Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — RIU Fremantle (February 2019)
40 slides from Altech Batteries's conference presentation, Feb 21, 2019
Slide 1: Company Presentation
Altech Chemicals Limited ASX: ATC FRA:A3Y For personal use only Company Presentation Iggy Tan Managing Director
Slide 2: 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 batteries
Slide 3: 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 US$9,000 per t US$40,000 per t Our Target Business
Slide 4: LEDs & Lithium-Ion Batteries
LEDs & LITHIUM-ION BATTERIES For personal use only Sapphire Furnace (2,000 oC) Sapphire Crystal Boule Sapphire Wafer LEDs Nano Powder Separator Coatings LITHIUM ION BATTERIES
Slide 5: LED Expansions
LED Expansions For personal use only Xiamen Changelight Purchases AIXTRON MOGVD Technology to Expands ROY LED Production
Slide 6: LEDs & Lithium-Ion Batteries
LEDs & LITHIUM-ION BATTERIES For personal use only Sapphire Furnace (2,000 oC) Sapphire Crystal Boule Sapphire Wafer LEDs Nano Powder Separator Coatings LITHIUM ION BATTERIES
Slide 7: Battery Energy Density
Battery Energy Density For personal use only 1000 Battery Cost (US$/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 8: 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 9: 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 10: Sales of HPA Coated Separators
For personal use only W Scope Sales Data % Sales of HPA coated separators 50 HPA 45 40 39 40 35 34 35 30 31 30 Coated Sales (%) 25 20 15 12 13 Separators 10 5 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 11: Capex Plans of Battery Manufacturers
Capex Plans of Battery Manufacturers For personal use only
Slide 12: 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 13: HPA Separators Demand Forecast
For personal use only HPA Separators Demand Equivalent Number of Organisation Forecast 2025 (tpa) Altech HPA Plants Altech Chemicals 15,102 3.4 x Other Petra Capital 37,500 8.3 x Separator CRU Consulting 76,000 16.9 x Forecast Average 42,867 9.5 x 2018 • 1.6 kg HPA (US$100) for average EV car (40 KW
Slide 14: Total HPA Demand Forecast
For personal use only Organisation Total HPA Demand Equivalent Number of Forecast (tpa) 2025 Altech Plants Persistence 62,519 14 x Total HPA Petra Capital 122,000 27 x Forecast CRU Consulting 92,900 20 x (inc LEDs) Average 92,473 20 x 2018 • Ave forecast of 92 k tpa by 2025 (20 times ATC plant) • No
Slide 15: Sapphire Glass Scratch Test
Sapphire Glass Scratch Test For personal use only
Slide 16: 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 17: 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 18: 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 • Deposit in Western Australia Bauxite Low-impurity Altech % Darling Kaolin * Kaolin Feedstock Range* Al2O3 34.5 30.0 SiO2 21.5 57.9 Fe2O3 21.2 0.4 TiO2 2.00
Slide 19: 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 20: 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 21: Johor HPA Plant
For personal use only Johor HPA Plant
Slide 22: 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 23: 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 24: 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 25: 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 26: 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 27: Established, 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 28: 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% • Capex US$298 m
Slide 29: Bottom Quartile for Operating Costs
For personal use only • Competitors 1. We own our feedstock 2. Main reactant HCl re-used 3. Plant in low cost country (Malaysia) Bottom Quartile Altech for Op Costs Source: Persistence Market Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2024”
Slide 30: 10 Year Off-take with Mitsubishi
For personal use only • Off-take sales agreement with Mitsubishi • First 10 years of HPA operations • Secures sales for HPA plant production Mitsubishi • Exclusive global distributor • Experienced with HPA 10 year • Strategic priority: lithium-ion batteries off-take
Slide 31: Lump Sum Turn Key EPC Contract
For personal use only • SMS group German EPC contractor • Lump sum turn key contract • Completion and cost risk • Throughput guarantee Lump Sum • Process & quality guarantee Turn Key • Third largest user of ECA finance Contract • Committed US$ 15 mil equity 31
Slide 32: 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 32
Slide 33: 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 34: Funding: Three Work Streams
For personal use only Three work streams 1) Subordinated mezzanine debt • Term sheet received of US$90m Proceeding to internal 2) Equity work stream approval Advancing • Lead - Petra Capital Various parties Final Stage 3) Possible JV Partner in dataroom Funding • Partial project sell down 34
Slide 35: Altech Growth Performance
For personal use only Altech Chemicals Limited Market Capitalisation - end of month ($m) $100.0 $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 Altech $30.0 $20.0 Growth $10.0 $- Performance • 900% steady market cap growth (4 years) • Ave trade value $2k/day to $350k/day • Mar Cap $60m - 572 m shares • Cash - $
Slide 36: Global Quality Partners
For personal use only • Australian Company • Malaysian HPA plant • Kaolin mine • Major shareholder • Aust Technology • Tax incentives Australia Malaysia Global Quality Germany Japan Partners • German debt (KfW) • Mitsubishi offtake • EPC contract (SMS) • Major markets • Frankfurt dual listing
Slide 37: Stage Construction Commences
For personal use only Stage 1 Construction Commences
Slide 38: Grand Opening Ceremony, August 2018
, Altech Chemicals Sdn Bhd v GRAND | en = ly CEREMONY 8™ AUG 2018 use On her SOT!
Slide 39: Thank you
For personal use only Right Place Right Time Right Feedstock Right Technology Thank you
Slide 40: 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