Frankfurt am Main (pta035/15.10.2020/15:20) - Highlights:
* Strong support from State Ministry for Economic, Labour and Transport, Saxony
* Encouragement for a second HPA plant in Germany
* Grant Commitment of EUR 7,38 Mio.
* Electric vehicle construction and battery production in the region Lausitz
* Detailed due diligence commenced
Altech Advanced Materials AG ("AAM") (FRA: AMA1) is pleased to announce that Altech Chemicals Limited ("Altech") has received a commitment letter from State Ministry for Economic, Labour and Transport, Saxony, Germany for a grant of EUR 7.38 Mio. for Altech's wholly owned German subsidiary Altech Industries Germany GmbH ("AIG"). The grant would be available to AIG to support the total investment for construction of a high purity alumina (HPA) plant at the Schwarze Pumpe, Industrial Park, municipality Spreetal in the State of Saxony, Germany.
The grant offer follows the July 2020 signing of an option to purchase agreement by AIG, for a ~ 10 hectare industrial site in the Schwarze Pumpe Industrial Park, Saxony (refer Corporate News 14 July 2020), and a recent joint site visit to the industrial park by Altech alternate director and member of the management board of AAM Mr Uwe Ahrens accompanied by various Altech consultants, Saxony state government officials, Spreetal Municipality officials, and industrial park senior management. The site visit also marked the commencement of a detailed due diligence and feasibility study process by Altech, to determine the viability of a second HPA plant in Germany.
In its letter to Altech, the Saxony state government has pledged its continued fullest support for possible construction of a HPA plant, and advised that the State Ministry for Economics, Labour and Transport (SMWA) and the Saxony Development Bank (SAB) are able to assist in the development of the proposed project. The letter further stated that: "from an industrial policy point of view, Altech's project is very much welcomed in the Region, Lausitz. Against the background of the developing electro mobility and the companies already having been established in this industry segment of electric vehicle construction and battery production in this region, synergy effects are expected. Saxony has industrial experience in battery production, especially in nearby Kamenz area, and has advantageous prerequisites as an industrial and research location".
Iggy Tan, Managing Director of Altech Chemicals and member of the management board of AAM said that the support letter from the Saxony State Ministry is very encouraging. "In essence, the grant means that if we were to determine that it was commercially viable to construct a second HPA plant in Germany, an initial amount of EUR 7.38 Mio. would be available. Altech however remains focussed on delivering the close of funding for our first HPA plant in Johor, Malaysia and the re-commencement of construction. However, by evaluating the opportunity in Germany we are quickly responding to the push by Europe to bring its supply chains closer to home and increase its self-reliance for critical raw materials - such as those that used in the manufacture of lithium-ion batteries. We see this as an opportunity that cannot be ignored, especially given Altech's strong established links to Germany - both on our share register, our board and the relationships we have built with SMS group and the German Government owned KfW IPEX-Bank", he said.
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)
|emitter:||Altech Advanced Materials AG|
Ziegelhäuser Landstraße 3
|contact person:||Hansjörg Plaggemars|
|phone:||+49 6221 64924-0|
|stock exchanges:||regulated market in Frankfurt; free market in Dusseldorf; open market in Berlin|