Altech Chemicals settles $195 million green bond offering to finance HPA plant in Malaysia

The high-purity alumina provider, Altech Chemicals, who aims to become the world’s largest supplier in its segment has entered the conclusive stages of a $195 million listed green bond offering to dispense additional financing for the construction of a planned $400 million high purity alumina (HPA) plant in Malaysia.

The HPA producer has been working with UK structuring agent Bedford Row Capital PLC and Perth-based Bluemount Capital since October’20 to prepare for the offering.

Out of the funds raised, around $135 million will be utilized as secondary debt for construction of the 4,500 tonnes per annum plant in the state of Johor, Malaysia with the balance to be allocated for bond coupon (interest) repayments.

The bond offering will be in counting to a $257 million credit facility already committed by Germany’s state-owned KfW IPEX-Bank.

As is conventional with these types of offerings, it is forecasted that subscriptions for the bonds will be received in several tranches over months, rather than as a single tranche.

The financing method of mining projects which commit to deliver environmental benefits and a more sustainable economy are the situation where Green bonds are increasingly being utilized.

Norway’s Centre of International Climate and Environmental Research precisely judged Altech’s HPA project as “green” in May’20, permitting it to be reckoned by the world’s green bond market investors.

The market size is assumed to be gaining $339 billion, while a large portion of it is functional in Europe.

Norway’s Centre of International Climate and Environmental Research said during the time of the assessment: “Altech’s process does not create substantial amounts of solid or liquid waste that would go to landfill or tailing points.”

“In addition, nearly 100% of the hydrochloric acid used in its chemicals process is recycled and reused in the process plant,” it said.

The HPA production technology of Altech is envisioned to deliver a 49% slash in the carbon footprint of traditional HPA processing, and use 41% less energy.

High Purity Alumina is a treasurable, high margin and highly-demanded product vital to the production of synthetic sapphire for LED lights, semiconductor wafers and scratch-resistant glass used in wristwatch faces, optical windows and smartphone components.

However progressively, HPA is used by lithium-ion battery manufacturers as a separator coating, improving battery performance, longevity and safety.

With the driving strength and growth in the adoption of LEDs worldwide as well as demand from lithium-ion battery manufacturers to serve the surging electric vehicle market, the worldwide HPA demand is predicted to sit at approximately 272,000 tonnes by 2028.