Close menu




January 23rd, 2023 | 10:15 CET

Almonty Industries, ThyssenKrupp, Volkswagen - Tungsten: The raw material for high-tech applications!

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

Tungsten is a rare and valuable metal with a high melting point, hardness, corrosion resistance and good electrical and thermal conductivity. It is widely used in industry, national defence and high-tech applications. An important use of tungsten is in alloys, especially steel, where it increases the melting point, hardness and wear resistance. Now applications could be expanded even further. Researchers have developed a cathode material made from a molybdenum tungsten niobate alloy that can be used to charge electric cars in minutes.

time to read: 5 minutes | Author: Armin Schulz
ISIN: ALMONTY INDUSTRIES INC. | CA0203981034 , THYSSENKRUPP AG O.N. | DE0007500001 , VOLKSWAGEN AG ST O.N. | DE0007664005

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 - Sangdong mine opening is drawing near

    Since 2020, the price of tungsten has been rising slowly and steadily. If tungsten succeeds in charging electric vehicles much faster, one problem of the new technology would be solved. At the same time, demand would pick up significantly, even though global production has declined over the past 7 years. The main producers are China and Russia, which are not considered reliable partners. In order to become independent, production in other countries is needed. Almonty Industries has the largest tungsten deposit outside China. In South Korea, the Sangdong mine is currently being developed, which will provide around 30% of the tungsten produced outside China.

    Tungsten deposits at the Sangdong mine. source: Almonty Industries

    The project is fully financed, including by KfW, and can produce at a very low cost. Average production costs are expected to be just USD 110. Also, a customer for the next 15 years is ready with Plansee, which has agreed to buy the tungsten at a minimum price of USD 235. Currently, the tungsten price stands at about USD 320. The mine life is about 90 years, and the annual EBITDA from the mine is estimated at USD 72 million. This value can be increased by mining the molybdenum deposit, which is also located on the property. The mine is expected to start operations this year and reach full capacity within one year.

    The Company has acquired the know-how in mining tungsten through the Panasqueira mine in Portugal. Without experience, it is difficult to build a tungsten mine. The mine in Portugal brought in revenues of about CAD 18 million in the first 9 months of 2022. Those interested in learning more about the Company should mark their calendars for February 15. Then CEO Lewis Black will inform interested investors about the progress of the Sangdong Mine at the International Investment Forum online event. Attendance is free of charge. The stock sold off until December 22. Since then, it has gained about 50% at the peak, breaking the downtrend and establishing an uptrend. Currently, one share certificate costs CAD 0.85.

    ThyssenKrupp - Q1 figures ahead

    For steel producer ThyssenKrupp, tungsten is an alloying element to refine the steel produced. Its hardness and heat resistance make the steel more resistant, so it is used not only in aerospace but also in the defence industry. Demand for heavy vehicles and munitions has increased significantly due to the Ukraine conflict, positively affecting manufacturers in the long term. The opening up of China could also increase demand. Good prospects for the Group, which is still preparing for the future.

    Most recently, the Essen-based company suffered from high gas prices. Since they have been falling, the share has also recovered. A closer look at the fiscal year 2021/22 shows how important the steel segment still is for the Company. Almost 50% of adjusted EBIT comes from this area. Since the announced opening of China after the Corona Lockdown at the beginning of December, the price of steel has been rising again. Without the high steel prices, ThyssenKrupp's EBIT would fall significantly. Figures for the first quarter from October to December are expected on February 14.

    The stock bottomed out at EUR 4.168 at the end of September 2022. Even before the good news from China, the stock had formed an uptrend. The downward trend was then broken at the beginning of January. The share gained more than 75% at its peak and is currently available for EUR 7.068. Analysts are somewhat cautious about the share because some factors can decisively influence the figures, such as energy prices or the price of steel. JPMorgan and Barclays advise selling, Deutsche Bank advises holding, and Citigroup recommends buying. The price targets are between EUR 5.70 and EUR 9.50.

    Volkswagen - Share of electric vehicles growing

    If the breakthrough in charging electric vehicles succeeds, Volkswagen will be in a good position, as the Company was one of the first major automakers to embrace electromobility fully. The group's new boss Oliver Blume, who has been in office since September 1, is focusing more on decentralization and wants more teamwork within the group. In an interview with Handelsblatt, Blume announced a meeting with all members of the board of management at the end of January to determine upcoming goals after everyone has revealed their plans. It is expected that Audi and Porsche will be given more responsibility in the Group.

