Confirmatory pilot plant test work and various independent reviews are nearing completion for Altech Chemicals proposed high purity alumina (HPA) project in Malaysia. This work forms part of the due diligence activities associated with the financing of the proposed plant.
On August 10, 2016 the appointment of due diligence consultants by Altech and Germany’s KfW IPEX-Bank was announced. The consultants are engaged to undertake definitive technical, market and legal reviews of the HPA project, with an independent ‘expert opinion’ report presented at the conclusion of the reviews for the benefit of the German export credit cover (ECA).
The due diligence consultants completed site visits to Meckering, Fremantle and Perth in Western Australia and to Johor, Malaysia in early August 2016 and their respective initial reviews did not identify any major flaws in the HPA project.
However various pilot plant confirmatory test work programs were requested and detailed audits initiated accordingly. The test work programs and audits are now well advanced.
Altech has been working exclusively with KfW IPEX-Bank on project finance structuring. The company is targeting US$70 million of project debt, the majority of which is aimed to be subject to ECA, typically offered at attractive interest rates and terms. The remainder is expected to be available on normal commercial loan terms.
Altech managing director Iggy Tan said, “The last five months have been extremely busy for the company as we worked with the various due diligence consultants to complete confirmatory pilot plant test work and respond to a large number of detailed information requests.”
Altech aims to become one of the world’s leading suppliers of 99.99% high purity alumina. HPA is a high-value, high margin and highly demanded product as it is the critical ingredient required for the production of artificial sapphire, which is used in the manufacture of substrates for LED lights, semiconductor wafers used in the electronics industry, and scratch-resistant artificial sapphire glass used for wristwatch faces, optical windows and smartphone components. There is no substitute for HPA in the manufacture of artificial sapphire.
Annual global HPA demand is approximately 25,315 tonnes and demand is growing at a compound annual growth rate (CAGR) of 16.7%, primarily driven by the growth in worldwide adoption of LEDs. As an energy efficient, longer lasting and lower operating cost form of lighting, LED lighting is replacing the traditional incandescent bulbs.
Altech has completed a Bankable Feasibility Study for the construction and operation of a 4000 tonnes/annum HPA plant at Tanjung Langsat, Malaysia. The plant will produce HPA directly from kaolin clay, which will be sourced from the company’s kaolin deposit at Meckering, Western Australia.