Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — Investor Presentation (October 2018)
37 slides from Altech Batteries's investor presentation, Oct 17, 2018
Slide 1: Company Presentation
Altech Chemicals Limited ASX: ATC FRA:A3Y For personal use only Company Presentation Iggy Tan Managing Director
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 US$9,000 per t US$40,000 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: Battery Energy Density
Battery Energy Density For personal use only Battery costs are reducing due to increased energy density
Slide 9: Battery Energy Density vs Temp
Battery Energy Density vs Temp For personal use only Higher Operating Temperatures Cathode changes – higher operating temperatures
Slide 10: 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 11: 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 12: Battery Separator Expansions
Battery Separator Expansions For personal use only
Slide 13: 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 14: Separator HPA Demand Forecast 2025
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 • 1.6 kg HPA (US$100) for average EV
Slide 15: Total HPA Demand Forecast
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 16: 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 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$3,000 per tonne HPA ALTECH HPA PLANT One Single Process Step Kaolin 99.99% (4N) (aluminous clay) HPA
Slide 18: Altech Kaolin Feedstock
For personal use only • Very low iron (Fe) due to weathering • 12.7Mt JORC Mineral Resources^ (250 yrs) • Measured Resources 1.5Mt @ 30% Al2O3 • Indicated Resources 3.3Mt @ 30% Al2O3 • Inferred Resources 7.9Mt @ 29.1% Al2O3 • Deposit in Western Australia Low-Impurity Bauxite Canadian Altech Kaolin F
Slide 19: Mining approval granted
For personal use only • Mining approval granted • Works approval granted • Simple free dig mining Meckering • Campaign mining, 2 months - 3 years feed Kaolin Deposit • Then just sea container loading operation in West Aust • Fremantle to Johor easy shipping
Slide 20: Chemical-zoned industrial park
For personal use only • Chemical-zoned industrial park • 60% lower operating costs • HCl plant nearby • Services, natural gas, electricity, water HPA Plant to • Access to 17th largest container port be in Johor, • 5-10 year corporate tax free Malaysia • No radioactive waste – chemical park
Slide 21: Johor HPA Plant
For personal use only Johor HPA Plant
Slide 22: Altech's HPA Process
Altech’s HPA Process For personal use only ROM Campaign Mining Sea Container To Fremantle MECKERING Shipping Sea Container Meta Kaolin Flash JOHOR Dryer 700 C Hydrochloric Acid Filter Cooler Screening Calciner Milling HCl Gas Polishing Screening Filter Filter Drum Scrubber > 0.3mm Acid Leach Stage 1
Slide 23: Established Proven Chemistry
For personal use only • Chemistry established in 1900s by Swiss • US Gov & Alcoa developed further 1980’s • No demand for HPA in 1980’s • New HPA growth demand (LEDs LIBs) Established • Altech applied open chemistry to Meckering Proven • Very successful, disruptive, lowest cost Chemistry • One paten
Slide 24: Conservative Bank Model
For personal use only • Pre-tax NPV7.5 US$ 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% 24
Slide 25: 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 • Capital cost US$ 298 million Economics • EBITDA US$ 133 million p.a. • Production Costs - US$ 10.50/kg • Sale Price - Gross
Slide 26: 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 27: 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 buyer and seller • Experienced with HPA 10 year • Strategic priority: lithium-ion batteries off-take
Slide 28: SMS group German EPC contractor
For personal use only • SMS group German EPC contractor • Lump sum turn key contract • Completion and cost risk Lump Sum • Throughput guarantee • Process & quality guarantee Turn Key • Third largest user of ECA finance Contract • Committed US$ 15 mil equity 28
Slide 29: Lab work completed
For personal use only • Lab work completed • Batch pilot plant completed • SMS 8 years of independent lab/pilot work • Conservative design assumptions Aiming to • Using 79% instead 90% Utilisation Under-promise • Using 60% instead 90% Recovery Over-deliver • Using 30% instead 34% Al2O3 feed grade •
Slide 30: Senior debt funding with KfW IPEX-Bank
For personal use only • Senior debt funding with KfW IPEX-Bank • Total senior debt of US$ 190 million Senior Debt • US$ 170 million export credit finance • 50% of plant – German suppliers Funding • Low interest, long tenure Completed • Best debt in the world
Slide 31: Three work streams
For personal use only Three work streams 1) Subordinated mezzanine debt Subject • Term sheet received of US$90 m • Stream term sheet of US$60m to Due Diligence Advancing 2) Equity work stream Final Stage • Lead - Petra Capital Raised A$21.4m Funding 3) Possible JV Partner • Partial project sell down
Slide 32: Status of Funding Initiatives
Status of Funding Initiatives For personal use only Facility Financier Amount Status Senior Loan KFW-IPEX Bank US$ 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 33: Market Capitalisation - end of month
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 $16
Slide 34: Stage construction commenced
For personal use only • A$ 21 million raised • Stage 1 construction commenced • Construction concurrent with debt finance close • Site clearance completed
Slide 35: Grand Opening Ceremony
, Altech Chemicals Sdn Bhd any GRAND OPENING 7—7 CEREMONY | 8" auc 2018 Ona r = = (ay le
Slide 36: Thank you
For personal use only Right Place Right Time Right Feedstock Right Technology Thank you
Slide 37: 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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