Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — Investor Presentation (April 2019)
56 slides from Altech Batteries's investor presentation, Apr 15, 2019
Slide 1: Company Presentation
Altech Chemicals Limited ASX: ATC FRA:A3Y For personal use only Company Presentation Iggy Tan Managing Director
Slide 2: Company values quote
For personal use only “We believe in building happy work places, being innovative, challenging the status quo and producing advanced materials for our future”
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 batteries
Slide 4: Alumina 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$27,000 per t >US$50,000 per t US$9,000 per t US$40,000 per t Our Target Business
Slide 5: LEDs & Lithium-Ion Batteries
LEDs & LITHIUM-ION BATTERIES For personal use only Sapphire Furnace (2,000 oC) Sapphire Crystal Boule Sapphire Wafer LEDs Nano Powder Separator Coatings LITHIUM ION BATTERIES
Slide 6: LED Expansions
LED Expansions For personal use only Xiamen Changelight Purchases AIXTRON MOGVD Technology to Expands ROY LED Production
Slide 7: Sapphire substrates and LED growth
For personal use only ● Sapphire substrates ● LED growing at 16% CAGR ● Massive electricity savings
Slide 8: LEDs & Lithium-Ion Batteries
LEDs & LITHIUM-ION BATTERIES For personal use only Sapphire Furnace (2,000 oC) Sapphire Crystal Boule Sapphire Wafer LEDs Nano Powder Separator Coatings LITHIUM ION BATTERIES
Slide 9: Battery Energy Density and cost
Battery Energy Density For personal use only 1000 Battery Cost (US$/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: 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 15: HPA Separators Demand Forecast 2025
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 16: For personal use only
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Slide 17: 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 • No incumbent expansions announced • New entrants 4-5 years
Slide 18: Sapphire Glass Scratch Test
Sapphire Glass Scratch Test For personal use only
Slide 19: 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 20: 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 21: Kaolin feedstock and JORC resources
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 22: Meckering kaolin deposit mining
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 23: HPA plant location 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 24: For personal use only
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Slide 25: Johor biofuel hub
gENAI- DESARU HIGHWAY JOHOR BIOFUEL HUB INTRODUCING A NEW DIMENSION TO MALAYSIA'S ECONOMIC DEVELOPMENT JOHOR RIVER | RESIDENTIAL AREA STRAITS OF JOHOR (ED) RECREATIONAL AREA / FOREST RESERVE (FRY GOLF COURSE ME Hr waviuan road WME RWLWAY LIne
Slide 26: 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 27: 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 28: Altech's Patented HPA Process
Altech’s Patented HPA Process For personal use only Kaolin Receival & Storage
Slide 29: 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 30: Altech's Patented HPA Process
Altech’s Patented HPA Process For personal use only
Slide 31: 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 32: Altech's Patented HPA Process
Altech’s Patented HPA Process For personal use only
Slide 33: 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 34: Altech's Patented HPA Process
Altech’s Patented HPA Process For personal use only
Slide 35: 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 36: 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 • One paten
Slide 37: 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$298 m
Slide 38: Bottom quartile operating costs
For personal use only • Competitors 1. We own our feedstock 2. Main reactant HCl re-used 3. Plant in low cost country (Malaysia) Bottom Quartile Altech for Op Costs Source: Persistence Market Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2024”
Slide 39: Off-take agreement with Mitsubishi
For personal use only • Off-take sales agreement with Mitsubishi • First 10 years of HPA operations • Secures sales for HPA plant production Mitsubishi • Exclusive global distributor • Experienced with HPA 10 year • Strategic priority: lithium-ion batteries off-take
Slide 40: For personal use only
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Slide 41: SMS group EPC lump sum turn key contract
For personal use only • SMS group German EPC contractor • Lump sum turn key contract • Completion and cost risk • Throughput guarantee Lump Sum • Process & quality guarantee Turn Key • Third largest user of ECA finance Contract • Committed US$ 15 mil equity 41
Slide 42: Conservative design assumptions
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 42
Slide 43: Sapphire substrates and LED growth
For personal use only ● Sapphire substrates ● LED growing at 16% CAGR ● Massive electricity savings
Slide 44: 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 45: Mezzanine debt progress
For personal use only • US$90m mezzanine debt facility • Exclusive mandate with Macquarie Bank Mezzanine • Technical due diligence completed • Initiated a HPA market review with CRU Debt • Legal due diligence in progress Progress • Internal financial modelling • Inter-creditor discussions soon *indi
Slide 46: Project equity work streams
For personal use only Project equity work streams 1) Parent company equity raising • Lead - Petra Capital Project 2) Possible JV Partner • Partial project sell down up to 50% Equity Work • CIMB Malaysia mandated Streams • Other groups also mandated 46
Slide 47: For personal use only
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Slide 48: For personal use only
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Slide 49: Altech Chemicals Sdn Bhd grand ceremony
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Slide 50: For personal use only
For personal use only
Slide 51: Market capitalisation growth
Buying Opportunity For personal use only Altech Chemicals Limited Market Capitalisation - end of month ($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 $75m - 572
Slide 52: Global Quality Partners
Global Quality Partners For personal use only • Malaysian HPA plant • Australian Company • Major shareholder • Kaolin mine • Tax incentives • Aust Technology Australia Malaysia Germany Japan • German debt (KfW) • EPC contract (SMS) • Mitsubishi offtake • Frankfurt dual listing • Major markets
Slide 53: Stage 1 Construction Progressing Well
For personal use only Stage 1 Construction Progressing Well
Slide 54: Update Video: Stage 1 Construction
Update Video https://www.youtube.com/watch?v=sewJFlp6XY4 For personal use only Stage 1 Construction Progressing Well
Slide 55: Thank you
For personal use only Right Place Right Time Right Feedstock Right Technology Thank you
Slide 56: 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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