The Altech Chemicals Ltd (ASX: ATC) share price is rocketing today despite the big plunge in the market.
The ASX small cap battery tech company announced it has formed a joint venture (JV) with Germany battery institute Fraunhofer IKTS (IKTS).
The JV will commercialise IKTS' Cerenergy Sodium Alumina Solid State (SAS) battery. The technology uses table salt instead of lithium.
Image source: Getty Images
How the Altech share price compares to ASX lithium shares
The news sent the Altech share price surging 31.3% to 11 cents in afternoon trade. In contrast, the All Ordinaries (ASX: XAO) tumbled 2.35% as inflation fears trigger a sell-off in global share markets.
Even popular ASX lithium shares could not withstand the negative sentiment. The Allkem Ltd (ASX: AKE) share price has lost 2.1% to $15.66, IGO Ltd (ASX: IGO) has fallen 1.84% to $14.68 and Pilbara Minerals Ltd (ASX: PLS) dropped 2.2% to $4.64 at the time of writing.
Large market opportunity
But the Altech share price is powering ahead as the company tabled the JV agreement. The ASX minnow will own 75% of the entity, which will commercialise a 100MWh project on Altech's land in Germany.
The company thinks the SAS battery is perfect for grid storage as it is fire- and explosion-proof. The battery can also operate in extreme cold and desert conditions and has a lifespan of more than 15 years.
Altech claims that the global grid energy storage market is expected to grow to US$15.1 billion by 2027, from US$4.4 billion in 2022.
New battery technology powers the Altech share price
As the battery only uses sodium and nickel, the surging price of lithium won't impact on costs of the battery. It also doesn't use cobalt, graphite or copper.
IKTS spent eight years and 35 million euros on the SAS technology, which is undergoing final testing.
The JV entity, Altech Batteries GmbH (ABG), will own the exclusive global rights to the SAS technology and the Cerenergy trademark. IKTS will not receive a royalty but will be awarded 25% ownership of the JV as a "free carry".
Details of the JV
IKTS will also give Altech access to its pilot plant and expertise associated with the technology. The German partner has the right, but not the obligation, to maintain its 25% interest if the JV expands the project.
IKTS also has the right to convert its 25% interest in the expanded project to a 1.5% royalty of all future battery module sales.
Altech said in its ASX statement:
IKTS has been looking for an entrepreneurial partner that has German land available, has access to funding, is a builder of projects, has battery background, and has technology in alumina used in ceramics. Altech fitted the criteria.
The Altech share price snapshot
The Altech share price was trading flat over the past year before today's surge. In contrast, the All Ordinaries dropped 8.5% over the period.
ASX tech shares have also not been performing well since interest rates and bond yields came off their historic lows.
Higher rates hit ASX growth shares harder and tech is seen as the quintessential growth sector.
Luckily for Altech, its link to batteries is shielding it from the sell-off as the world moves towards a decarbonised future.
