Altech Chemicals (ATC) - Appoints UK & US Firms for Capital Raise

Altech Chemicals Limited is an ASX-listed company focused on the supply of battery materials for the lithium battery industry. The company is actively advancing its technologies which will enable the incorporation of silicon into lithium-ion batteries solving both the expansion and first cycle loss challenges faced by traditional lithium-ion batteries. The company aims to solve the challenges through the coating of silicon with a 2 nm thick layer of high purity alumina (HPA) which it will produce at its processing plant in Johor, Malaysia.

Matthew Gordon spoke to Iggy Tan, Managing Director of Altech Chemicals (ASX:ATC) to discuss the company’s recent activities and announcements.

Company Overview

The company announced in February 2022 that the design of its HPA-coating pilot plant has been completed. The pilot plant will be able to deliver up to 36,680 kilograms of anode grade HPA coated silicon battery material per annum. The pilot plant will provide inputs for the company’s envisioned 10,000 ton per annum commercial production plant, which will be constructed and operated in Saxony, Germany.

The German engineering firm Küttner Engineering has been appointed as the pilot plant engineering contractor. Küttner Engineering has strong experience in the delivery of metallurgical plant projects. The final engineering works of the pilot plant are currently underway with the company already in progress with the procurement of the necessary materials to enable construction in the near future.

The company has also announced that it has initiated a planned USD$ 144 million listed green bond offering which will be executed by the London based Bedford Row Capital Plc and the Australian firm Bluemont Capital. The bond offering is aimed at securing further funding for the company’s High Purity Alumina (HPA) processing plant in Johor, Malaysia.

Altech Chemicals Limited holds non-disclosure agreements (NDAs) with various lithium-ion battery manufacturers as well as electric vehicle manufacturers in Europe and plans to use the produced HPA coated material to enable future commercial arrangements.  

The technology

Altech Chemicals Limited reported in September 2020, that it had developed a method to coat graphite particles, typically found in lithium-ion batteries with a nanolayer of High Purity Alumina. The company further developed, tested and expanded on the HPA coating technology at its dedicated research and development laboratory in Perth, Australia.

Altech Chemicals Limited announced in November 2021, that it had successfully created and tested a composite silicon-graphite anode composed of HPA coated silicon particles and graphite.

The created lithium-ion battery containing the HPA coated silicon-graphite anode, has a 30% higher energy density which enables either longer-lasting or smaller lithium-ion batteries.

The 30% higher energy density of the lithium-ion battery is accredited to the incorporation of silicon particles which solve the traditionally faced expansion and first cycle loss challenges seen by lithium-ion batteries.

Iggy Tan, Managing Director of Altech Chemicals Limited believes that its technology is a game-changer and holds vast potential for the lithium-ion battery industry, he states:

“The industry has been trying to resolve these problems for many years. Our company, using alumina-coating technology, seems to have resolved this problem. We can coat silicon particles as well as graphite particles and put it together into a nanomaterial. We recently announced that we created a battery that has a 30% higher energy density than the conventional lithium-ion battery. So it's very exciting. A game-changing result.”

Altech Chemicals Limited recently announced that it had not only concluded with the design of an HPA coating pilot plant but also announced the engineering contractor of the pilot plant.

Commercial plant

Altech Chemicals Limited announced in February 2022 that it had, through its German subsidiary company, Altech Industries Germany GmbH (AIG) concluded with the design of a battery materials coating pilot plant that will be able to produce 120 kg/day or 37,000 kg/annum of HPA coated anode material. The pilot plant will be aimed at producing samples for qualification testing as well as to provide optimised inputs for the company’s planned 10,000 ton per annum commercial plant.

Altech Industries Germany GmbH (AIG) is 75% owned by Altech Chemicals Limited and 25% owned by Altech Advanced Materials AIG. AIG holds the exclusive rights for the use of the company’s proprietary coating technology in the European Union.

The pilot plant is set to be constructed and operated at the Dock3 facility adjacent to AIG’s designated site at the Schwarze Pumpe Industrial Park in Saxony, Germany.

The company also announced in February 2022, that it had awarded the German engineering firm Küttner GmbH & Co. KG (Küttner) the contract for the final plant engineering of the battery materials coating pilot plant.

