A prefeasibility study (PFS) into a 10 000 t/y silicon/graphite alumina coating plant, in Germany, has proven positive for ASX-listed Altech Chemicals.

The company on Wednesday told shareholders that the plant, which will be constructed by Altech Industries Germany (AIG), would produce high capacity silicon/graphite battery anode materials known as Silumina Anodes, under exclusive licence from Altech.

The PFS estimated that the project would require a capital investment of $95-million, and would have a net present value of $507-million, generating net cash of $63-million a year from operations. The project’s internal rate of return has been estimated at 40%, with a payback period of just over three years.

At full capacity of 10 000 t/y, the project is expected to generate $185-million in yearly revenue.

“Whilst Altech’s top priority continues to be financing its Johor high purity alumina (HPA) project, the Silumina Anodes project represents an exciting downstream opportunity to utilise its HPA coating technology in silicon/graphite battery materials,’ said Altech MD Iggy Tan.

“We are pleased and excited about the results of the 10 000 t/y Silumina Anodes PFS. Due to the attractive economics of the study, a decision has been made by the AIG board to immediately progress to a definitive feasibility study (DFS) for the project. AIG has already purchased land in Germany suitable for the project, and the plan is for the AIG team in Saxony to immediately commence DFS work. We believe that the production of Silumina Anodes materials could be a game changing technology for the lithium-ion battery industry.”