Altech Chemicals Invited to German HPA Party

THE BOURSE WHISPERER: Altech Chemicals (ASX: ATC) received an invitation letter from the state government of Saxony, Germany, proposing the company considers the construction of a second high-purity alumina (HPA) plant in the state.

“As HPA is recognised as a critical component in the lithium-ion battery materials supply chain, an Altech HPA plant in Saxony would be well positioned to support the regions push to create a major electric vehicle battery industry, with a secure materials supply chain,” Altech Chemicals said in its ASX announcement.

Altech’s German advisers have discussed the invitation with Minister-President of Saxony, Michael Kretschmer.

Based on these positive initial discussions, Altech indicated it intends to undertake further evaluation, which will include research on various government grants that the company has been advised may be available in support of the establishment of a HPA plant in eastern Germany.

“Whilst the company remains focused on the close of funding and the construction of its Malaysian HPA plant, it also recognises the forecast significant deficit of HPA supply commencing in 2020 and the opportunity that this may present in terms of a second HPA plant,” the company said.

Altech cited a recent market outlook report by CRU Consulting that identified a likely HPA 4N+ supply shortfall of approximately 20,000 tonnes per annum in 2021 (equivalent to around four of Altech’s 4,500tpa plants).

CRU forecast this could expand to a shortfall of some 50,000tpa by 2028.

“To this extent, the company is of the view that there is merit in commencing early stage planning for additional future HPA plants, now,” Altech continued.

“Considering the invitation letter from the Saxony state government and the strong signals from the European Union on its desire to foster a rapid transition to electric vehicles, and to establish a fully integrated materials supply chain to underpin the transition, the company’s current strategic thinking is for its next HPA plant to be located in Europe.”

 

Web: www.altechchemicals.com