Worth Watching VI: Altech Chemicals Ltd (ASX: ATC)
Back in the day, I developed a sulphur dioxide (“SO2”) leach process to produce electrolytic manganese dioxide (“EMD”), from a ferromanganese feedstock. EMD is the active ingredient in dry cell batteries. The leach process was lower cost than existing technologies. And far less polluting.
We built a pilot plant at Murdoch University, in Western Australia. EMD from the plant was sent around the world to potential customers. Producers of brands such as Energiser, Duracell and Varta. In all cases, the product was suitable for use in premium batteries.
But there was a catch, as can happen with specialty products. No end users would enter into an offtake agreement until they had tested product from the full scale plant. I had JP Morgan backing me for debt, and they had ticked off everything but security for a loan. That would be either offtake agreements, or a robust balance sheet supported by cashflow. We had neither at the time. The rest of the story is a topic for another time.
The point is that Altech has developed a comparable process. Production of high purity alumina (“HPA is Al2O3” – natural forms include sapphire and ruby) from kaolin clay by a hydrochloric acid leach (“HCl”). By co-incidence, I am currently working on a project that includes an HCl leach process to produce high purity TiO2 from ilmenite.
HPA is used in LED lights, semiconductors, and a growing use is smartphone glass. The company has announced that it has completed a Bankable Feasibility Study, but does not appear to have produced HPA for end user testing. Neither is there indication of where, how and by whom the project would be financed.
Watch this company. If they do get the required financing, it could be a game changer for both ATC and the industry.
My “Worth Watching” series is a brief review of companies that appeal to me. They are not based on in-depth research and are in no way a recommendation to buy or sell shares. The reader is advised to do their own research and/or consult with their broker.