Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — Shareholder Meeting (November 2016)
38 slides from Altech Batteries's shareholder meeting presentation, Nov 11, 2016
Slide 1: Annual General Meeting
Altech Chemicals Limited (ASX:ATC) For personal use only Annual General Meeting Iggy Tan Managing Director
Slide 2: Our Vision
For personal use only To be a world leading producer of high purity alumina (HPA) Our Vision
Slide 3: Sapphire & Ruby
For personal use only • Sapphire & Ruby • Natural form of high purity alumina (HPA) Sapphire • Formed by mother nature like diamonds • Colour from impurities Gemstone • Nearly as hard as diamond (Moh 9)
Slide 4: What is HPA?
For personal use only • Purified alumina (Al2O3) • Greater than 99.99% (4N) purity • Smelter Grade Alumina (SGA) ~ 99.5% (5,000 ppm impurities mainly sodium) • Bayer Process uses sodium hydroxide What is HPA? (NaOH) • Sodium impurity is problem for electronics industry
Slide 5: Our Target Business
For personal use only Smelter Grade Alumina High Purity Alumina High Purity Alumina High Purity Alumina High Price SGA 99.5% $400 per t HPA 99.9% (3N) $6,000 per t HPA 99.99% (4N) $23,000 per t HPA 99.999% (5N) $50,000 per t for Purity Our Target Business
Slide 6: Sapphire Production
Sapphire Production For personal use only HPA Furnance Sapphire crystal boule
Slide 7: Sapphire Wafer Production
Sapphire Wafer Production For personal use only Sapphire wafer Sapphire glass screen
Slide 8: LEDs lights of the future
LEDs lights of the future For personal use only Conventional LEDs New LED products
Slide 9: Uses of HPA
For personal use only High Purity Alumina Applications Semi Phosphor LEDs Other Based conductors Applications Applications Uses of HPA Phosphor 99.99% 4N Smartphone and Others 10% 12% Lithium batteries are new markets Semiconductors 21% LED 57% Source: Persistence Research “High Purity Alumina Marke
Slide 10: Demand for HPA
For personal use only • Global HPA demand 25,315tpa in 2016 1 • Expected to increase to 86,831tpa by 2024 1 • Growing at a CAGR of 17% Demand • Driven by LED growth & Lithium batteries for HPA • Entering a fast growing market Source: Persistence Research “High Purity Alumina Market – Global Industry
Slide 11: Global High Purity Alumina Forecast
For personal use only Global High Purity Alumina Forecast 2015 -2014 Source: Persistence Research “High Purity Alumina Market – Global 86,831 Industry Analysis and Forecast 2016-2014 75,637 Demand HPA Comsumtion tpa 65,036 55,350 39,786 46,748 for HPA 34,328 29,669 25,315 21,309 2015 2016 2017 2018
Slide 12: Lithium Battery Separator
Lithium Battery Separator For personal use only Anode Sheet Separator Cathode Sheet
Slide 13: HPA Separator Forecast
HPA Separator Forecast For personal use only GLOBAL SEPARATOR HIGH PURITY ALUMINA DEMAND 99.99% HPA Used in Lithium Battery Separators 15,102 Source: Altech Chemicals & Deutsche Bank Markets Research Industry Lithium 101 - 9 May 2016 13,848 HPA Comsumtion in Li-Ion Battery Industry, tpa 11,589 Numbe
Slide 14: Geographic Demand for HPA
For personal use only • 70% of HPA demand - Asia Pacific region (APEC) • Region for the world’s manufacturing • Altech’s HPA plant (Malaysia) well-positioned HPA to service APEC region • Transport, customer service, technical Geographic credibility Americas Demand 14% Europe, Middle East, Africa 16%
Slide 15: Current HPA Producers
For personal use only • Six largest HPA producers • 3 Chinese, 1 Japanese, 1 Sth African, 1 French Sumitomo Chemical , 3,020 Huantou, 800 Others (15), 3,570 Sasol, 1,800 Current HPA Dailian Rall, 600 Producers Nippon Light Metal, 1,100 Baikowski, 1,200 Hebei Pengda, 3,000 Xuancheng Jing Rui, Zibo Xi
Slide 16: Altech's Differentiation
Altech’s Differentiation For personal use only Current HPA Producers Alumina Alumina Aluminium Refinery Smelter Dissolution Bauxite Smelter Grade Alumina 99.8% Aluminium Metal 99.99% HPA US$3,000 per tonne ALTECH HPA PLANT One Single Process Step Aluminous Clay 99.99% HPA
Slide 17: Low-impurity Aluminous Clay Feedstock
For personal use only • Processed by mother nature • Very low Iron (Fe) due to weathering • Silica is non reactive – easily removed Bauxite Canadian Altech Low-impurity Darling HPA HPA Range * Project Project Aluminous Clay Al2O3 (%) 34.5 22.77 30.5 Feedstock SiO2 (%) 21.5 53.29 56.3 Fe2O3 (%) 21.2
Slide 18: Meckering Kaolin Deposit
For personal use only • Altech owns 100% of deposit in W Aust • Low environmental impact • 12 Mt JORC Resource Meckering • > 250 year mine life Kaolin Deposit • 130kms from Fremantle Port • Mining lease granted
Slide 19: Altech's HPA Process
For personal use only • Use a standard HCl leach process • Developed in 1980’s by alumina industry • Couldn’t compete with Bayer SGA costs • But great at producing HPA (no sodium Altech’s ions) HPA • However little demand of HPA in 1980s Process • Demand of HPA is here today
