Heidelberg (pta020/14.07.2020/11:30) - Highlights:
* Option for Altech Chemicals to acquire ~10Ha industrial site in Saxony, Germany
* Follows invitation from the state of Saxony to construct next HPA plant in Germany
* Site access assured during the option period for planning and assessment
* Eur750bn of European Union fiscal stimulus allocated to Next Generation "green" initiative
* Germany mandates electric vehicle charging points in all service stations
* Eur2.5bn allocated to battery cell production and charging infrastructure
Altech Advanced Materials AG ("AAM") (FRA: AMA1) is pleased to provide an update from Altech Chemicals Limited, Australia, ("Altech Chemicals"), on its activities to build the next high purity alumina (HPA) plant in Germany.
Altech Chemicals informed us today that it has executed an option to purchase agreement for a ~10 hectare industrial site within the Schwarz Pumpe Industrial Park, municipality of Spreetal, Saxony. This follows the official invitation that it received from the State Government of Saxony, Germany in September 2019 for the Company to consider building its next HPA plant in Saxony.
The agreement provides Altech with an initial 12-month term during which it can exercise its purchase option, with the ability to extend the option period by a further 12-months via mutual consent. The purchase price for the site is confidential, however on a per-hectare basis the price is considerably less than comparable brown-fields industrial sites in Malaysia or Western Australia. During the option period Altech will have access to the site for planning and assessment purposes. Altech is investigating the site as a preferred location for a second HPA plant, specifically to service forecast demand for HPA from Europe's burgeoning electric vehicle and renewable energy battery sectors.
The Schwarze Pumpe Industrial Park is located in north-eastern Saxony and is well serviced by existing infrastructure including reticulated electricity and natural gas, rail and roads. The industrial park is 120 km from Berlin and only 78 km from Dresden. Saxony is a state which hosts production sites for Volkswagen, BMW, Porsche and Daimler. The region is a leading engineering training ground and has excellent research facilities like the Fraunhofer Institute for Electronic Nano-systems which are very focussed on ceramic (HPA) nano technology in energy storage.
European Commission's COVID-19 Green Recovery Plan
The recovery plan presented by the European Commission to revive the economy and support the European Green Deal, "Next Generation EU", is to be endowed with 750 billion euros. The short-term priority of the plan is to repair the immediate economic and social damage caused by the COVID-19 pandemic, to kick-start economic recovery and prepare the next generation for a better future. The recovery plan and targeted reinforcements of the EU's long-term budget 2021-2027 will increase the financial clout of the EU budget to a total of EUR 1.85 trillion.
The funds of the "Next Generation EU" economic recovery plan are earmarked in particular to accelerate Europe's green and digital transition, with the European Commission expected to focus on unlocking investment in clean technologies and value chains, such as renewable and energy storage technologies - including batteries. The plan includes support for the financing of one million new charging points for electric vehicles (EVs) across Europe and the implementation of a critical raw materials action plan covering e-mobility, batteries and renewable energy.
Altech believes that HPA, as a critical input into lithium-ion battery manufacture, would fall within the scope of the EU action plan. Also, a draft of the ERP included a EUR 20 billion EU-wide purchasing facility for clean vehicles and a EUR 40-60 billion clean automotive investment fund, to accelerate investments in zero emissions drive trains. Although this level of detail was not included in the final high-level EU ERP communique - it is indicative of strong EU fiscal support for the European EV and renewable energy storage sectors.
Germany however has been more specific in providing details of the EV industry fiscal support that it has incorporated in its economic stimulus package post COVID-19. Part of Germany's Eur130 billion coronavirus stimulus package announced in June 2020 are the following pillars:
* EUR 2.5 billion will be spent on battery cell production and charging infrastructure;
* there is a 50% increase (to Eur9,000/vehicle) on the cash subsidy for EV purchases; and
* it has been mandated that all service stations must offer electric car charging points to help remove refuelling concerns and boost consumer demand for EV's.
The European and German initiatives are expected to provide a significant boost to EV demand along with the broader stimulus plan which included taxes to penalise ownership of large polluting combustion-engine sports utility vehicles. Germany's announcement follows a French initiative announced by President Macron to boost electric car sales within that country. Europe has a very clear commitment to battery-powered vehicles and placing electric mobility as a principal technology of the future.
Iggy Tan, Managing director of Altech Chemicals and member of the management board of AAM said that "whilst we have been focussed on the completion of finance and the continuation of construction of Altech's first HPA plant in Malaysia, the increased fiscal support for the EV and renewable energy sectors recently announced by the EU, combined with the forecast HPA supply deficit in coming years, has prompted us to move and secure this excellent HPA plant site in Germany - albeit earlier that I had anticipated. A HPA plant takes 4-5 years to design, permit, fund and construct. To meet the forecast HPA supply deficit, Altech has needs to be pro-active and put in place a plan for its next plant today, whilst staying extremely focussed on the first facility in Johor."
The Management Board
About Altech Advanced Materials AG
Altech Advanced Materials AG ("AAM") currently plans to subscribe up to 49% in Altech Chemicals Australia PTY LTD ("Altech Australia") for up to USD 100 million from Altech Chemicals Ltd, Australia. AAM is currently implementing its capital raising strategy to be able to fund the investment.
Altech Australia is currently building a high-purity alumina (99.99%, 4N HPA) production facility for 4,500 tons p.a. in Malaysia and also has its own deposit for the mining of the main raw material kaolin. 4N HPA is needed for the production of LED lights as well as a separator for lithium-ion batteries, e.g. needed for electric vehicles and smartphones. Market demand for 4N HPA is expected to grow with a CAGR of 30% p.a. until 2028. The process patented by Altech Australia allows the production of HPA as cost leader, as the HPA can be obtained directly from kaolin. This allows production without the use of energy-intensive aluminium. The production volume for the first 10 years is secured by an off-take agreement with Mitsubishi Australia and the production capacity and quality is guaranteed by the German plant manufacturer, SMS group GmbH, Dusseldorf, which has also agreed to contribute in equity to the Altech HPA project.
The project has an investment volume of approximately USD 390 million, of which KfW-IPEX Bank has already committed USD 190 million under certain conditions and of which USD 10 million is assumed as equity investment from SMS group GmbH. Altech Chemicals is in talks with Macquarie Bank on the provision of USD 90 million in mezzanine capital. The remaining USD 100 million is to be made available by AAM.(end)
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