ALTECH – HPA PLANT STAGE 1 CONSTRUCTION UPDATE
ASX Announcement 12 March 2019
Highlights
- Stage 1 construction progressing as planned
- Site office, security post and safety systems established
- Topsoil removed, bulk earthworks and levelling in progress
- Piling rig mobilised to site
- Steel for workshop procured and being sand blasted
Altech Chemicals Limited (Altech/the Company) (ASX: ATC) (FRA: A3Y) is pleased to provide an update of activities at the Company’s high purity alumina (HPA) project site in Johor, Malaysia, where Stage 1 construction is progressing as planned.
Initial site establishment activities are now complete, with the site now fully fenced and secured. The site construction office has been erected; a security post has been installed; a vehicle wash down bay is established with sediment control; a site weather monitoring station is in place; and temporary ablutions are installed. A site safety induction process has been established, with all entry onto the site strictly controlled. Site security personnel have been inducted and the site is now monitored on a 24-hour, 7 day per week basis.
Removal of top soil from the site is complete and bulk earthworks and site levelling is in progress. A foundation piling rig has been mobilised to site for pilling tests. Workshop foundation piling is expected to commence shortly and preparations for the reinforced concrete works are in progress. Workshop steel (70 tons) has been purchased and has arrived at a nearly fabrication shop in preparation for sandblasting and off-site fabrication.
Overall, Stage 1 work has been steady and is building. The site is gradually moving from the establishment phase into the construction phase. Work is being conducted in accordance with the highest safety standards and there have been no safety incidents to report.
A short video highlighting Stage 1 construction activities can be viewed via the following link: https://www.youtube.com/watch?v=sewJFlp6XY4
Site construction office | Site safety procedures established |
Site access control | Security post |
Completion of site perimeter fence | Vehicle wash down bay with sediment control |
Top soil removal completed | Top soil removal completed |
ALTECH – HPA COATED BATTERY SEPARATOR MARKET UPDATE
Highlights
- Transition to HPA coated battery separators clearly evident
- 47% increase in quarterly sales volumes for HPA coated separators
- W-Scope increasing HPA coated separator production capacity
- South Korea a leader in HPA use for separators
Altech Chemicals Limited (Altech/the Company) (ASX: ATC) (FRA: A3Y) is pleased to provide an update on the transition by lithium-ion battery manufactures to high purity alumina (HPA) coated battery separator sheets, as is apparent from recently announced quarterly sales data by Japanese separator sheet manufacturer W-Scope (6619 JT) and from Altech’s recent attendance at the Battery Japan 2019 conference, held in Tokyo.
Table 1 – W-Scope HPA Coated Separator Sheet Sales Volumes (as % of total sales)
W-Scope reported in its 4th quarter 2018 results that as a proportion of total sales, HPA coated separator sheets jumped to 51%, a volume increase of approximately 47% compared to an average sales volume of ~34% in the preceding four quarters (see Table 1).
The transition by lithium-ion battery manufactures to HPA coated separators is primarily a function of advances in battery anode and cathode technology. As a result, battery energy storage capacity is increasing and battery operating temperature during charge and discharge is higher – to the point where traditional non-coated polymer separator sheets are reaching the limit of safe application, hence the transition to HPA coated separators which tolerate higher operating temperatures (refer Altech’s ASX Announcement of 6 June 2018). The transition to HPA coated separators has been anticipated for some time, however the quarter 4, 2018 W-Scope sales data indicates that the transition may be progressing at a rate faster that previously envisaged.
W-Scope announced two years ago that it was doubling its HPA coated separator business due its anticipation of increased demand for its coated separators from lithium-ion battery manufacturers that supply the electric vehicle and consumer goods industries. This investment appears to be well founded, as in its investor update published in mid-February 2019, W-Scope announced annual sales revenue guidance of ¥17.5bn for 2019, which compares to actual annual sales revenue of ¥8.7bn for 2018, a year-on-year increase of 100%. And for 2020, W-Scope has forecast a further increase in expected sales revenue that is 50% above its 2019 guidance, primarily on the back of capital expenditure for four additional HPA coated separator sheet production lines in response to coated separator sheet supply contracts associated with the electric vehicle industry. Nearly 60% of W-Scope’s sales are to South Korea
Most battery separator sheet manufacturers are business units within large conglomerates and/or are not listed on a stock exchange and consequently they do not publish detailed sales data. W-Scope, as a public company with its shares quoted on the Tokyo Stock Exchange, does publish detailed sales data and Altech monitors its published information to assist it in understanding current trends in the battery separator sheet market. W-Scope has a ~10% share of the global battery separator sheet market.
Photo 1 – Altech Chemicals Limited booth at Battery Japan 2019 (with Mitsubishi Representatives)
PROFILE
Altech Chemicals Limited (Altech/the Company) is aiming to become one of the world's leading suppliers of 99.99% (4N) high purity alumina (HPA) (Al2O3).
HPA is a high-value, high margin and highly demanded product as it is the critical ingredient required for the production of synthetic sapphire. Synthetic sapphire is used in the manufacture of substrates for LED lights, semiconductor wafers used in the electronics industry, and scratch-resistant sapphire glass used for wristwatch faces, optical windows and smartphone components. There is no substitute for HPA in the manufacture of synthetic sapphire.
Global HPA demand is approximately 25,315tpa (2016) and demand is growing at a compound annual growth rate (CAGR) of 16.7% (2016-2024), primarily driven by the growth in worldwide adoption of LEDs. As an energy efficient, longer lasting and lower operating cost form of lighting, LED lighting is replacing the traditional incandescent bulbs.
Current HPA producers use expensive and highly processed feedstock materials such as aluminium metal to produce HPA. Altech has completed a Final Investment Decision Study (FIDS) for the construction and operation of a 4,500tpa HPA plant at the Tanjung Langsat Industrial Complex, Johor, Malaysia. The plant will produce HPA directly from kaolin clay, which will be sourced from the Company’s 100%-owned kaolin deposit at Meckering, Western Australia. Altech’s production process will employ conventional “off-the-shelf” plant and equipment to extract HPA using a hydrochloric (HCl) acid-based process. Production costs are anticipated to be considerably lower than established HPA producers.
