The German government has given Altech Chemicals (ASX: ATC) the nod for its export credit cover application which will provide the majority of finance required to develop its proposed high purity 99.99% alumina plant in Malaysia.
Speaking with Small Caps, Altech’s managing director Iggy Tan said, “This is a fantastic milestone for the company and we look forward to finalising the rest of the financing next year.”
He added further details on the cover were expected in coming days.
Altech settled on its plant’s final design in October, with the company planning to develop 4,500 tonne per annum of high purity alumina for the synthetic sapphire and lithium-ion battery markets.
The company plans to develop the alumina using feedstock from its kaolin deposit in Western Australia which has JORC-compliant resources to support 250 years of operation and low contaminants such as iron.
In its final investment decision study, the company projected US$76 million per annum in earnings based on a US$26.9 per kg sale price for its planned 99.99% high purity alumina product.
Altech forecasts high purity alumina consumption would surge on the back of rocketing lithium-ion battery demand.
The high purity alumina is used to make the separator sheet in the lithium-ion battery.
Meanwhile, the high purity alumina for synthetic sapphire end users goes into LED lights, semiconductor wafers for electronics and scratch-resistant glass for smartphones, wrist-watch faces, optical windows and other hand-held devices.
Total global high purity alumina consumption is around 25,000tpa forecast to hit 86,831tpa by 2024.
Currently, China is the largest high purity alumina producer, followed by Japan, South Africa and France.
Within the first 15 minutes of trade this morning, Altech’s stock surged more than 20% to sit at A$0.26 at the time of writing.