Altech Appoints SMS Group as EPC Contractor for Malaysian HPA Plant

Altech Chemicals Limited (ASX: ATC) (FRA: A3Y) advises that it has appointed German engineering firm SMS group Gmbh as the engineering, procurement and construction (EPC) contractor for its proposed Malaysian high purity alumina (HPA) plant.

KEY TAKEAWAYS:

• SMSgroup appointed as EPCcontractor
• Leading German global engineering and construction firm
• Additional throughput, process and quality guarantees
• Initial US$100,000 share subscription
• Project equity or subordinated debt support at financial close

SMS has proposed a clear and concise guarantee to Altech for HPA plant throughput. In addition, having prior experience with the kaolin-HPAhydrogen chloride processing technique that Altech will use, SMS has proposed process and final product guarantees and this will significantly strengthen Altech’s export credit project finance cover application. The additional guarantees proposed by SMS are extremely positive outcomes that significantly de-risk the project.

SMS has also agreed to an initial US$100,000 subscription of Altech shares upon formal execution of contract documentation, and has proposed an equity investment or subordinate debt support for Altech at project financial close.

Commenting on the appointment of SMS as EPC contractor, Altech managing director Iggy Tan said, “The appointment of SMS as EPCcontractor for the proposed Malaysian HPA plant, although only recently envisaged, will be a huge positive for the project. Not only does SMShave prior experience with the Company’s kaolin to HPA hydrogen chloride acid leaching process, it has demonstrated its confidence in Altechand the process with an initial US$100,000 equity investment pledge and project equity or subordinated debt support upon financial close. SMSalso has extensive experience with German ECA cover and is amongst the top three users of this facility in Germany.”

HPA is a high-value, high margin and highly demanded product as it is the critical ingredient required for the production of synthetic sapphire. Synthetic sapphire is used in the manufacture of substrates for LED lights, semiconductor wafers used in the electronics industry, and scratch-resistant sapphire glass used for wristwatch faces, optical windows and smartphone components. There is no substitute for HPA in the manufacture of synthetic sapphire.

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