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April 13th, 2023 | 10:57 CEST

Almonty Industries, Rheinmetall, Mercedes-Benz Group - Why the metal tungsten is pushing the energy transition

  • Mining
  • Tungsten
  • Electromobility
  • renewableenergies
Photo credits: pixabay.com

South Korea is supporting its economy by building new nuclear power plants. In this context, the country has entered into a cooperation with Great Britain to jointly use and further develop renewable energies and their technologies. For Almonty Industries, this means two more potential customers for its mineral, tungsten. Due to its extreme resistance, tungsten is also used in the construction of nuclear reactors. Meanwhile, Rheinmetall has won a new major order from China. And the Mercedes-Benz Group share also bodes well for global sales thanks to Q1/23 results.

time to read: 4 minutes | Author: Juliane Zielonka
ISIN: ALMONTY INDUSTRIES INC. | CA0203981034 , RHEINMETALL AG | DE0007030009 , MERCEDES-BENZ GROUP AG | DE0007100000

Table of contents:


    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

    Full interview

     

    Almonty Industries: South Korea is betting on nuclear power - tungsten is essential

    South Korea has teamed up with the UK for cooperation on the energy transition. In addition to renewables such as offshore wind, both nations are relying on nuclear power to provide a secure supply for the economy and population. According to the official press release, the partnership will last for 30 years and covers topics such as nuclear energy as a source for creating safe, affordable and clean energy. Working together and promoting the highest standards of nuclear safety is paramount, as is creating robust and resilient nuclear supply chains.

    And this is precisely where the mineral tungsten comes into play. Tungsten is one of the elements with the highest melting point, which makes it a particularly attractive material for use in fusion reactors. Mixing tungsten with metals such as nickel and iron creates an alloy tougher than tungsten alone while withstanding a high melting temperature. With this combination of materials, the next generation of nuclear fusion could take off, as researchers have published in a recent paper. Investors such as Jeff Bezos, Bill Gates and Peter Thiel have already invested billions of euros in the innovative technology.

    Almonty Industries is a global mining company focused on the mining and exploration of tungsten. Its mines are located in Spain, Portugal and South Korea. Almonty's site is located 187 km southeast of Seoul, about a three-hour drive via motorways and well-developed highways. The re-commissioning of the Sangdong mine and related underground works continue to be on schedule for commissioning in 2024. It will be the world's largest tungsten mine outside China.

    CEO Lewis Black's composure is evident as he explains, "We are building a mine that is set to become the hub of Western tungsten production, and plans must be executed with care and consideration, as we are doing." I am also pleased to report that the tungsten price has remained strong against a backdrop of rising demand. The last observed price was EUR 307.85/MTU on 24 March. This strong price, combined with our unprecedented minimum price guarantee in our contract with offtake partner Plansee GTP of EUR 214.98/MTU (uncapped), has the potential to generate truly spectacular returns for our shareholders once commissioning commences."

    For investors who want to take a closer look at Almonty, the 7th International Investment Forum (IIF), is a great opportunity. CEO Lewis Black will be available to all interested parties during a live presentation followed by a Q&A session. Registration is free; click here.

    Rheinmetall: New major order from China for electric car components

    Tungsten is also used in the defence industry and electromobility. Industrial giant Rheinmetall is pleased to announce a new major order outside Europe: the Chinese carmaker SAIC Motor has commissioned the Group to produce engine blocks for hybrid vehicles. The order volume is in the double-digit millions and includes 500,000 production pieces. The components will be produced using the gravity casting process. Production is scheduled to start in China in 2024. This cooperation underscores Rheinmetall's expertise in the field of automotive production and strengthens the Group's position in the international market.

    Rheinmetall is currently experiencing a rising number of orders for components and systems that enable advanced and environmentally friendly mobility. Each new order represents a significant step in meeting the challenges of the industry on the path towards full electromobility.

    Mercedes-Benz: Sales in Q1/22 driven by electric and top-end vehicles

    Mercedes-Benz recorded an increase in sales of battery electric vehicles in the first quarter of this year. With 51,600 units (+ 89%), they achieved a 10% share of total sales, compared to 6% in the same period last year.

    BEV sales in the Passenger Car Division (excluding Smart) doubled in the first three months (+ 119%). The entry-level electric vehicles were also very popular: the EQB model recorded a 189% increase in sales, the EQA model had a 64 % increase, and the EQS SUV reached 5,500 units.

    In the US, sales of battery electric vehicles increased by 327%, and in Europe by 41%. "Our customers' desire for our top-end products and battery electric vehicles is the driving force behind our first quarter sales performance. In addition, we have successfully launched our direct sales model in the UK, while Germany and two other markets will follow in 2023. Looking ahead, I am already looking forward to the upcoming world premiere of the first all-electric Mercedes-Maybach EQS SUV next week," explains Britta Seeger, Member of the Board of Management of Mercedes-Benz Group AG. Sales in the rest of the world were impacted by Mercedes-Benz's decision to discontinue its business activities in Russia from March 2022.

    The share of the Stuttgart-based automotive group is currently trading at EUR 69.51, up from the previous day's closing price of EUR 68.88. After a few weaker days, things are looking up again for the Mercedes-Benz Group. However, it remains to be seen whether this positive trend will continue. Currently, the share is in seventh place in the DAX with a gain of 0.91%. The overall index has moved up by 0.09%.


    Sales of Mercedes-Benz electric vehicles are enjoying great popularity worldwide. The Stuttgart company scores particularly well in the luxury segment and with BEV models. Rheinmetall is also doing well in business outside Europe. With its major order for components for the Chinese electric vehicle manufacturer SAIC, the producer known for armaments, is positioning itself more and more in the supplier sector for the energy transition. Almonty Industries is also doing well. The commissioning of the tungsten mine in South Korea will start in 2024. The country itself is counting on the expansion of nuclear energy, and thus the customers for the metal are right on Almonty Industries' doorstep. The opportunity to get in now seems to be right.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Juliane Zielonka

    Born in Bielefeld, she studied German, English and psychology. The emergence of the Internet in the early '90s led her from university to training in graphic design and marketing communications. After years of agency work in corporate branding, she switched to publishing and learned her editorial craft at Hubert Burda Media.

    About the author



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