ALTECH BATTERIES LTD — Investor Presentation 2018

Jun 4, 2018

Altech Chemicals Limited ASX: ATC FRA:A3Y

Company Presentation June 2018 Iggy Tan Managing Director

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World leading producer of high purity alumina (HPA)

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Our Vision

4,500 tonnes pa

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• Sapphire gemstone

• O

• Natural form of high purity alumina (HPA) Al2 3

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Sapphire
Gemstone
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• Formed by mother nature like diamonds

• Colour from impurities

• Nearly as hard as diamond (Mohs 9)

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• Purified alumina O (Al2 3)

• 99.99% (4N) purity or greater

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• Smelter Grade Alumina (SGA) ~ 99.5% (5,000ppm impurities, mainly sodium)

• Bayer Process uses sodium hydroxide (NaOH)

What is HPA?

• Sodium impurity is a problem for sapphire and lithium batteries

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Smelter Grade High Purity Alumina Alumina SGA 99.5% HPA 99.9% (3N) US$400 per t US$6,000 per t Our Target Business

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High price High Purity High Purity Alumina Alumina HPA 99.99% (4N) HPA 99.999% (5N) for purity US$27,000 per t US$50,000 per t

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LEDs & LITHIUM-ION BATTERIES

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Sapphire Furnace (2,000 [o] C)
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Sapphire Crystal Boule Sapphire Wafer LEDs

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Nano Powder

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LITHIUM-ION BATTERIES

Separator Coatings

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Light Emitting Diode

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LED Expansions

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Xiamen Changelight Purchases AIXTRON MOGVD Technology to Expands ROY LED Production

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Sapphire Glass

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HTC U Ultra o February 2017 o Sapphire crystal display

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iPhone o Sapphire crystal lens o Finger print recognition

sapphire screen

Sapphire Glass Scratch Test

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Global High Purity Alumina Forecast 2016 -2024

Source: Persistence Market Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2024”

86,831

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75,637
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HPA Comsumtion tpa
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65,036
55,350
46,748
39,786
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34,328
29,669
25,315
21,309
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
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Demand for HPA

• 13 times ATC’s 4,500 tpa required to meet growth

• Global LED demand increase to 4.1 B units by 2024 (2015: 864 million)

Source: Navigant Research “LED Lighting: Global Outlook”

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Battery Energy Density vs Temp

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Battery costs are reducing due to increased energy density

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Higher
Operating
Temperatures
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Cathode changes increases energy density Consequence – higher operating temperatures

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[[o]] C
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Normal Polymer Separators

Polypropylene (PP) 155[[o]] C <135[o] C Polyethylene (PE) 135[o] C Polypropylene (PP) 155[o] C HPA layer >200[o] C Polymer membrane HPA Coated Separators (HPACS)

HPA required for higher

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HPA Coated Separators (HPACS)

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W Scope Sales Data
Coated Non-Coated
100
90
80
70
60
50
40
30
20
10
0
Q1'17 Q2'17 Q3'17 Q4'17 Q1'18
Sales (%)
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Japanese separator manufacturer reports 40% HPA coated separators 11% only 12 months ago

• HPA coated separator rapid penetration rates

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• 1.6kg HPA for average EV car (40 KWh)

• 6.4kg HPA for EV Bus (160 kWh)

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GLOBAL SEPARATOR HIGH PURITY ALUMINA DEMAND (2015-2025) 99.99% HPA Used in Lithium Battery Separators

Source: Altech Chemicals & Deutsche Bank Markets Research Industry Lithium 101 - 9 May 2016

Number of ATC 4,500tpa HPA plants required

Forecast

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HPA Separators Demand Forecasts

HPA Separators Demand Equivalent Number of Organisation Forecast 2025 (tpa) Altech HPA Plants Altech Chemicals 15,102 3.4 x Petra Capital (mid case) 37,500 8.3 x CRU 76,000 16.9 x Average 42,867 9.5 x

• CRU even most bullish on separator HPA growth

• Ave forecast of 43k tpa HPASC by 2025 (9.5 times ATC plant)

Total HPA Demand Forecast (inc LEDs) Organisation Total HPA Demand Equivalent Number of Forecast (tpa) 2025 Altech Plants Persistence 62,519 14 x Petra Capital 122,000 27 x CRU Consulting 92,900 20 x Average 92,473 20 x

• Ave forecast of 92k tpa by 2035 (20 times ATC plant)

• • No incumbent expansions announced

• • New entrants 4-5 years behind

• • Demand will outstrip supply

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• HPA producers – Chemical companies China (3), Japan (2), South Africa (1) France (1)

Sumitomo Chemicals

(Japan) 3,020 Others (15), 3,570 Sasol Current HPA (South Africa) Huantou, 800 1,800 Dailian Rall, 600 Producers Nippon Light Metal (Japan), 1,100 Hebei Pengda (China) Baikowski (France) 3,000 1,200 Xuancheng Jing Rui Zibo Xinfumeng (China) (China) 1,200 2,500

Source: Technavio Research

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Altech’s Differentiation

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Current HPA Producers
Alumina Alumina Aluminium
Refinery Smelter Dissolution
Bauxite Smelter Grade Alumina Aluminium Metal 99.99% (4N)
99.5% ~US$3,000 per tonne HPA
ALTECH HPA PLANT
One Single Process Step
Kaolin
99.99% (4N)
(aluminous clay) HPA
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• Very low iron (Fe) due to weathering

• 12.7Mt JORC Mineral Resources^ (250 yrs)

• Measured Resources 1.5Mt @ 30% Al2O3

• Indicated Resources 3.3Mt @ 30% Al2O3

• Inferred Resources 7.9Mt @ 29.1% Al2O3

• Deposit in Western Australia

%	Bauxite Darling Range*	Canadian HPA Project	Altech HPA Project
Al2O3	34.5	22.77	30.5
SiO2	21.5	53.29	56.3
**Fe2O3 **	21.2	8.36	0.7
**TiO2 **	2.00	0.98	0.7
K2O	0.24	3.41	0.1
**NaO **	0.005	1.42	0.1

Low-Impurity Kaolin Feedstock

• Typical Mean Analysis

• ^ JORC (2012) Mineral Resources (refer ASX Announcement 11 October 2016); the Company is not aware of any new information or data that materially affects the information included in this announcement and confirms that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.