Küttner is a German-based industrial plant engineering and engineering procurement and construction (EPC) contractor. The company has a long history and vast experience in design, procurement, project and construction management, and plant commissioning across a range of industries. Küttner has previously conducted various metallurgical plant, water and off-gas treatment projects in Germany. AIG believes that Küttner will bring valuable local knowledge to the execution of the pilot plant project.

The coated battery materials are a “drop-in” technology, with the battery materials produced simply replacing the previous anode material. The replaced anode material produced by Altech Chemical Limited will have a 30% higher energy density which may either be implemented towards increasing the driving range of various electric vehicles (EVs) or to reduce the battery size and in doing so reduce the cost of the produced battery. Iggy Tan states:  

“It's drop-in technology. They'll just use the same black powder, but the black powder they will be using will have a 30% higher energy density. To give you an example, graphite has around 300 milliamps ph/pg, that's the amount of energy density. Our material has about 4030 milliamps p/h p/g. That's a big step change in terms of the energy capacity. You rightly pointed out that a lot of the car manufactures will be looking at the same range, but reducing the size of the battery and the weight of the battery, and by doing that, the cost of the battery comes down”

The company plans on sending the produced HPA coated battery materials to various European EV manufacturers with whom it has non-disclosure agreements (NDAs). The materials will need to undergo rigorous testing, to ensure it conforms to European battery standards. The company is also underway with a pre-feasibility study (PFS) for its planned commercial plant, whilst it advances the pilot plant simultaneously. Iggy Tan says that the rationale behind running the commercialisation process in tandem with the detailed engineering is to advance the project while producing qualification material, he states:

“we're doing a lot of laboratory work. We are also running the commercialization process in tandem. We have commenced a pre-feasibility study for this plant, but we've also commenced engineering work on a pilot plant because we realised that the materials that we intend to produce need to go into the market. They need to be tested through the qualification process of these major European battery makers as well as the European car manufacturers. We have NDAs with a couple of automakers in Europe, and also an NDA with a large battery maker in Europe”

The planned HPA battery coating pilot plant is fully funded according to the company, with the pilot plant set to cost between USD$ 5 million and USD$ 6 million. The company raised approximately USD$ 10 million last year which will be sufficient to see the project through.

Altech Chemicals Limited plans to source the high-purity alumina (HPA) for its commercial plant from its HPA processing plant located in Johor, Malaysia.

HPA processing plant

Altech Chemicals Limited recently announced that it has solicited the services of London to be based structuring agent Bedford Row Capital Plc and Perth based Bluemount Capital (WA) Pty Ltd to finalise a green bond offer that is aimed at raising USD$ 144 million, which will be implemented towards the company's HPA processing facility. USD$ 100 million of the green bond offering will be used as secondary debt for the construction of the company’s HPA processing plant, with the remainder implemented toward servicing bond interest during the processing plant’s construction phase.

The bonds will be issued by Sustainable Capital Plc, an United Kingdom based dedicated green bond issuance platform. The bonds will be subordinate to the project's senior loan conducted with the German government-owned KfW IPEX-Bank. For USD$ 190 million, Iggy Tan states:

“Our senior loan was already done with a German bank KFW IPEX-Bank loan. The secondary loan we're moving through is with the green bond process. The marketing of that bond has gone out. There are up to 80 groups that have registered interest to receive the information memorandum, and we've already started presenting to some of these groups”

The company is also aiming to secure a joint venture partnership for the HPA processing facility and has appointed the US-based global investment bank Del Morgan & Co. The company aims to secure North American Investment in the amount of USD$ 100 million for 49% equity of the processing plant through this equity offering. Iggy Tan states:

“We're chasing USD$ 100 million to find a joint venture partner for the project, and we've appointed a US group called DelMorgan. DelMorgan are currently in the process of looking for an equity partner, and their process has been running the same as the green bond process”

Altech Chemicals Limited aims to find a strategic partner which will be able to add value to the project in any form, should that be through distribution, access or any other value addition it may offer.

The company believes that it is well-positioned to be a key player in the lithium-ion battery sector and believes that as the oil reserves of the world become more constrained, the EV industry of the world will continue to grow. The current geopolitical situation between Russia and Ukraine is accelerating the dwindling of global oil reserves, which the company believes will create more focus on EV alternatives, Iggy Tan states:

“…the price at the pump has really gone up, so they'll be more focused on electric vehicles and lithium-ion batteries, etc. Renewable power will not go away, and I think this will probably put a lot of focus on that.”

To find out more, go to the Altech Chemicals website