Altech Chemicals (ASX: ATC) will immediately proceed to a definitive feasibility study for its battery materials coating plant after unveiling what it describes as an “outstanding” preliminary feasibility study, which gives its proposed plant in Germany a net present value of US$507 million.
The company says the “highly positive” study indicates a capital investment of US$95 million would be required to develop a 10,000 tonne per annum silicon-graphite alumina coating plant in Saxony.
Once operational, the plant will produce silicon-graphite anode materials called Silumina Anodes under Altech’s exclusive licence.
The Silumina Anodes are expected to supply Europe’s rapidly accelerating electric vehicle market.
Operations are forecast to bring in net cash of US$63 million per annum and pay back the investment capital in 3.1 years.
Total revenue from the 10,000tpa production rate is estimated at US$185 million a year.
‘Exciting downstream opportunity’
Altech managing director Iggy Tan said while the company’s focus remains on its high purity alumina (HPA) plant in Johor, Malaysia, the Silumina Anodes plant represents “an exciting downstream opportunity” for it to utilise its HPA coating technology.
“We are pleased and excited about the results of the 10,000tpa Silumina Anodes prefeasibility study.”
“Due to the attractive economics of the study, a decision has been made by [our subsidiary Altech Industries Germany’s] board to immediately progress to a definitive feasibility study for the project.”
Mr Tan noted land has already been purchased in Germany for the plant and the definitive feasibility study will “commence immediately”.
“We believe the production of Silumina Anodes materials could be a game changing technology for the lithium-ion battery industry,” Mr Tan added.
Cracking the ‘silicon code’
Altech revealed it had cracked the silicon code last year.
Silicon has 10-times the energy retention capacity compared to graphite, but, until now, it was unable to be used due to two main flaws.
The first flaw is that silicon swells up to 300% during charging, which fractures a battery and ultimately results in its failure. The second challenge is that silicon deactivates a high percentage of lithium-ions in a battery, which reduces battery performance and life.
However, Altech has managed to mitigate these challenges and boost energy retention in a lithium-ion battery by 30%.
It has also improved battery life and cyclability.
This breakthrough was achieved by combining silicon particles that have been treated with its patented HPA coating technology with graphite which has also undergone the same coating treatment.
The result is the Silumina Anodes product.