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• Mining approval granted

• Works approval granted

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• Simple free dig mining

• Campaign mining, 2 months for 3 years of feed

• Then simple sea container loading operation

• Fremantle to Johor easy shipping

in West Aust

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• Chemical-zoned industrial park

• 60% lower operating costs

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• HCl plant nearby

• Services, natural gas, electricity, water

• Access to 17[th ] largest container port

• Environmental approval completed

Malaysia

• 5-10 year corporate tax free

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Johor HPA Plant
Admin
Site Entry
Maintenance
MCC
Kaolin
Beneficiation
Silica Residue
Acid Leach
Warehouse
Pelletising
HCL Recycling
Crystallisation
Roasting
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Altech’s HPA Process

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ROM
Sea Container To Fremantle Campaign Mining MECKERING
Shipping
Sea Container Meta Kaolin
Flash
JOHOR Dryer Hydrochloric Acid
Screening Filter Cooler
Calciner Milling HCl Gas
Polishing
Screening Filter Filter
700 C
Drum Scrubber > 0.3mm
Quartz Oversize
Acid Leach Stage 1 Crystalisation
Sales
Limestone & Lime
Neutralised
99.99% Cooler Jet Mill Spray Silica Residue Centrifuge
HPA Battery Grade Option Dryer
Beads
1600 C Neutralising Al Cl3
Packaging Sales Filter Tank Crystals
Cooler
Tunnel Kiln Pelletiser Feed Tank
HCl Plant
HCl HCl Gas water HCl water
Alpha Al2O3 Gas
1250 C 700 C Centrifuge Centrifuge
Screen HX
Cooler Calciner Roaster Al Cl3 Al Cl3
Bead Mill Wash Stage 3 Polishing Stage 2
Crystalisation Filter Crystalisation
HCl Wash HCl Wash
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• Chemistry established in 1900s by Swiss

• US Govt & Alcoa developed further 1980’s

• Limited demand for HPA in 1980’s

• New HPA growth demand (LEDs, LIBs)

Established

• Altech applied open chemistry to Meckering

• Very successful, disruptive, lowest cost

• Two patents for processing technology

• –

• New entrants possible breach of Altech patents

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Managing Technical Risks

Lab PilotWork	Lab PilotWork	Lab PilotWork
	Typical/Testwork	Current Design
Utilisation	90%	79%
Recovery	90%	60%
RampUp	2 Years	3 Years
Feed Rate	34% Al2O3	30% Al2O3
EngDesign Margin	+15-20%	+20-30%

Conservative design assumptions reduces technical risks and builds robustness

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• Pre-tax NPV7.5 US$ 505 million

• Payback (full rate) 3.9 years

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• EBITDA US$ 76 million p.a.

• Capital cost US$ 298 million

• Production Costs - US$ 9.90/kg

• LT Sale Price - US$ 26.9/kg

• Gross Margin – 63%

FIDS

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• Current price in Japan - US$ 40.0/kg

• Pre-tax NPV7.5 US$ 1.1 billion

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Current Case
Economics
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• Internal Rate of Return (IRR) 33%

• Payback (full rate) 2.2 years

• EBITDA US$ 133 million p.a.

• Production Costs - US$ 10.50/kg

• Sale Price - Gross Margin – 74%

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• Competitors

1. We own our feedstock

2. Main reactant HCl re-used

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3. Plant in low cost country (Malaysia)

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Altech
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Quartile

Source: Persistence Market Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2024”

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• Off-take sales agreement with Mitsubishi

• First 10 years of HPA operations

• Secures sales for HPA plant production

Mitsubishi

• Exclusive global distributor

• Experienced with HPA

• Strategic priority: lithium-ion batteries

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• SMS group German EPC contractor

• Lump sum turn key contract

• Completion and cost risk

• Throughput guarantee

• Process & quality guarantee

• Third largest user of ECA finance

Contract

• Committed US$ 15 million equity

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• Debt funding with KfW IPEX-Bank

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Debt
Funding
Successful
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• Total debt of US$ 190 million

• US$ 170 million export credit finance

• 50% of plant – German suppliers

• Low interest, long tenure

• Best debt in the world

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Three work streams

• 1) Subordinated mezzanine debt

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• Target of US$90-120m mezz debt

• First term sheet received of US$90 m

• 2) Equity work stream

• Lead - Petra Capital

Funding

• 3) Possible JV Partner

• Partial project sell down

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Altech Chemicals Limited Market Capitalisation - end of month ($m) $100.0

$90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $-­‐

Altech Growth Performance

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• 10 x steady market cap growth (3 years)

• Ave trade value $2k/day to $350k/day

• 350% increase in shareholders to 2,500

• $7 m cash end March 2018, no debt

• 426 m shares on issue

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Right Place Right Time Right Feedstock Right Technology

Thank you

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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 our 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.

Competent Persons Statements – Meckering Kaolin Deposit

The information in this announcement that relates to Mineral Resources and Ore Reserves is extracted from the report entitled “Maiden Ore Reserve at Altech’s Meckering Kaolin Deposit” released on 11 October 2016; the report is available to view on the Company’s website www.altechchemicals.com. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources and Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.