Altech Chemicals is closing in on securing the balance of funds it requires for its high purity alumina project with due diligence on the proposed mezzanine debt facility expected to be completed by the end of November.
The company received an indicative, non-binding mezzanine debt term sheet for a USD$90m drawdown facility from a global investment bank in May and a term sheet for a USD$60 million “stream” finance facility with a US based global alternative investment group in June.
Senior debt provider, German Government-owned KfW IPEX-Bank, has already committed USD$190m for the HPA project, which consists of a proposed Malaysian HPA plant and associated kaolin mine in Meckering, WA.
WorleyParsons Group’s independent consulting arm Advisian was appointed by both the proposed mezzanine debt provider and the proposed stream facility provider as their technical advisor and kicked off due diligence in July.
Should due diligence be successful, the providers will present the HPA project to their respective internal investment committees for final approval.
Altech said it is likely to have commissioned an updated HPA market report from CRU Consulting before the providers make their final decision.
Separately, Altech has completed geotechnical drilling at the company’s HPA site in Johor, allowing it to submit a site development order application to the local authorities.
Once the development order is approved, site earth works, drainage, foundation piling and the construction of a workshop building and of an electrical substation will commence.
Altech Managing Director Iggy Tan said: “The mezzanine debt and stream facility technical due diligence is on track and proceeding as planned.”
“Importantly, the time taken to complete due diligence and to reach finance close will not hinder construction progress, as Stage 1 construction is already funded and will commence imminently. Construction of the company’s HPA plant will run in parallel to finance close.”
Altech will produce high purity alumina at its Johor plant from very pure kaolin clays sourced from a shallow open pit mine near Meckering in W.A, that has enough material for nearly 250 years of production.
HPA is used in high tech applications such as LED lighting, as a separator in lithium-ion batteries and in advanced mobile phones.
By Matt Birney
