Altech Chemicals (ASX:ATC) has expanded its kaolin operations in Western Australia with the grant of a new exploration licence.
The licence covers an area of approximately 480km2, is on freehold agricultural land and contains Inferred Kaolin Mineral Resources of 85 million tonnes at 85.1% brightness.
The area known as the Kerrigan project is proximal to the Hyden to Lake Grace railway line which connects to the port city of Albany.
There are also established sealed roads from Hyden to Perth and the ports of Albany, Bunbury, Esperance and Fremantle.
Kaolin samples from various outcrops, diamond drill core and air core at Kerrigan have had low levels of impurities (such as iron and sodium) and have been high in alumina.
The project may present an opportunity to provide kaolin as complementary high-grade feedstock for the company’s proposed Malaysian high-purity alumina (HPA) project.
The operational plan calls for raw, un-beneficiated kaolin will be delivered from the Meckering aluminous clay (kaolin) mine in WA by sea containers to Malaysia, where a smaller plant running at a lower operating cost will produce HPA for growing high-tech end markets – especially LED light manufacturing.
Shipping was last projected to run at a rate of about 40,000 tonnes per annum of un-beneficiated kaolin but an ongoing study of flow design, plan layout, capital equipment and operating costs may further enhance the project.
Bankable Feasibility Study results for the project have contemplated a net present value of US$326.1 million, a capital cost of US$76.9 million and a payback period of only 3.8 years.
Project EBITDA was initially calculated to total US$59.4 million per annum with global HPA demand growing at an annual rate of 28%.
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