Altech Chemicals in key high purity alumina initiative for Chinese market

Altech Chemicals is stepping up the pace of marketing and sales for future high purity alumina (HPA) product to be produced from Altech's HPA plant with a key initiative for the Chinese market.

Martin Ma has been appointed as the company's sales and marketing manager for China and tasked with establishing offtake agreements. Ma has experience in sales management of high purity feedstock materials to Chinese industries such as the lithium battery and electrical vehicle industries.

Altech has completed a Bankable Feasibility Study for the construction and operation of a 4,000 tonnes per annum HPA processing plant at Tanjung Langsat in Malaysia. The company clinched support of an export credit insurance scheme which could cover most of the total capital cost of the company’s proposed high-purity alumina (HPA) project.

Altech received a letter of interest from the administrator of Germany’s export credit agency (ECA) confirming that the group would, in principle, support the project. The project encompasses kaolin mining in Western Australia and processing a final HPA product at the proposed HPA processing plant in Malaysia.

Japanese strong demand for HPA

Mitsubishi was appointed exclusive seller and distributor of Altech’s final HPA product to the Japanese market in a landmark signed distribution agreement with Japan's largest general trading company.

Japan accounted for 21% of global HPA demand in 2014.

However, global demand is growing at a massive annual rate of 28%, primarily driven by the growth in LEDs, as this energy efficient, longer lasting and with lower-cost of lighting replaces traditional incandescent bulbs.

Recent forecasts indicate this increased HPA usage could translate into a doubling in demand over the coming decade.

Analysis

Today's key Chinese market initiative marks another building block in place for Altech after the company appointed the blue chip Mitsubishi as exclusive seller and distributor for Altech's future produced high purity alumina product for the fast growth Japanese market.

Perhaps missed by some investors was the earlier Letter of Interest received from Euler Hermes for German export credit cover of US$40.0 million of the US$77 million project capital estimated to qualify for ECA cover.

Production costs are forecast to be considerably lower for the processing plant than established HPA producers.