Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — Investor Presentation (May 2018)
32 slides from Altech Batteries's investor presentation, May 7, 2018
Slide 1: Company Presentation
Altech Chemicals Limited ASX: ATC FSE: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 problem for electronics industry
Slide 5: Our Target Business: HPA price by purity
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 Batteries
LED’s & LITHIUM 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: Sapphire Applications
Sapphire Applications For personal use only Sapphire Wafer / Substrate Light Emitting Diodes LED LEDs Sapphire Cores LED’s: 1/6th of the energy
Slide 8: Light Emitting Diode
For personal use only Light Emitting Diode
Slide 9: LED Expansions
LED Expansions For personal use only Xiamen Changelight Purchases AIXTRON MOGVD Technology to Expands ROY LED Production
Slide 10: Sapphire Applications
Sapphire Applications For personal use only Sapphire Cores Un-scatchable Applications Sapphire Glass Smartphone and Lenses Glass
Slide 11: Sapphire Glass
Sapphire Glass For personal use only HTC U Ultra (128Gb) o February 2017 o Sapphire crystal display Smartphone sapphire screen iPhone o Sapphire crystal lens o Finger print recognition
Slide 12: Sapphire Glass Scratch Test
Sapphire Glass Scratch Test For personal use only
Slide 13: Global High Purity Alumina Forecast 2015-2024
For personal use only Global High Purity Alumina Forecast 2015 -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: HPA Coated Battery Separators
For personal use only HPA Coated Battery Separators • Low shrinkage, increased life cycle and increased safety • Enhanced short prevention and excellent structural integrity at high temperatures
Slide 15: HPA Coated Separator Demand Forecast
HPA Coated Separator Demand Forecast For personal use only • 1.6 kg HPA for average EV car (40 KWh) • 6.4 kg HPA for EV Bus (160 kWh) GLOBAL SEPARATOR HIGH PURITY ALUMINA DEMAND 99.99% HPA Used in Lithium Battery Separators Separator Forecast 15,102 Source: Altech Chemicals & Deutsche Bank Markets R
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$3,000 per tonne HPA ALTECH HPA PLANT One Single Process Step Kaolin 99.99% (4N) (aluminous clay) HPA
Slide 18: Altech Kaolin Feedstock
For personal use only • Very low iron (Fe) due to weathering • 12.7Mt JORC Mineral Resources^ (250 yrs) • Measured Resources 1.5Mt @ 30% Al2O3 • Indicated Resources 3.3Mt @ 30% Al2O3 • Inferred Resources 7.9Mt @ 29.1% Al2O3 • Deposit in Western Australia Low-impurity Bauxite Altech Kaolin Feedstock
Slide 19: Mining approval granted
For personal use only • Mining approval granted • Works approval granted • Simple free dig mining Meckering • Campaign mining, 2 months 3 years feed • Then just sea container loading operation Kaolin Deposit • Fremantle to Johor easy shipping in West Aust
Slide 20: Chemical-zoned industrial park (Tanjung Langsat)
For personal use only • Chemical-zoned industrial park (Tanjung Langsat) • lower operating costs • HCl plant nearby HPA Plant to • Services, natural gas, electricity, water be in Johor, • Access to 17th largest container port Malaysia • Malaysian government incentives • Environmental approval comple
Slide 21: Johor HPA Plant
Johor HPA Plant For personal use only Admin Site Entry Maintenance MCC Kaolin Silica Residue Beneficiation Acid Leach Warehouse Pelletising Crystallisation HCL Recycling Roasting
Slide 22: Altech's HPA Process
Altech’s HPA Process For personal use only ROM Sea Container Campaign Mining To Fremantle MECKERING Shipping Sea Container Meta Kaolin Flash JOHOR Dryer Hydrochloric Acid Filter Cooler Screening Calciner Milling HCl Gas Polishing Screening Filter Filter 700 C Drum Scrubber > 0.3mm Quartz Oversize Ac
Slide 23: Final Investment Decision Study economics
For personal use only • Pre-tax NPV7.5 US$ 505 million • Internal Rate of Return (IRR) 22% • Payback (full rate) 3.9 years Final • EBITDA US$ 76 million p.a. Investment • Capital cost US$ 298 million Decision Study • Production Costs - US$ 9.90/kg • LT Sale Price - US$ 26.9/kg (FIDS) • Gross Margin
Slide 24: Current Case Economics
For personal use only • Current HPA 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% 24
Slide 25: Bottom quartile operating costs
For personal use only • Competitors US$14 - 17,000/t (Breakaway Research) 1. We own our feedstock 2. Main reactant HCl re-used 3. Plant in low cost country (Malaysia) Bottom Quartile Altech for Op Costs Source: Persistence Market Research “High Purity Alumina Market – Global Industry Analysis and Fo
Slide 26: Off-take sales agreement with Mitsubishi
For personal use only • Off-take sales agreement with Mitsubishi • First 10 years of HPA operations • Secures sales for HPA plant production • Exclusive global distributor Mitsubishi • Experienced with HPA 10 year • Strategic priority: lithium-ion batteries off-take
Slide 27: SMS group German EPC contractor
For personal use only • SMS group German EPC contractor • Lump sum turn key contract • Completion and cost risk • Throughout guarantee Lump Sum • Process & quality guarantee Turn Key • Third largest user of ECA finance Contract • Committed US$ 15 mil equity contribution 27
Slide 28: 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 29: Funding: three work streams
For personal use only Three work streams 1) Subordinated mezzanine debt • Target US$120m 2) Equity work stream Advancing • Equity investment partners Final Stage • Lead - Petra Capital Funding 3) Possible JV Partner • Partial project sell down • Maximises shareholder returns and minimises dilution 2
Slide 30: Altech Chemicals Limited market capitalisation
For personal use only Altech Chemicals Limited Market Capitalisation - end of month ($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 31: Thank you
For personal use only Right Place Right Time Right Feedstock Right Technology Thank you
Slide 32: 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