Altech DFS predicts AU$5b EBITDA for anodes project

Altech Batteries has forecast a stunning project life EBITDA of more than €3.08 billion (AU$5 billion) for its 8000 tonnes per annum Silumina Anodes project in Germany after the completion of a definitive feasibility study (DFS).

The facility will produce patented alumina-coated silicon battery anode materials known as Silumina Anodes in a strategy aimed at meeting high demand in the European and United States electric vehicle (EV) and grid storage battery markets.

The project study outlines a solid internal rate of return of 34 per cent with a predicted payback period of about 2.4 years, while the pre-tax net present value has been estimated at €684 million (AU$1.11 billion).

The total annual revenue for the project when operating at the full rate of production is expected to reap in an impressive €328 million (AU$532.6 million) per year.

Altech has already executed non-disclosure agreements with two German automakers, two US automakers, one US battery materials supply company and one European battery maker.

Management says a decision to remove graphite from the DFS triggered an output increase to 8000 tonnes per annum of alumina-coated silicon. The modified study, which reveals the increase from 1000 tonnes per annum, is in response to customer preferences and has been achieved with no change to the plant or equipment.

A previous preliminary feasibility study (PFS) released in April last year outlined the plant’s 10,000 tonnes per annum output based on a 10 per cent mix comprising 1000 tonnes of the company’s Silumina metallurgical silicon product coated with high-purity alumina (HPA), blended with 9000 tonnes of graphite, also coated with HPA.

However, Altech says customers expressed a preference for using their own qualified graphite sources, prompting the move to modify its latest study with the production of only its HPA-coated silicon product.

Management has licenced its proprietary HPA coating technology to its 75 per cent-owned subsidiary, Altech Industries Germany. The company has expanded the project's output by eightfold, increasing the capacity from 15 gigawatt-hours (GWh) to 120 GWh, all with the same plant and equipment.

According to the DFS, capital costs for the project are estimated at €112.5 million (AU$182.7 million) with the major component based on the construction of the production facility and associated infrastructure. Management says the engineering design and cost estimate for the battery materials coating facility has been based on the process design and equipment required to process 8000 tonnes per annum of anode materials and utilises equipment design and building layouts specifically developed during the DFS.

The estimated construction period of the plant is 24 months, while the production ramp-up is expected to be about three years.

Altech says that while its research indicates there is a marginal advantage in using alumina-coated graphite in batteries, such as reducing first-cycle loss, the cost-to-reward ratio for graphite is relatively minimal. It believes the primary appeal for potential customers lies in integrating its HPA-coated silicon into their battery products.
Management says its “all silicon” adjustment to the DFS has led to substantial improvements in its bottom-line economics and that its most notable advantage lies in the company’s ability to crack the silicon code, preventing expansion defragmentation and curbing the significant first-cycle losses usually associated with silicon. Additionally, it expects to achieve an increase of at least 30 per cent in battery energy density.

The move away from heavy graphite use is expected to be a positive one for Altech given the current strong reliance of the largely graphite-based battery industry on major international supply sources, which many industry observers believe are likely to become less stable in the near-to-medium term.

Management believes its technology will be a “game changer” that could pave the way for increased lithium-ion battery energy density, battery lifespan and reduced first-cycle lithium loss.

Land for the project has been purchased within the Schwarze Pumpe Industrial Park, about 120km from Berlin and only 78km from Dresden in a total area of 14 hectares. The company is also in the final stages of construction for its pilot plant, which will support the qualification process for the Silumina Anodes product.

With a forecast 18 per cent compound annual growth rate for silicon in battery anodes until 2035 and positive economics from its latest study, Altech could be on verge of becoming the next big thing in the EV supply chain.

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