Altech Batteries Ltd (ASX:ATC) has crunched the numbers for its definitive feasibility study (DFS) for the Silumina Anodes™️ project, and is calling the results "highly positive".
The study is a core part of Altech's ambitious strategy to establish an 8,000 tonnes per annum alumina-coated metallurgical silicon plant in Saxony, Germany.
Inroads into battery markets
The joint venture between Altech Industries Germany GmbH (AIG (NYSE:AIG)) and Frankfurt stock exchange-listed Altech Advanced Materials AG (AAM), in which Altech holds a 75% stake, will make inroads into the European and US battery technology sectors.
The aim is to produce Silumina Anodes™️, a patented, innovative alumina-coated silicon battery anode material, exclusively manufactured under licence from Altech. The material is tailored to cater to the increasing demands of the electric vehicle and grid storage battery markets.
The Silumina Anodes™️ project, with its capacity expansion from 15 GWh to 120 GWh, aligns with the forecasted 18% compound annual growth rate (CAGR) of silicon in battery anodes until 2035, positioning Altech as a frontrunner in this transitional phase for the industry.
Good financials
The DFS points to a substantial increase in battery energy density by at least 30%. It outlines an estimated capital cost of €112 million and a net present value of €684 million (NPV10), with net cash of €105 million per annum generated from operations.
The projected internal rate of return (IRR) is 34%, with a payback period of just 2.4 years.
Total annual revenue at full production capacity is estimated at €328 million per annum.
Green credentials
The project has been certified as a green project by CICERO, owing to its use of renewable energy, and Altech believes its contribution to sustainability will go well beyond that when it’s up and running.
CICERO assessed the proposed governance procedures and transparency as ‘Good’ and confirmed that the project aligns with all green bond principles.
In assessing the proposed plant design and coating process, CICERO noted: “The plant has near zero Scope 1 and 2 emissions as the plant’s processes, including steam generation, are fully electrified, and it will use renewable electricity sourced from renewable energy certificates”.
To strengthen its market position, Altech has secured non-disclosure agreements (NDAs) with two major German automakers, two American automakers, a US battery materials supply company, and a European battery maker.
The company has revised its preliminary feasibility study (PFS) modelling that the Silumina Anodes™️ project would be a 10,000 tonnes per annum product comprising a 10% silicon mix.
Following feedback from potential customers prioritising the use of existing qualified graphite sources, Altech has shifted its focus exclusively to producing 8,000 tonnes per annum of just the alumina-coated metallurgical silicon, which customers can then mix with graphite.
High-capacity silicon anodes
This adjustment aligns with the industry's move towards integrating high-capacity silicon anodes, overcoming previous limitations such as particle swelling and first-cycle lithium-ion loss.
These innovations are in line with industry trends, as exemplified by Tesla (NASDAQ:TSLA)'s advocacy for silicon in battery anodes due to its significantly higher energy retention capacity compared to graphite.
By decreasing graphite usage, battery manufacturers can either enhance energy density or maintain current levels while reducing costs, a crucial factor given the recent export limitations on lithium-ion battery graphite imposed by China.
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