Altech Chemicals continues to make good progress on the stage one construction of its high purity alumina, or “HPA”, processing plant in Johor, Malaysia, with initial site establishment activities now complete.
Removal of topsoil from the site is complete, and the company is now progressing bulk earthworks and site levelling.
A foundation piling rig has been mobilised to site for pilling tests, and workshop foundation piling is expected to commence shortly.
Preparations for the reinforced concrete works are in progress whilst workshop steel has arrived at a nearby fabrication shop for off-site fabrication.
Management previously said that the majority of stage 1 works have been funded and pre-paid to German engineering, procurement and construction contractor, the SMS group.
This will be credited against the USD$280 million lump-sum, fixed-price HPA plant EPC contract.
Separately, Altech officially mandated Macquarie Bank as the preferred mezzanine lender for the HPA plant last week.
The company previously received the indicative and non-binding mezzanine debt term sheet for a facility amount of up to US$90m in May last year.
Completion of the mezzanine facility by Macquarie is conditional on the outcome of the project due diligence that is currently underway and agreement with German government-owned KfW-IPEX Bank on inter-creditor arrangements.
KfW-IPEX has already committed to a US$190m senior debt package for Altech’s HPA project.
Altech selected the Tanjung Industrial complex in Johor for the HPA plant based on the significant economic and development benefits, including the ready availability of critical consumables such as hydrochloric acid, limestone and quicklime and nearby utilities such as power and natural gas, at very competitive prices.
The availability of skilled labour, proximity to an international container port and international airports, pretty well sealed the deal for Altech.
Manufacturing in the area also provides various investment incentives, such as a 5-year corporate tax benefit to businesses utilising the Industrial complex.
Altech will produce up to 4,500 tonnes of HPA at its Johor plant from very pure kaolin clays sourced from a shallow open pit mine near Meckering in WA.
The Meckering deposit has a current JORC resource of 12.7 million tonnes grading 29.5% alumina, which is sufficient to support a staggering mine life of 250 years at the expected throughput rate.
This includes Measured resource of 1.5Mt @ 30% alumina and an Indicated resource of 3.3Mt @ 30% alumina. In addition, the deposit has below 1% of impurities such as iron, potassium and sodium.
HPA is utilised in high tech applications such as LED lighting, in advanced mobile phones and as a separator in lithium-ion batteries, which improves safety and performance.
The last use of HPA could be a real driver for growth given the rapid adoption of electric and hybrid vehicles.
Toyota is aiming to achieve annual sales of 5.5 million electrically driven vehicles by 2030 whilst General Motors plans to launch more than 20 electric vehicle models by 2023.
With the ongoing progress of the stage one works at its Malaysian plant and appointment of Macquarie as its preferred mezzanine lender, Altech is well advanced on its goal of becoming an HPA producer.
By Matt Birney
