Interview with Martin Stein, CFO of Altech Batteries Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/altech-batteries-asxatc-powers-up-to-seize-the-future-of-the-grid-storage-revolution-5430

Recording date: 27th August 2024

Altech Batteries Limited (ASX:ATC) is positioning itself as a key player in the rapidly evolving battery technology sector, targeting two critical areas of the sustainable energy transition: grid-scale energy storage and enhanced electric vehicle (EV) batteries. With innovative approaches to both segments, Altech presents an intriguing opportunity for investors looking to capitalize on the global shift towards renewable energy and electrification.

The company's flagship CERENERGY project focuses on sodium-chloride solid-state batteries for grid energy storage. This technology offers several advantages over traditional lithium-ion batteries, including longer lifespan, lower maintenance requirements, and improved sustainability due to its use of common table salt as a key component. The project's recently completed bankable feasibility study reveals promising economics, with projected annual free cash flow of €48 million and a net present value of €169 million at a 10% discount rate.

Altech is actively engaging with German utility providers transitioning to renewable energy sources, positioning CERENERGY batteries as a solution for grid stabilization. The company has appointed KPMG to manage financing for the project and is exploring green bonds and government grants to fund the construction of a 120-megawatt-hour plant in Germany.

Complementing its grid storage solution, Altech is also developing the Silumina Anodes project, which aims to enhance EV battery performance. This innovative technology involves coating silicon with high-purity aluminum to create a more efficient anode material for lithium-ion batteries, potentially increasing capacity by 30% compared to graphite-only anodes. A pilot plant in Germany capable of producing 120 kg per day of the Silumina Anodes material is currently being commissioned, with plans to provide commercial samples to major EV manufacturers and battery companies for testing.

To fund the development of both projects, Altech is raising up to A$8.5 million through an entitlement offer, with A$5 million underwritten by a board member, demonstrating internal confidence in the company's prospects.

While Altech's dual-project approach positions it to capitalize on two significant trends in energy technology, investors should be aware of the challenges and risks involved. These include the need for extensive technological validation, potential competition from established players and other startups, and the capital-intensive nature of battery technology development.

The successful commercialization of either project could lead to significant revenue streams and establish Altech as a key contributor to the global sustainable energy ecosystem. The company's engagement with major industry players and its focus on addressing critical pain points in both grid storage and EV applications suggest a well-considered strategy aligned with market needs.

For investors considering Altech, key factors to monitor include progress in customer testing and validation, particularly for the Silumina Anodes project, developments in the broader battery technology landscape, and the company's ongoing financing activities. As with any investment in emerging technologies, thorough due diligence and an understanding of the broader energy landscape are essential.

As the world grapples with the challenges of climate change and the need for efficient energy storage solutions, Altech Batteries represents an opportunity to participate in potentially transformative developments in the battery sector, catering to both stationary storage and electric mobility markets.

View Altech Batteries' company profile: https://www.cruxinvestor.com/companies/altech-batteries

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