ALTECH BATTERIES LTD — Capital/Financing Update 2018

Aug 9, 2018

ASX ANNOUNCEMENT AND MEDIA RELEASE

10 August 2018

ALTECH OFFICIAL GROUND BREAKING CEREMONY AT JOHOR HPA SITE

Highlights

• Ground breaking ceremony at Malaysian HPA plant site marks important milestone

• Australian High Commissioner and German Ambassador to Malaysia unveil official opening plaque

• Ceremony attended by global partners from Malaysia, Germany, Japan and Australia

• Initial Stage 1 construction works commencing

Altech Chemicals Limited (Altech/the Company) (ASX: ATC) (FRA: A3Y) is pleased to announce the completion of an official ground breaking ceremony marking the commencement of Stage 1 construction of its proposed high purity alumina (HPA) plant in Johor, Malaysia.

The ceremony was held on 8 August 2018 at the Company’s Tanjung Langsat HPA plant site and was attended by a range of dignitaries, project stakeholders and Altech’s full board of directors and staff. Dignitaries included the Australian High Commissioner to Malaysia, H.E. Andrew Goledzinowski; the German Ambassador to Malaysia, H.E. Nikolaus Graf Lambsdorff; the Australian Trade Commissioner to Malaysia, Ms Kelly Matthews and the head of the Malaysia/German chamber of commerce Mr Daniel Bernbeck. Stakeholders representatives included executives from KfW IPEX-Bank (senior lender), Euler Hermes (German government export credit agency), SMS group (EPC contractor) and Mitsubishi Corporation (sales off-take partner); representatives from Johor Corporation, the Malaysian Investment Development Authority (MIDA) and key local service providers and suppliers.

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Opening address by Altech managing director Mr Iggy Tan

HPA plant site – Tanjung Langsat, Malaysia

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Altech Chemicals Limited ASX:ATC ABN 45 125 301 206

Suite 8, 295 Rokeby Road, Telephone: +61 8 6168 1555 Subiaco, Western Australia Facsimile: +61 8 6168 1551 6008 Australia Website: www.altechchemicals.com

In his opening address, Altech managing director Mr Iggy Tan thanked the Altech board for its unwavering support for the project and its leadership, both of which have been instrumental in enabling the Company’s HPA project to advance to the significant ground breaking milestone. Mr Tan also thanked Altech’s management and staff, attributing the project’s success to date to the team based culture within the Company. “The success of any organisation is largely due to the workplace culture – within Altech we have fostered a team orientated, dynamic and compassionate culture”, he said.

Mr Tan noted the remarkable achievements of the Company over the last four years , “During a period of slightly less than four years the Company has completed a definitive feasibility study and a final investment decision study for its HPA project; developed and finalised a kaolin to HPA process design; concluded laboratory pilot plant test-work; finalised JORC compliant kaolin resource and reserve estimations; secured and acquired the site for its HPA plant and kaolin mining operation; concluded environmental and development approvals in Australia and Malaysia; executed a 10 year HPA off-take arrangement; negotiated a US$280m fixed-price lump-sum turn-key EPC contract for a 4,500tpa HPA plant; secured senior project finance of US$190m from German Government owned KfW IPEX-Bank and is concluding US$150m of additional project finance initiatives. Many projects struggle to be funded and few projects achieve this kind of developmental success in such a short time fame. None of this would have been possible without the dedication and focus of the team consisting of board members, management, staff, shareholders and all stakeholders,” Mr Tan said.

Mr Tan thanked Altech’s global partners including Mitsubishi Corporation, KfW IPEX-Bank, Euler Hermes, the Malaysian and German Governments and SMS group. He made special mention of the support from major shareholders including the Melewar group headed by Tunku (Prince) Yaacob Khyra and the SMS group.

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Altech’s board of directors, dignitaries and global partner representatives at the conclusion of the ground breaking ceremony, Johor, Malaysia

In his address to attendees, the Australian High Commissioner to Malaysia, H.E. Andrew Goledzinowski congratulated the Company on its achievements to date and acknowledged the bringing together of Australia, Malaysia, Germany and Japan because of the project. He said that Altech’s HPA project is an example of the calibre of high technology investment that Malaysia is encouraging and promoting.

