Perth, July 18, 2017 AEST (ABN Newswire) - Altech Chemicals Limited (Altech/the Company) (ASX:ATC) (FRA:A3Y) is pleased to provide an update on the transition of engineering, procurement and construction (EPC) for its proposed Malaysian high purity alumina (HPA) plant, from the previously appointed EPC contractor to German engineering firm SMS group GmbH (SMS).

Highlights

- Transfer of all engineering data to SMS group's EPC team successfully completed

- Key engineering personnel remain available to assist SMS's team

- High quality engineering work by previous contractor and excellent co-operation

- Site visit by SMS's project team to Johor, Malaysia completed

- EPC fixed price estimate well advanced

On 16 May 2017, the Company announced the appointment of SMS as EPC contractor for the construction of its proposed Malaysian HPA plant. SMS will provide a fixed price turnkey contract and has proposed a clear and concise guarantee to Altech for plant throughput. In addition, having prior experience with the kaolin-HPA hydrogen chloride processing technique that Altech will use, SMS has proposed process and final product guarantees that will strengthen Altech's export credit project finance cover application. The additional guarantees proposed by SMS are extremely positive outcomes that significantly mitigate project risk.

By mutual agreement, the previously appointed EPC contractor has now completed the transfer of all engineering data and information to the SMS/Altech project team. A week-long formal handover was completed in Dusseldorf, Germany during which incoming discipline team leaders were extensively briefed by their respective outgoing counterparts and Altech. Importantly, key-person engineering personnel continue to be available to assist the SMS/Altech team and ensure efficient and complete information handover. The managing director of SMS's Process Technologies division, Mr Herbert Weissenbaeck heads its project development team, with various leaders appointed for each of the key disciplines.

The EPC handover cumulated with a visit by key EPC team members to the Tanjung Langsat Industrial Complex, Johor, Malaysia to inspect the site secured by Altech for the proposed HPA plant. Key local design, permitting and environmental consultants were introduced to the SMS team, and the proposed laydown areas and construction support infrastructure were inspected. SMS, having recently successfully completed the Sakura smelting project, in Sarawak, Malaysia, has an established Malaysian subsidiary that is ideally placed to supervise the construction of Altech's HPA plant.

During the transition, SMS commented on the quality of the engineering work completed before its involvement in the project, and the professional co-operation during handover. Likewise, Altech acknowledges the previous engineering contractor for the quality of its work, its professionalism, co-operation and support.

The managing director of SMS's Process Technologies, Mr Herbert Weissenbaeck said that the engineering completed so far is of a quality compliant with the standards expected from a well-established German plant builder. "We have conducted a review of most of the proposed plant and process and we are confident the process proposed by Altech will be successful at producing the targeted 99.99% quality alumina. The engineering is well progressed and generally meeting our high standards. Information and knowledge transition from the previous contractor is proceeding well. As announced on 12 July 2017, SMS participated in a US$100,000 placement of shares as a demonstration of our confidence and support of the project."

SMS will continue finalising the EPC capital cost estimate for the HPA plant, which is well advanced and expected by the end of the current quarter.

Commenting on the transfer to SMS as EPC contractor, Altech managing director Iggy Tan said, "The process of transitioning to SMS has been very smooth, with the extensive amount of engineering data successfully transferred from the previous engineering contractor. As we stated previously, SMS has been able to pick-up the detail design work where it was left, with minimal re-work required. SMS's immediate focus is to provide an indicative EPC fixed price so that Altech can proceed to finalise its export credit finance (ECA) application, which we are aiming to do by the end of the current quarter. SMS has extensive experience with German ECA cover and is amongst the top three users of this facility in Germany, so it is very familiar with the export credit approval process."

SMS group

SMS is a large privately owned German engineering company with an annual turnover of approximately 3.3 billion Euros. SMS builds turnkey solutions based on innovative plant technology, complete with buildings, infrastructure and auxiliary equipment for processing plants such as Altech's proposed HPA plant. SMS was founded in 1871 and is based in Dsseldorf, Germany with office locations worldwide. SMS has recent EPC contract experience in Malaysia, having successfully completed the Sakura smelting project, in Sarawak.

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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

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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