Altech Chemicals Ltd (ASX:ATC) continues to make progress with its plans to build and operate a high purity alumina (HPA) plant in Malaysia.
Project due diligence is nearing completion and no fatal flaws have been identified.
During August, Altech received indicative loan terms and conditions from KfWIPEX Bank for a US$70 million facility, confirming the banks intention to provide the entire project debt amount.
The non-binding facility terms and conditions remain subject to approvals and are being discussed.
Due diligence work is now focussed on addressing outstanding items and finalising draft reports in preparation for submission to project financiers.
Furthermore, HPA off-take discussions with Mitsubishi Corporation are planned for early November in Japan.
Iggy Tan, managing director, commented:
“The company is pleased with the progress of debt financing due diligence.
“The due diligence work commissioned by KfW IPEX-Bank and Euler Hermes is comprehensive and very detailed and it is reassuring that no fatal flaws in the project were identified.
“As expected and as is always the case, there are some items that the company will progress in the coming months, but at this stage this is not expected to materially affect the financing timeline.
“In parallel with the due diligence process, the company has been very busy progressing detailed design with M+W Group in preparation for ordering long lead time items for the plant.”
Background
Altech is aiming to become one of the world's leading suppliers of 99.99% HPA.
HPA is a high-value, high margin and highly demanded product as it is the critical ingredient required for the production of artificial sapphire.
Artificial sapphire is used in the manufacture of substrates for LED lights, semiconductor wafers used in the electronics industry and scratch-resistant artificial sapphire glass. Sapphire glass is used in models of the Apple watch.
There is no substitute for HPA in the manufacture of artificial sapphire.
Altech has been granted its mining lease at Meckering, where it is planning to mine 120,000 tonnes of kaolin every three years on a campaign basis, each mining campaign will last two months.
The resultant raw kaolin will be stockpiled, then containerised into standard shipping containers at the rate of around 40,000 tonnes per annum and transported to Johor, Malaysia for processing into HPA at the company’s proposed plant.
Off-take discussions
Representatives from Altech, KfW IPEX-Bank and Euler Hermes will meet executives of Mitsubishi Corporation in Japan in early November 2016.
Detailed discussions will be held regarding 10 year HPA off-take arrangement between the company and Mitsubishi Australia Ltd.
Maiden Ore Reserve
Altech recently posted a maiden Ore Reserve of 1.2 million tonnes grading 30% alumina for its 100% owned Meckering kaolin deposit located in Western Australia.
The Ore Reserve and mine design will provide immediate kaolin feedstock for an initial 30 years mine-life.