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Altech Chemicals Limited ASX:ATC ABN 45 125 301 206

Suite 8, 295 Rokeby Road, Subiaco, Western Australia 6008 Australia

Telephone: +61 8 6168 1555 Facsimile: +61 8 6168 1551 Website: www.altechchemicals.com

Altech non-executive chairman Mr Luke Atkins said “the Company is very proud to have reached this important milestone of commencing the construction of its HPA plant. This is a real testament to the board and management team and staff of the Company, who have been extremely dedicated and focused.” Mr Atkins also acknowledged the vision, dedication and drive of managing director, Mr Iggy Tan who has been instrumental in bringing the project to fruition.

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Ground breaking shovels

Ground breaking – Altech chairman and key stakeholders

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Australian High Commissioner & German Ambassador Tunku (Prince) Yaacob Khyra addressing the opening

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Mr Iggy Tan with German Ambassador and Australian High HPA plant site, Johor, Malaysia Commissioner unveiling official opening plaque

A video of the ground breaking ceremony is available for viewing via the following link: https://www.youtube.com/watch?v=LtaY_Xo1w_4

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Altech Chemicals Limited ASX:ATC ABN 45 125 301 206

Suite 8, 295 Rokeby Road, Subiaco, Western Australia 6008 Australia

Telephone: +61 8 6168 1555 Facsimile: +61 8 6168 1551 Website: www.altechchemicals.com

Stage 1 construction will now begin at the site and will consist of an initial eight (8) week geotechnical drilling and ground survey program. The objective of the program is to confirm ground conditions and optimise proposed foundation piling. The Stage 1 work package of ~A$10m was executed with SMS group in July 2018 and is being funded by Altech from its recently completed share placement and share purchase plan.

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About Altech Chemicals (ASX:ATC) (FRA:A3Y)

Altech Chemicals Limited (Altech/the Company) 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.

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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.

Current HPA producers use expensive and highly processed feedstock materials such as aluminium metal to produce HPA. Altech has completed a Final Investment Decision Study (FIDS) for the construction and operation of a 4,500tpa HPA plant at the Tanjung Langsat Industrial Complex, Johor, Malaysia. The plant will produce HPA directly from kaolin clay, which will be sourced from the Company’s 100%-owned kaolin deposit at Meckering, Western Australia. Altech’s production process will employ conventional “offthe-shelf” plant and equipment to extract HPA using a hydrochloric (HCl) acid-based process. Production costs are anticipated to be considerably lower than established HPA producers.

The Company is currently in the process of securing project financing and recently announced the execution of an agreement with its appointed EPC contractor SMS group, for Stage 1 construction of its proposed HPA plant at Johor, Malaysia.

	For more information, please contact: Corporate 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 Wir sprechen Deutsch.
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Forward-looking Statements

This announcement contains forward-looking statements which are identified by words such as ‘anticipates’, ‘forecasts’, ‘may’, ‘will’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, ‘plan’ or ‘intends’ and other similar words that involve risks and uncertainties. Indications of, and guidelines or outlook on, future earnings, distributions or financial position or performance and targets, estimates and assumptions in respect of production, prices, operating costs, results, capital expenditures, reserves and resources are also forward-looking statements. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions and estimates regarding future events and actions that, while considered reasonable as at the date of this announcement and are expected to take place, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, the directors and management. We cannot and do not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this announcement will actually occur and readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are subject to various risk factors that could cause actual events or results to differ materially from the events or results estimated, expressed or anticipated in these statements.

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Altech Chemicals Limited ASX:ATC ABN 45 125 301 206

Suite 8, 295 Rokeby Road, Subiaco, Western Australia 6008 Australia

Telephone: +61 8 6168 1555 Facsimile: +61 8 6168 1551 Website: www.altechchemicals.com