Altech Chemicals Eyes High-Purity Alumina

KEY TAKEAWAYS:

• Iggy Tan, who made billions for Galaxy Resources courtesy of the boom in lithium-ion batteries, is expected to replicate this success in Altech through the high-purity alumina (HPA).
• The success of the new company highly depends on the approval by the German government of the debt component of Tan’s HPA proposal since 60% of the project will be accounted for by equipment and engineering suppliers from Germany.
• Demand for HPA is expected to increase by 17% compounded annually from 25,000 tonnes per year in 2016 to 86,000 tonnes by 2024.

Iggy Tan is eyeing to replicate his success in Galaxy Resources which benefitted from the lithium-ion battery boom. This time, his new company Altech Chemicals expects the same success from high-purity alumina (HPA).

Tan is known for his innovation at Galaxy Resources which turned it into a $1.2 billion company. He is doing the same for Altech through HPA which may not have a high-tonnage market with only around 25,000 tonnes global demand in 2016, but with a high-growth market.

Industry forecast shows a 17% compound growth rate every year for the HPA market with demand expected to increase to over 86,000 tonnes by 2024. The projected increase in demand for HPA is attributed to its growing applications.

At present, the HPA is used in the manufacture of clear synthetic sapphire glasses that are a component in LED lights. The sapphire scratch-resistant glasses are also highly needed in the manufacture of lenses and screens for Smartphones. Lithium-ion batteries also make use of the HPA to separate the anode and cathode to prevent the batteries from catching fires.

Altech plans to produce HPA that is 99.99% pure to come up with a high-value product. The company has a mine in Meckering which is around 130 kilometres from Fremantle. It also operates a Malaysian processing plant that produces $US27,000 per tonne of HPA.

The company eyes to produce up to 4,500 tonnes of HPA per year which can be easily absorbed by the market without destabilising the price. It expects a 3.7-year payback period for stage one of the project estimated to run for 30 years. The estimate is based on the assumed $US9,000 operating cost and $US23,000 per tonne selling price.

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