Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — Investor Presentation (September 2019)
47 slides from Altech Batteries's investor presentation, Sep 30, 2019
Slide 1: Company Presentation
Altech Chemicals Limited ASX: ATC FRA:A3Y For personal use only Company Presentation Iggy Tan Managing Director
Slide 2: 4,500 tpa High Purity Alumina Plant
For personal use only 4,500 tpa High Purity Alumina Plant ● Sapphire substrates ● LED growing at 16% CAGR ● Massive electricity savings
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 downstream users
Slide 4: Alumina grades and pricing: 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$15,000 per t >US$50,000 per t US$9,000 per t US$40,000 per t Our Target Business
Slide 5: LEDs & Lithium-Ion Batteries
LEDs & LITHIUM-ION BATTERIES For personal use only Sapphire Furnace (2,000o C) Sapphire Crystal Boule Sapphire Wafer LEDs Nano Powder Separator Coatings LITHIUM ION BATTERIES
Slide 6: Sapphire substrates, LED growth, electricity savings
For personal use only ● Sapphire substrates ● LED growing at 16% CAGR ● Massive electricity savings
Slide 7: Battery Energy Density
Battery Energy Density For personal use only 1000 Battery Cost (US$/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 8: 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 9: 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 10: 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 11: HPA Demand
For personal use only HPA Demand CRU • 272,000 tpa by 2028 • LIB separators 68% • LEDs demand 32%
Slide 12: Supply Deficit Analysis
For personal use only 20,000 Supply Deficit Analysis 0 CRU warns -20,000 -40,000 of significant -60,000 supply deficit 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 • Supply deficit of 20,000 tpa by 2021 • Peaking in 2028 at 50,000 tpa • New entrants 3-4 years behind
Slide 13: Current HPA Producers
For personal use only Sumitomo Chemicals (Japan) 3,020 Others (15), 3,570 Sasol (South Africa) Huantou, 800 1,800 Dailian Rall, 600 Nippon Light Metal, 1,100 Current HPA Producers Hebei Pengda (China) Baikowski (France) 1,200 3,000 Xuancheng Jing Rui Zibo Xinfumeng (China) (China) 1,200 2,500 Source
Slide 14: 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 15: Meckering kaolin feedstock
For personal use only • Very low iron (Fe) due to weathering • 12.7Mt JORC Mineral Resources^ (250 yrs) • Meckering, Western Australia Bauxite % Darling Altech Low-Impurity Kaolin * Al2O3 Range* 34.5 30.0 Kaolin SiO2 21.5 57.9 Feedstock Fe2O3 21.2 0.4 TiO2 2.00 0.7 K2 O 0.24 0.2 NaO 0.005 0.01 ^ Mea
Slide 16: Mining approval granted
For personal use only • Mining approval granted • Works approval granted • Simple free dig mining Meckering • Campaign mining, 2 months - 3 Kaolin Deposit years feed West Aust • Then just sea container loading operation
Slide 17: Chemical-zoned industrial park, Johor
For personal use only • Chemical-zoned industrial park • 60% lower operating costs • HCl plant nearby HPA Plant • All services available Johor, • 5-10 year corporate tax free Malaysia • No radioactive waste
Slide 18: 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 19: 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 20: Established, proven chemistry
For personal use only • Chemistry by Swiss in 1900s • USA & Alcoa developed further 1980’s • No demand for HPA in 1980’s • New HPA growth demand (LEDs LIBs) Established • Altech applied chemistry to Meckering Proven • Very successful, disruptive, lowest cost Chemistry • One patent granted, 8 pending
Slide 21: Our advantages
For personal use only • Our advantages 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 22: Altech's Green HPA process
For personal use only • Doesn’t use Al metal • 46% reduction of greenhouse gases • Uses 41% less energy than conventional Altech’s Green • Use of LEDs worldwide HPA process • Reduction of 77 mil t CO2 pa
Slide 23: Mitsubishi 10-year exclusive off-take agreement
For personal use only • 10 year exclusive off-take agreement • Mitsubishi has downstream customers Mitsubishi • Altech gets paid ex gate 10 year • Price is at prevailing market price off-take • Strategic focus for Mitsubishi
Slide 24: For personal use only
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Slide 25: 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 Turn Key • Process & quality guarantee Contract • Committed US$ 15 mil equity 26
Slide 26: 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 27
Slide 27: Project economics
For personal use only • Pre-tax NPV7.5 US$ 505 million • Payback (full rate) 3.9 years • EBITDA US$ 76 million p.a. Economics • Capital cost US$ 298 million* • Production Costs - US$ 8.55 /kg FIDS Equity • LT Sale Price - US$ 26.9/kg Model • Gross Margin – 68% * Pre Financing Costs 28
