Costs - US$ 9.90/kg Model • LT Sale Price - US$ 26.9/kg • Gross Margin – 63% 25
Slide 26: Current Case Economics
For personal use only • Current price in Japan - US$ 40.0/kg • Pre-tax NPV7.5 US$ 1.1 billion • Internal Rate of Return (IRR) 33% Current Case • Payback (full rate) 2.2 years • EBITDA US$ 133 million p.a. Economics • Production Costs - US$ 10.50/kg • Sale Price - Gross Margin – 74% 26
Slide 27: Competitors
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 28: Off-take sales agreement with Mitsubishi
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 29: SMS group German EPC contractor
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 29
Slide 30: Managing Technical Risks
For personal use only Lab Pilot Work Typical/Testwork Current Design Managing Utilisation 90% 79% Technical Recovery 90% 60% Risks Ramp Up 2 Years 3 Years Feed Rate 34% Al2O3 30% Al2O3 Eng Design Margin +15-20% +20-30% Conservative design assumptions reduces technical risks and builds robustness
Slide 31: Debt funding with KfW IPEX-Bank
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 32: Funding work streams
For personal use only Three work streams 1) Subordinated mezzanine debt • Term sheet received of US$90 m Due • Stream term sheet of US$60m Diligence Advancing 2) Equity work stream Final Stage • Lead - Petra Capital Raised A$21.4m Funding 3) Possible JV Partner • Partial project sell down 32
Slide 33: Status of Funding Initiatives
Status of Funding Initiatives For personal use only Facility Financier Amount Status Senior Loan KFW-IPEX Bank US$ 190 million Committed Mezzanine Loan* Global Merchant Bank US$ 90 million Indicative Term sheet Stream Finance* Global Investment Group US$ 60 million Indicative Term sheet Total US$ 34
Slide 34: Altech Chemicals Limited Market Capitalisation
For personal use only Altech Chemicals Limited Market Capitalisation - end of month ($m) $110.0 $94.5 $86.6 $87.4$89.9 $90.0 $68.2$68.2$68.2$66.1$68.2 $70.0 $60.1 $47.8 $45.3 $50.0 $31.5 $40.3 $34.6$35.9$35.9$35.1 $35.8$38.8 Altech $30.6$33.0$31.9$30.6$31.9$34.6 $31.2 $15.4 $30.0 $15.0$16.8$14.2 $16
Slide 35: A$ million raised
For personal use only • A$ 21 million raised • Stage 1 construction commenced • Construction concurrent with debt finance close • Site clearance completed
Slide 36: For personal use only
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Slide 37: Thank you
For personal use only Right Place Right Time Right Feedstock Right Technology Thank you
Slide 38: 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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