Altech Chemicals seals investment ahead of high purity alumina demand

Altech Chemicals has completed a placement for A$1 million in proceeds with a cornerstone Asian investor as high-purity alumina (HPA) operations develop.

The company has received the second tranche of an investment by diversified Malaysian industrial firm Melewar International investment Company Limited, with the completion of a placement of about 17 million Altech shares.

The $1 million investment represents the majority of a $1.13 million fundraiser announced by Altech in August aimed at progressing a detailed design phase of the company’s HPA project. This operation encompasses mining properties 130 kilometres from Fremantle port in Western Australia and a proposed HPA plant in Malaysia with a throughout capacity of 4,000 tonnes per annum.

HPA is a high-value, high-margin and highly demanded product as it is the critical ingredient required for the production of sapphire substrates which are used in the manufacture of LED lights as well as the manufacture of alumina semiconductor wafers and the scratch-resistant artificial sapphire glass used by various smartphone manufacturers.

There is no substitute for HPA in the manufacture of sapphire substrates, sapphire semiconductor wafers or scratchproof sapphire glass.

Development progress

Recent milestones in strengthening Altech’s HPA business have included the signing of an agreement appointing Mitsubishi Corporation as the exclusive seller and distributor of the product to the Japanese market.

Mitsubishi is Japan's largest general trading company with a market cap of 3.38 trillion yen (A$39 billion) and more than 200 bases of operations in about 90 countries worldwide. The agreement with Mitsubishi provides the required marketing and distribution experience for its HPA in this market.

Japan accounted for 21% of global HPA demand in 2014, making it an important market for the company. Earlier in the year, Altech completed a Bankable Feasibility Study that highlighted the potential of its HPA project to deliver high margins, strong cash flows, and rapid payback period.