Slide 28: Altech market cap performance
For personal use only • 14 x market cap growth (5 years) • Ave trade value $2k/day to $350k/day • Mar Cap of $104m - 743 m shares Altech • Cash $8.2 m end June Steady Growth • No debt Altech Chemicals Limited Market Capitalisation - end of month ($m) Performance $100.0 $80.0 $60.0 $40.0 $20.0 $- 29
Slide 29: Quality shareholders
For personal use only • Melewar Group – Malaysia • Deutsche Balaton – Germany • SMS Group – Germany Quality Melewar SMS Shareholders 9% 8% Board Mge 3% D Balaton /Delphi 13% Others 67% 30
Slide 30: Sapphire substrates, LED growth, electricity savings
For personal use only ● Sapphire substrates ● LED growing at 16% CAGR ● Massive electricity savings
Slide 31: Senior debt funding - KfW IPEX-Bank
For personal use only • Senior debt funding - KfW IPEX-Bank • Germany’s state bank • Total debt of US$ 190 million Senior Debt • US$ 170 million export credit finance Completed • 50% of plant – German suppliers • Low interest, long tenure • 18 months of due diligence
Slide 32: Mezzanine debt - Macquarie
For personal use only • Indicative non binding US$90m • Technical DD by Worley Parson completed Macquarie • Market DD by CRU completed Mezzanine Debt • Internal financial modelling done In Progress • Legal due diligence to commence • 14 months of DD so far
Slide 33: Stage 1 Construction underway
For personal use only Stage 1 & 2 Construction underway
Slide 34: Site Retaining Walls
For personal use only Stage 1 & 2 Construction underway Site Retaining Walls
Slide 35: Underground Process Water Tanks
For personal use only Stage 1 & 2 Construction underway Underground Process Water Tanks
Slide 36: Maintenance Workshop Building
For personal use only Stage 1 & 2 Construction underway Maintenance Workshop Building
Slide 37: German Project Equity Strategy
For personal use only German Project Equity Strategy Altech Advanced Materials AG
Slide 38: Europe major battery industry
For personal use only • Europe major battery industry • Capacity of 147 GWh by 2024 • Stringent 2020 EU CO2 emission (95g/km) • Push to EVs by European car manufacturers Europe • Less reliant on Asia Battery • VW retooling 16 factories Industry
Slide 39: EV sales are exploding in Europe
For personal use only • EV’s models set to triple, next 3 years • 214 electric and plug-in hybrid models • Investment of €145 billion in electrification, and “battery making EVs sales are exploding in Europe
Slide 40: Invitation from Saxony State Government
For personal use only • Invitation Saxony State Gov, Germany • Consider building 2nd plant there • Schwarze Pumpe Industrial Area • Various government grants available Saxony • Focussed on first HPA plant, however Invitation • HPA supply deficient – need to start 2nd Plant planning
Slide 41: Project Equity Financing: Two Options
For personal use only Two Options 1) Sell 49% to strategic joint venture partner for US$100m (various work streams in progress) Project 2) Raise US$100 m and sell 49% German Equity listed company (AAM strategy in progress) Financing 42
Slide 42: Altech Advanced Materials AG (AAM)
For personal use only • Altech Advanced Materials AG (AAM) • Access European investor market • AAM will be 49% JV partner of project US$100 m • Guarantees 15% pa return after year 6 European • ATC will buy-back 49% of project for US$230m Capital • AAM right to cancel buy-back (upside) Raising
Slide 43: AAM Capital Raising & JV Structure
AAM Capital Raising & JV Structure For personal use only Australia Germany Joint Altech Advanced Venture Altech Chemicals US$ 100m * Materials (AAM) Partners Limited (ASX:ATC) (FSE: AMA1) 51% 49% US$ 100m HPA Altech Chemicals Project I/P Australia Pty Ltd Company US$ 100m 100% 100% Australia Malaysi
Slide 44: Buy back after Year 6
Buy back after Year 6 For personal use only US$ 230m * Australia Germany Joint Altech Advanced Venture Altech Chemicals Materials (AAM) Partners Limited (ASX:ATC) (FSE: AMA1) 100% HPA Altech Chemicals Project I/P Australia Pty Ltd Company 100% 100% Australia Malaysia Altech Altech US$190 (KFW) Mecke
Slide 45: US$100m valuation
For personal use only • Altech (51%) has invested A$60m to date • 5 year development effort • 250 year mine life deposit • I / P & process technology US$100m • Mitsubishi 10-year off take Valuation • KfW US$190m senior loan for 49% • Fixed price EPC contract with SMS • Mez debt term sheet US$90m • B
Slide 46: Thank you
For personal use only Right Place Right Time Right Feedstock Right Technology Thank you
Slide 47: 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
Altech Chemicals — Investor Presentation (September 2019) on 6ix