Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — RIU Explorers Conference (February 2016)
37 slides from Altech Batteries's conference presentation, Feb 24, 2016
Slide 1: Meeting a Sapphire Future
Altech Chemicals Limited (ASX:ATC) For personal use only RIU Explorers Conference Company Presentation “Meeting a Sapphire Future” Iggy Tan Managing Director
Slide 2: For personal use only
For personal use only
Slide 3: Our Vision
For personal use only To be a world leading producer of high purity alumina (HPA) Our Vision
Slide 4: Fast-emerging use of HPA
For personal use only • Fast-emerging use of HPA • HPA use in separators @ 120g per kWh • Discharge rates, self-discharge, life-cycles Emerging • Separator shrinkage temp and flammability HPA growth • China only forecast HPA demand 3,936tpa by 2020 ATC in lithium • That’s our 4,000 tpa Malaysian pla
Slide 5: 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 6: 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 7: Sapphire Glass Production
Sapphire Glass Production For personal use only
Slide 8: 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 9: Welcome to the World of HPA
Welcome to the World of HPA For personal use only Sodium Lamps Hybrid Cars Display Screens Abrasives Ceramic Ultrafiltration Electronic Substrates Tools Special Ceramics Semiconductors HP Refractory Polishing Cosmetics Medical Abrasives Separation Headlights Membranes LED Lighting Optical Lenses Ind
Slide 10: Uses of HPA
For personal use only High Purity Alumina Applications Semi Phosphor LEDs Other Based conductors Applications Applications Uses of HPA 99.99% 4N Smartphone and Others Phosphor Lithium batteries 7% 16% are new markets Semiconductors 22% LED 55% Source: Technavio Research “2014-2018 Global High-purity
Slide 11: Light Emitting Diodes (LEDs)
Light Emitting Diodes (LEDs) For personal use only
Slide 12: Global HPA Demand
For personal use only • Global HPA demand 19,040tpa in 2014 • Expected to increase to 48,230tpa by 2018 • Growing at a CAGR of 25% Demand • Driven by LED growth for HPA Source: Technavio Research
Slide 13: HPA Demand & Growth Forecast
For personal use only HPA Demand & Growth Forecast 60.0 50.0 48.2 39.9 40.0 30.0 25.3 32.4 Demand 20.0 14.1 19.0 for HPA 10.0 0.0 2013 2014 2015 2016 2017 2018 Volume ktpa Source: Technavio Research “2014-2018 Global High-purity Alumina Market” Global shipments of LED lamps forecast to increase from
Slide 14: Smartphones with Sapphire Crystal Screen
For personal use only • High end Vertu TI with sapphire crystal screen • Rest will follow Smartphones Sapphire Crystal Screen
Slide 15: Sapphire Glass: Apple Watch & iPhone
For personal use only sapphire glass apple watch & iphone 7
Slide 16: Sapphire Glass Scratch Test
Sapphire Glass Scratch Test For personal use only
Slide 17: HPA Demand from Smartphones
For personal use only • Estimate 30g1 of HPA in phone screen • 500 million smartphones sold per year • If all sapphire glass technology HPA o Extra 15,000tpa of HPA Demand from o 4 x our proposed 4,000tpa plant • There will be a HPA supply deficit Smartphones 1 Altech Estimates
Slide 18: More Sapphire Display Factories
For personal use only More Sapphire Display Factories
Slide 19: HPA Geographic Demand
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 20: 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 21: 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 22: 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 23: Aluminous Clay Deposit
For personal use only • Altech owns 100% of deposit in W Aust • Low environmental impact • Previously mined for kaolin – trial pit Meckering • Low stripping ratio Aluminous Clay • 65Mt JORC Resource Deposit • 130kms from Fremantle Port
Slide 24: 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 25: Altech 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 26: 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 27: Altech's HPA Plant - Malaysia
Altech’s HPA Plant - Malaysia For personal use only
Slide 28: HPA Site Location
For personal use only • Tanjung Langsat Industrial Park, Johor Bahru (Malaysia) • Kaolin feedstock shipped from WA • Operating costs ~40% lower than HPA Site Australia Location • Capital costs expected to be 50-60% lower • Site secured
Slide 29: Malaysian HPA Operation
Malaysian HPA Operation For personal use only HPA LOCATION • Hydrochloric acid, lime, power & natural gas • International container sea-port & Singapore • Investment incentives
Slide 30: Highly Attractive BFS
For personal use only • Capital cost estimate US$76.9 m • Payback period 3.8 years • Pre-tax NPV10 of US$326 m • Highly attractive IRR of 30.3% Highly • Operating cost of US$8,200/t Attractive • Sale price of $23,000/t BFS • Margin of US$14,800/t • Operating profit of US$59.4m pa
Slide 31: Recent DJ Carmichael Valuation
For personal use only Base case valuation Mcap $302m Base case valuation ($/sh) $0.81 * Project risk discount 50% Target price ($/sh) $0.41 * Recent DJ * Price is fully diluted for capital structure post construction Carmichael Valuation “generating sustainable gross operating margins of between 60-
Slide 32: Bottom Quartile for Operating Costs
For personal use only • Breakway - competitors US$14-17,000 /t • Bottom quartile for operating costs 1. We own our feedstock Bottom 2. Large scale economy 4,000 tpa – one train Quartile 3. Main reactant HCl re-used for Op Costs 4. Minimal impurity removal costs 5. Plant in low cost country (Malaysia
Slide 33: Mitsubishi as Partner
For personal use only • Mitsubishi as Sales partner in Japan • Japan 21% of HPA market • All sales to Japan Mitsubishi • Mitsubishi largest general trading company • Operates in 90 countries as Partner • First of the off take process
Slide 34: We Are at the Funding Stage
For personal use only • Mandate signed with KfW IPEX Bank • US$40m Export Credit cover • Senior debt at US$20m We are at the • Approx 58% of capex German suppliers • M+W Group as general contractor funding • Due diligence and detailed design stage
Slide 35: HPA: the next new age materials boom
For personal use only “HPA will be part of the next “new age materials boom” like rare earths, lithium and graphite” Iggy Tan
Slide 36: Right Place, Right Time
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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