ATC builds presence in Malaysia with new subsidiary company
High Purity Alumina (HPA) focussed Altech Chemicals (ASX:ATC) has recently incorporated a wholly owned Malaysian subsidiary company ‘Altech Chemicals Sdn Bhd’, following the recent decision to select Johor Bahru in Malaysia as the preferred located for its proposed HPA processing plant.
ATC is currently undertaking a Bankable Feasibility Study (BFS) for its project. The company plans to process an aluminous clay deposit in Meckering, Western Australia into 25,000 tonnes per annum of aluminous clay concentrate, which will be used as feedstock at the HPA processing plant in Malaysia.
Recent BFS work has seen the company optimise the beneficiation process for the Meckering deposit. Wet processing has been selected over dry, which allows the company to take advantage of the superior alumina recovery, lower capital and operating costs, and improvements in concentrate alumina grades that wet beneficiation offers.
ATC also recently raised just over $400,000 to support the continued development steps for its HPA plant.
ATC is aiming to become a leading global supplier of HPA, a key ingredient in the next generation of electronics – especially in “sapphire glass” which is used in smart phone displays.
The company has secured large feedstocks of aluminous clay in Western Australia and developed a patented refinement process that can produce 4N 99.99% pure HPA which sells for up to $50 a kilogram.
ATC can now access Malaysian tax incentives
The company was formally advised of the Malaysian incorporation on January 6th, 2015, and is a key step in establishing a presence in Malaysia.
Importantly, the incorporation of its Malaysian subsidiary will enable the company to advance the required documentation associated with the construction and operation of the proposed HPA plant.
ATC can now make submissions to the Malaysian Investment Development Authority (MIDA) for various investment and tax incentives which would otherwise be unavailable to the company.
ATC Managing Director commented on the news: “the government of Malaysia in general strongly encourages foreign direct investment (FDI), it actively reaches out via MIDA to targeted industries and negotiates incentive packages to attract FDI, which is highly encouraging.”
BFS for HPA plant moves forward
The company is aiming to establish an HPA processing plant in Malaysia to supply the material to the Asian market and beyond. A Bankable Feasibility Study for this plant is underway and has established an optimised production rate of 4,000tpa.
In addition to recent optimisation of the beneficiation process, an Integrated Plant Study for ATC’s proposed operation said the company could produce HPA using its in house method for $8.60 a kilo, much lower than reporter competitor costs of up to $17.50 a kilo.
Now, ATC says the optimised production rate of 4,000tpa could provide further economies of scale and lower its production costs even further.
ATC’s managing director, Iggy Tan says the plant’s BFS is progressing steadily. “The HPA plant design output optimisation was an indisputable conclusion that supported a number of significant cost benefits through further economies of scale,” he says.
“We are pleased with the adjusted annual tonnage and progress of our BFS remains on schedule for targeted completion during Q3, 2015.”
One for four shares offer raises over $400,000
ATC offered its shareholders a pro-rata non- renounceable entitlement offer of one new share at $0.10 for every four shares held at the record date with one (1) free-attaching listed option with an exercise price $0.10 for every new share subscribed.
This in-house offer closed on the 19th of December 2014 and ATC received valid applications for 3,467,735 new shares and application for 560,000 shares under the Shortfall Offer. This included an application for 250,000 shares from a related party to managing director Iggy Tan.
$402,774 was raised – a positive result within the context of the current market environment.