Slide 20: Business Strategy
For personal use only New HPA Demand + Established Process + Great Deposit + Experienced People Shareholder Value Experienced People High Purity Altech New Demand Deposit Business (Electronics) Strategy Established HPA HCl Process “the last piece of the puzzle is in place”
Slide 21: Development Program To Date
For personal use only • Started work in early 2011 • Many studies and testwork programs • No issues about producing 99.99% HPA • Supporting lab pilot plant test work Development • Off the shelf plant and equipment Program • Bankable Feasibility Study completed To Date
Slide 22: HPA Site Location Johor
For personal use only • Lower quartile costs • Kaolin feedstock shipped from WA • Chemical industrial park • Sea container ports HPA Site • Site secured Location • Malaysian government incentives Johor
Slide 23: Altech's HPA Plant - Malaysia
Altech’s HPA Plant - Malaysia For personal use only Crystallisation Plant Residue Plant Acid Leach Calcination Final Product Kaolin Calcination Kaolin Plant Sea container unloading Security
Slide 24: Bankable Feasibility Study
For personal use only • Capital cost estimate US$78.7m • Payback period 3.7 years • Pre-tax NPV9 of US$357.5m • Highly attractive IRR of 33.3% Highly • Operating cost of US$9,070/t Attractive • Sale price of US$23,000/t BFS • Margin of US$13,930/t • EBITDA US$55.7m pa Last updated March 2016 24
Slide 25: Bottom Quartile for Op Costs
For personal use only • Breakaway - competitors US$14-17,000 /t 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 Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2014
Slide 26: Off take sales with Mitsubishi
For personal use only • Off take sales with Mitsubishi • First ten years of HPA operations • Secures sales for 100% of 4,000tpa HPA production Mitsubishi • Exclusive global distributor signs full • Experienced with HPA off take • Strategic priority – Lithium batteries Contract Forecast Contracted Co
Slide 27: Debt funding with KfW IPEX Bank
For personal use only • Debt funding with KfW IPEX Bank • 60% of plant – German suppliers • Target of US$70m We are at the • Export Credit cover of $60m • Target sole lender – KFW IPEX Bank funding • M+W Group as general contractor stage
Slide 28: Project Update
Altech Chemicals Limited (ASX:ATC) For personal use only Project Update
Slide 29: Meckering Development
For personal use only • Mining lease granted • Option to purchase from landowner • Grade control drilling completed Meckering • Mineral resource of 12 Mt established • > 250 years mine life Development • Maiden ore reserve of 1.2 Mt • 30 year mine plan completed
Slide 30: Meckering Development
For personal use only • Mining proposal about to be submitted • EPC contractor awarded • Mining contractor awarded Meckering • Mining contract being drafted Development • Shipping & transport contractor awarded
Slide 31: Johor Development
For personal use only • Site secured with deposit • Opened Malaysian subsidiary office • Awarded transport & shipping contractor • WKL appointed to commence permitting Johor • Site soil drilling & survey completed Development • Utilities application commenced • Supply contracts underway • Final site
Slide 32: Detailed Design M+W Group
For personal use only • Detailed design in full force • About 50 engineers in Germany and Singapore • Major equipment packages out for final pricing • Kilns and HCL – preliminary eng Detailed • Major pipe routing completed Design M+W • 3D model of plant finished • Site layout completed Group • Archi
Slide 33: Altech's HPA Plant - Malaysia
Altech’s HPA Plant - Malaysia For personal use only Proposed HPA plant office
Slide 34: HPA Market Update
For personal use only • HPA used in lithium battery separators • Fire retardant separators – Samsung • Strong growth in large format batteries • Altech targeting 50% sales in Japan HPA • Japan price of 4N HPA – US$30,000 /t Market • ATC BFS long term price used – US$23,000/t Update • NPV would be US
Slide 35: Debt Funding Increased
For personal use only • Debt target increased to US$70m • Export credit finance increased to US$60m • Long tenure, low interest rate Debt Funding • Single bank financing (KFW IPEX) • Indicative term sheet Increased • Positive pre-assessment ECA
Slide 36: Due Diligence Update
For personal use only • Independent DD consultants appointed • Technical, legal and market consultants • Thorough DD including site visits • Review of lab pilot plant operation Due • Preliminary DD report – No fatal flaws • KFW DD meeting with Mitsubishi (Tokyo) Diligence • Preparation of DD documen
Slide 37: Timeframe to market
For personal use only • Debt funding term sheet Q1 2017 • Project equity Q2 2017 • Site works commencing Q2 2017 Timeframe to • 18 months construction market • First product due early 2019
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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