Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — Investor Presentation (June 2018)
36 slides from Altech Batteries's investor presentation, Jun 5, 2018
Slide 1: Company Presentation June 2018
Altech Chemicals Limited ASX: ATC FRA:A3Y For personal use only Company Presentation June 2018 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: 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 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: Light Emitting Diode
For personal use only Light Emitting Diode
Slide 8: LED Expansions
LED Expansions For personal use only Xiamen Changelight Purchases AIXTRON MOGVD Technology to Expands ROY LED Production
Slide 9: Sapphire Glass
Sapphire Glass For personal use only HTC U Ultra o February 2017 o Sapphire crystal display Smartphone sapphire screen iPhone o Sapphire crystal lens o Finger print recognition
Slide 10: Sapphire Glass Scratch Test
Sapphire Glass Scratch Test For personal use only
Slide 11: 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 Demand HPA Comsumtion tpa 65,036 55,350 34,328 39,786 46,748 for HPA 29,669 25,315 21,309 2015 2016 20
Slide 12: 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 13: Normal Polymer Separators vs 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 14: HPA Coated Separators
HPA Coated Separators (HPACS) For personal use only W Scope Sales Data Coated Non-Coated 100 90 Japanese separator 80 manufacturer reports 70 60 40% HPA coated separators Sales (%) 50 11% only 12 months ago 40 30 20 10 0 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 • HPA coated separator rapid penetration rates
Slide 15: Global Separator High Purity Alumina Demand 2015-2025
For personal use only • 1.6kg HPA for average EV car (40 KWh) • 6.4kg HPA for EV Bus (160 kWh) GLOBAL SEPARATOR HIGH PURITY ALUMINA DEMAND (2015-2025) 99.99% HPA Used in Lithium Battery Separators Altech Source: Altech Chemicals & Deutsche Bank Markets Research Industry Lithium 101 - 9 May 2016 Sepa
Slide 16: HPA Separators Demand Forecasts
HPA Separators Demand Forecasts For personal use only HPA Separators Demand Equivalent Number of Organisation Forecast 2025 (tpa) Altech HPA Plants Altech Chemicals 15,102 3.4 x Petra Capital (mid case) 37,500 8.3 x CRU 76,000 16.9 x Average 42,867 9.5 x • CRU even most bullish on separator HPA grow
Slide 17: Total HPA Demand Forecast (inc LEDs)
Total HPA Demand Forecast (inc LEDs) For personal use only Organisation Total HPA Demand Equivalent Number of Forecast (tpa) 2025 Altech Plants Persistence 62,519 14 x Petra Capital 122,000 27 x CRU Consulting 92,900 20 x Average 92,473 20 x • Ave forecast of 92k tpa by 2035 (20 times ATC plant) • N
Slide 18: 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 (Japan), 1,100 Baikowski (France) Hebei
Slide 19: 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 20: 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 21: Mining approval granted
For personal use only • Mining approval granted • Works approval granted • Simple free dig mining Meckering • Campaign mining, 2 months for 3 years of feed Kaolin Deposit • Then simple sea container loading operation • Fremantle to Johor easy shipping in West Aust
Slide 22: Chemical-zoned industrial park, Johor
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, • Environmental approval completed Malaysia • 5-10 year corporate tax free
Slide 23: Johor HPA Plant
Johor HPA Plant For personal use only Admin Site Entry Maintenance MCC Kaolin Silica Residue Beneficiation Acid Leach Warehouse Pelletising Crystallisation HCL Recycling Roasting
Slide 24: 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 25: Established, proven chemistry
For personal use only • Chemistry established in 1900s by Swiss • US Govt & Alcoa developed further 1980’s • Limited 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 • Tw
Slide 26: Managing Technical Risks
Managing Technical Risks For personal use only Lab Pilot Work Typical/Testwork Current Design Utilisation 90% 79% Recovery 90% 60% 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 27: Final Investment Decision Study
For personal use only • Pre-tax NPV7.5 US$ 505 million • Payback (full rate) 3.9 years • EBITDA US$ 76 million p.a. Final • Capital cost US$ 298 million Investment • Production Costs - US$ 9.90/kg Decision Study • LT Sale Price - US$ 26.9/kg • Gross Margin – 63% FIDS 27
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% 28
Slide 29: Competitors: Operating Cost Position
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: 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 31: 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 million equity 31
Slide 32: 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 33: Advancing Funding: Three work streams
For personal use only Three work streams 1) Subordinated mezzanine debt • Target of US$90-120m mezz debt • First term sheet received of US$90 m Advancing 2) Equity work stream Final Stage • Lead - Petra Capital Funding 3) Possible JV Partner • Partial project sell down 33
Slide 34: Altech Chemicals Limited Market Capitalisation
For personal use only Altech Chemicals Limited Market Capitalisation - end of month ($m) $100.0 $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $-‐ Altech Growth • 10 x steady market cap growth (3 years) Performance • Ave trade value $2k/day to $350k/day • 350% increase in shareholders to 2,5
Slide 35: Thank you
For personal use only Right Place Right Time Right Feedstock Right Technology Thank you
Slide 36: 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