    The transformation toward electric drive is moving forward, according to a company news release on January 12. A total of 572,100 all-electric vehicles (BEVs) were delivered. This brought the share of electric vehicles to 6.9%, up from 5.1% a year earlier. The Group remains No. 1 in the European BEV market and 4 in the USA. In China, the Group delivered 68% more BEVs than in the previous year. Overall, the Group handed over 8.3 million vehicles to customers, 7% fewer than a year earlier, mainly due to supply bottlenecks. The order backlog in Western Europe remains high at 1.8 million vehicles, including 310,000 BEVs.

    The Wolfsburg-based company is planning to build a Gigafactory with the Canadian government. The group also announced that it is expanding the cooperation between its subsidiary PowerCo, which is responsible for global battery activities, and Umicore in the area of cathode materials to Canada. But there are also difficulties in the electric car sector. Due to a lack of semiconductors, customers are currently unable to have heat pumps installed in their electric vehicles to keep them warm in winter and cool in summer. The share still looks battered, but this is due to the Porsche IPO. One share certificate currently costs EUR 124.26.


    Tungsten is increasingly becoming a high-tech raw material needed to implement technical revolutions. This will boost demand. At the same time, the West faces the challenge of becoming independent from China and Russia. In order to achieve this, it requires alternatives such as Almonty Industries, which owns the largest tungsten mine outside China. ThyssenKrupp needs tungsten as an alloying material to optimize its steel. Volkswagen is focusing strongly on electromobility, and already today, there is around 1.4 kg of tungsten in an e-car. The Group needs to eliminate its supply bottlenecks, and then higher sales figures are realistic.


    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") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    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 also 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.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author



    Related comments:

    Commented by Juliane Zielonka on May 17th, 2024 | 07:00 CEST

    Almonty, Rheinmetall, Super Micro Computer - Commodity rally for defense and cloud

    • Mining
    • Tungsten
    • AI
    • Defense

    AI and defense stocks are setting the stock market on fire. Investors worldwide seem to have acquired a taste for artificial intelligence and defense. Wall Street is expecting a four-digit price target for Super Micro Computer soon. Rheinmetall is also enjoying full order books. Since the takeover of a Spanish ammunition manufacturer, production has also increased in this segment. Meanwhile, tensions between the largest economies, the USA and China, are growing enormously, which is reason enough for investors to take a look at Almonty Industries. The tungsten producer is on course for growth thanks to the restart of a mine in South Korea. Tungsten is rising in value as the increase in AI, and armaments are directly boosting demand for the rare earth metal. Who will win the stock market race?

    Read

    Commented by André Will-Laudien on May 16th, 2024 | 07:00 CEST

    Attention: Here we go! Hydrogen and uranium on the rise: Plug Power, Nel ASA, Kraken Energy and Siemens Energy in focus

    • Mining
    • Uranium
    • Hydrogen
    • renewableenergies
    • Energy

    It has finally happened! After months of sell-offs in hydrogen shares, there was a sigh of relief across the sector the day before yesterday. The reason: industry leader Plug Power received a government guarantee of USD 1.66 billion as backing for the construction of six-megawatt sites nationwide to create an initial hydrogen infrastructure. The Department of Energy (DOE) is thus demonstrating that the US is serious about investing in alternative energies. The decision boosted the entire energy sector, with uranium also continuing its recent upward trend. Where do the opportunities lie for investors?

    Read

    Commented by Juliane Zielonka on May 16th, 2024 | 06:45 CEST

    Saturn Oil + Gas, RWE, thyssenkrupp - Full speed ahead in energy and heavy industry

    • Mining
    • Oil
    • Gas
    • renewableenergies

    The oil and gas industry has evolved significantly thanks to technological developments. The Canadian energy company Saturn Oil & Gas has already completed four successful wells in southeast Missouri, USA, in the first quarter of 2024, with promising results. Further strategic investments, such as the acquisition of assets and financing commitments, strengthen Saturn Oil & Gas as an industry leader. RWE reports positive quarterly results. Despite lower earnings in the 'Flexible Generation' segment, the Company is optimistic due to the expansion of renewable energy projects. Thyssenkrupp reported stable results in the second quarter, although order intake and sales were down compared to the previous year. CEO Miguel López emphasizes the progress made in Marine Systems. Despite challenges, thyssenkrupp is sticking to its forecasts. Where is an investment worthwhile?

    Read