Altech Chemicals has signed a 20-year lease agreement, which includes a 20-year renewal option, over the site for its proposed high purity alumina plant (HPA) in Johor, Malaysia. A signing ceremony was held last week in Johor to mark the significant milestone.

The 4 hectare site is within a section of the Tanjung Langsat Industrial Complex specifically reserved for chemical facilities. A key advantage of the site is its proximity to hydrochloric acid, lime and limestone plants, which are all required consumables for the proposed HPA plant. Reticulated natural gas and high voltage power is also readily available to the site, as is access to processing water.

At the ceremony Johor Corporation president and chief executive officer YB Dato Kamaruzzaman Abu Kassim formally presented Altech managing director Iggy Tan with the lease documents.

Altech plans to feed the plant with raw kaolin mined and shipped from its Meckering kaolin deposit in Western Australia. The kaolin feedstock will be shipped in sea containers from the port of Fremantle, Western Australia, to the nearby container port of Tanjung Pelepas. Final HPA product from the plant will also be distributed through this port, which is the 17th largest port in the world, shipping more than 7 million sea containers annually.

Iggy Tan said, “Johor is currently the preferred destination for business investment in Malaysia. Costs of business in Johor are estimated at 30% less than in Kuala Lumpur and 60% less than in Singapore.

“With three ports; low cost and established power, gas, road, telecommunications and other business infrastructure and its proximity to Singapore, Johor is the ideal site for Altech’s downstream high value-add HPA processing plant.

“We firmly believe that the benefits of locating our HPA plant in Johor will enable Altech to position itself in the lowest quartile of the world’s HPA producers. This is important when you are competing in a global market.”

Altech recently commissioned a market research report for global high purity alumina (HPA) demand to support project debt funding for the proposed plant in Malaysia. The report noted that global HPA demand grew 19.5% in 2015 compared with 2014 and demand is forecast to remain strong, growing at 16.7% annually through to 2024.

Overall, the market research report on the global HPA demand is supportive of Altech’s ambitions to construct a plant in Malaysia. It confirms the low-cost/high purity of the acid-leach processing that Altech has adopted for its Malaysian HPA plant.

The report also confirms the continued strong bargaining power of HPA producers and the low level threat of substitute products for HPA.