Option to Acquire Industrial Site Saxony, Germany
Option to Acquire Industrial Site Saxony, Germany
Perth, July 14, 2020 AEST (ABN Newswire) - Altech Chemicals Limited (ASX:ATC) (FRA:A3Y) is pleased to announce that it has executed an option to purchase agreement for a ~10 hectare industrial site within the Schwarze Pumpe Industrial Park, municipality of Spreetal, Saxony, (see Figure 1*). This follows an official invitation that it received from the State Government of Saxony, Germany in September 2019 for the Company to consider building its next high purity alumina (HPA) plant in Saxony.

The agreement provides Altech with an initial 12-month term during which it can exercise its purchase option, with the ability to extend the option period by a further 12-months via mutual consent. The purchase price for the site is confidential, however on a per-hectare basis the price is considerably less than comparable brownfields industrial sites in Malaysia or Western Australia. During the option period Altech will have access to the site for planning and assessment purposes. Altech is investigating the site as a preferred location for a second HPA plant, specifically to service forecast demand for HPA from Europe's burgeoning electric vehicle and renewable energy battery sectors.

The Schwarze Pumpe Industrial Park is located in north-eastern Saxony and is well serviced by existing infrastructure including reticulated electricity and natural gas, rail and roads. The industrial park is 120 km from Berlin and only 78 km from Dresden. Saxony is a state which hosts production sites for Volkswagen, BMW, Porsche and Damler. The region is a leading engineering training ground and has excellent research facilities like the Fraunhofer Institute for Electronic Nano-systems which are very focussed on ceramic (HPA) nano technology in energy storage.

European Commission's COVID-19 Green Recovery Plan

The European Commission recently released its coronavirus recovery plan, which is focussed on economic revival and support of the European Green Deal "Next Generation EU" and is to be endowed with 750 billion euros. The short-term priority of the plan is to repair the immediate economic and social damage caused by the COVID-19 pandemic, to kick-start economic recovery and prepare the next generation for a better future. The recovery plan and targeted reinforcements of the EU's long-term budget 2021-2027 will increase the financial clout of the EU budget to a total of EUR 1.85 trillion.

The funds allocated to the "Next Generation EU" economic recovery plan are earmarked in particular to accelerate Europe's green and digital transition, with the European Commission to focus on unlocking investment in clean technologies and value chains, such as renewables and energy storage technologies - including batteries. The plan includes support for the financing of one million new charging points for electric vehicles (EVs) across Europe and the implementation of a critical raw materials action plan covering e-mobility, batteries and renewable energy.

Altech believes that HPA, as a critical input into lithium-ion battery manufacture, would fall within the scope of the EU action plan. Also, a draft of the European Recover Plan (ERP) included a EUR20 billion EU-wide purchasing facility for clean vehicles and a EUR40-EUR60 billion clean automotive investment fund, to accelerate investments in zero emissions drive trains. Although this level of detail was not included in the final high-level EU ERP communique - it is indicative of strong EU fiscal support for the European EV and renewable energy storage sectors.

Germany however has been more specific in providing details of the EV industry fiscal support that it has incorporated in its economic stimulus package post COVID-19. Germany's EUR130 billion coronavirus stimulus package announced in June 2020 includes the following pillars:

- EUR2.5 billion will be spent on battery cell production and charging infrastructure;

- there is a 50% increase (to EUR9,000/vehicle) on the cash subsidy for EV purchases; and

- it has been mandated that all service stations must offer electric car charging points to help remove refuelling concerns and boost consumer demand for EV's.

The European and German initiatives are expected to provide a significant boost to EV demand along with the broader stimulus plan that included taxes to penalise ownership of large polluting combustion-engine sports utility vehicles. Germany's announcement follows a French initiative announced by President Macron to boost electric car sales within that country. Europe has a very clear commitment to battery-powered vehicles and placing electric mobility as a principal technology of the future.

Managing director, Iggy Tan said that "whilst we have been focussed on completion of finance and the continuation of construction of Altech's first HPA plant in Malaysia, the increased fiscal support for the EV and renewable energy sectors recently announced by the EU and Germany, combined with the forecast HPA supply deficit in coming years, has prompted us to move and secure this excellent HPA plant site in Germany - albeit earlier that I had anticipated. A HPA plant takes 4-5 years to design, permit, fund and construct. To meet the forecast HPA supply deficit Altech needs to be pro-active and put in place a plan for its next plant today, whilst staying extremely focussed on the first facility in Johor.

*To view tables and figures, please visit:
https://abnnewswire.net/lnk/B5E4G7AD


About Altech Chemicals Ltd

Altech Chemical Ltd ASX:ATCAltech Chemicals Limited (ASX:ATC) (FRA:A3Y) is aiming to become one of the world's leading suppliers of 99.99% (4N) high purity alumina (HPA) (Al2O3).

HPA is a high-value, high margin and highly demanded product as it is the critical ingredient required for the production of synthetic sapphire. Synthetic sapphire is used in the manufacture of substrates for LED lights, semiconductor wafers used in the electronics industry, and scratch-resistant sapphire glass used for wristwatch faces, optical windows and smartphone components. There is no substitute for HPA in the manufacture of synthetic sapphire.

Global HPA demand is approximately 25,315tpa (2016) and demand is growing at a compound annual growth rate (CAGR) of 16.7% (2016-2024), primarily driven by the growth in worldwide adoption of LEDs. As an energy efficient, longer lasting and lower operating cost form of lighting, LED lighting is replacing the traditional incandescent bulbs.

    


Contact

Corporate
Iggy Tan
Managing Director
Altech Chemicals Limited
Tel: +61-8-6168-1555
Email: info@altechchemicals.com

Shane Volk
Company Secretary
Altech Chemicals Limited
Tel: +61-8-6168-1555
Email: info@altechchemicals.com

Investor Relations (Europe)
Kai Hoffmann
Soar Financial Partners
Tel: +49-69-175-548320
Email: hoffmann@soarfinancial.com



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