All you need to know about Altech Chemicals’ (ASX:ATC) upcoming battery materials plant

Highlights

• Altech is progressing on its 10,000 tonnes per annum battery material plant in Germany.
• The plant is expected to produce battery anode material using Altech’s revolutionary patented HPA coating technology.
• The anode material will be manufactured under the trademark Silumina Anodes^TM.
• A recently completed PFS study of the plant returned excellent financial metrics with an NPV of US$507M and an IRR of 40%.
• Construction of pilot plant underway to demonstrate the Silumina Anodes^TM product to the burgeoning European electric vehicle market.

Setting its growth plans in motion, Altech Chemicals Limited (ASX:ATC|FRA:A3Y) recently announced the results of the Preliminary Feasibility Study (PFS) for its 10,000 tonnes per annum (tpa) battery materials manufacturing plant to be constructed in Saxony, Germany – the auto hub of the country – Altech’s plant is ideally located to leverage the burgeoning demand for EVs in Europe.

Related read: Altech Chemicals’ (ASX:ALTECH) March quarter brimming with milestones across projects

Earlier, ATC engaged with a German firm, Küttner GmbH & Co. KG, to take up the final engineering design for the proposed plant.

The results of the PFS indicate excellent financial metrics. The study highlights that the plant would require a capital investment of only US$95 million. The plant, at its full-scale production, is estimated to generate an annual revenue of US$185 million with an internal rate of return or IRR of 40%.

Summary of battery plant’s financial metrics (Image source: Company update, 20 April 2022)

Altech is currently constructing the pilot plant for the production of high purity alumina (HPA) coated battery anode material. The pilot plant will pave the way for the Company's 10,000tpa capacity plant.

The pilot plant is being constructed next to the main plant's building site. An on-site analytical laboratory will be housed at the pilot plant, allowing for rapid assessment of the product’s purity and physical characteristics. Altech will be able to quickly change the processing parameters and operating setpoints because of the on-site lab. Also, the Company secured a ~14-hectare industrial site in Saxony earlier this year.

Related read: Altech (ASX:ATC) riding high on excellent PFS results for German battery material plant

Why the launch of Tesla’s Gigafactory in Berlin is crucial for Altech

Tesla Motors, the World’s largest EV manufacturer, recently got the first car off the production line from its Gigafactory in Berlin, Germany. Elon Musk presented the keys of the first Model Y manufactured at the facility and said scale is the key to completely switch from a fossil fuel-based economy to a sustainable energy future.

The opening of the Gigafactory in Germany is significant for Altech too. Elon Musk had earlier said that to make EVs more affordable, the battery industry needs to develop highly efficient and cheaper batteries. Elon Musk also mentioned using silicon in the Li-ion batteries to increase the energy capacity.

The concept of introducing silicon to batteries is not new. The battery industry has long known that replacing graphite anodes with silicon could lead to higher efficiency and better performance of the lithium batteries.

Related read: Altech Chemicals (ASX:ATC) unveils pilot plant design for battery anode materials

But the problem with silicon is its swells on charging, and its volume increases by 300%, which could potentially damage the battery.

Altech’s groundbreaking research resolves this issue. The Company’s R&D team utilised its proprietary coating technology to treat silicon and graphite with 4N grade high purity alumina (HPA) to pass the silicon barrier and achieve 30% more energy capacity and a stable battery. The Company is advancing its R&D work to increase performance beyond 30%.

Also, Altech has registered its anode material under the trademark Silumina Anodes^TM. The plant would produce HPA coated silicon and graphite anode materials. Altech has already signed two Memoranda of Understanding (MoUs) with two graphite and silicon suppliers situated in Europe. The MoUs are intended to reduce the raw material supply risk for the proposed plant as the suppliers adhere to strict European environmental law.

Related read: Altech Chemicals (ASX:ATC) signs MOUs with European feedstock suppliers