Altech Chemicals Ltd (ASX:ATC) is witnessing a heightened interest in its high purity alumina (HPA) project in Malaysia following the confirmation of project financing in late 2017 from German government-owned KfW IPEX-Bank.
READ: Altech Chemicals receives additional support for high purity alumina
Significantly, KfW IPEX-Bank approved an increased project finance debt package of US$190 million.
Altech has now commenced the project equity funding process, which is a condition precedent to debt draw-down.
The final required equity component of project funding will be determined as the company works though the balance of funding options and financing costs.
READ: Altech Chemicals raising $17.2M for high purity alumina project in Malaysia
During the quarter Altech completed a circa $17.2 million share placement to continue the development of its HPA project.
Subsequent to quarter end, the company submitted a manufacturing licence application to the Malaysian Investment Development Authority.
READ: Altech Chemicals submits manufacturing licence application in Malaysia
An application has also been made for the HPA project to be afforded a Pioneer Status (High Technology) investment incentive classification.
Altech’ Malaysian plant will produce HPA directly from kaolin clay, which will be sourced from the company’s kaolin deposit at Meckering, Western Australia.
HPA is a critical ingredient for the production of synthetic sapphire, which is used in the manufacture of substrates for LED lights and semiconductor wafers.
READ: Altech Chemicals study confirms US$505 million valuation
Critically, the company received positive results during the December quarter from a final investment decision study (FIDS) on its HPA project in Malaysia and kaolin mine in Western Australia.
The FIDS economics confirm a pre-tax net present value (NPV) of US$505 million which incorporates a capital cost of US$298 million.