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April 14th, 2023 | 10:15 CEST

Battle for scarce raw materials - Nordex, Orestone Mining, Glencore

  • Mining
  • RareEarths
  • Lithium
  • renewableenergies
  • Commodities
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The battle for raw materials has become increasingly intense in recent years due to the energy transition. The increasing demand for renewable energies to reduce global dependence on fossil fuels and combat climate change has led to increased scarcity. Metals such as copper, lithium, cobalt and rare earths are crucial for the production of batteries, solar cells and other renewable energy technologies. Competition for access to these raw materials has political, economic and social implications worldwide.

time to read: 3 minutes | Author: Stefan Feulner

Table of contents:

    Glencore - Rebuffed again

    Glencore is the world's largest commodity trading and mining group. Its operational headquarters are located in Baar, Switzerland. With a market capitalization of EUR 69.53 billion, the Company produces and markets a wide range of metals and minerals, including copper, cobalt, zinc, nickel and ferroalloys.

    In order to increase its portfolio, especially in the copper sector, the Swiss commodities giant is currently on the lookout and has already found the right match in Teck Resources. However, an initial takeover bid of USD 22.5 billion has already been rebuffed. The merger would create the world's third-largest copper company alongside a large listed coal company. However, this offer was declared "value-destroying" by Teck Resources. After the merger, Glencore would own 76% of the Company and Teck Resources the remaining 24%. The addition of a cash component of USD 8.2 billion was also rejected by management in the second step.

    According to a statement, Teck's board unanimously recommended the offer for rejection. "Glencore has made two opportunistic and unrealistic proposals that would add significant value to Glencore at the expense of Teck shareholders," board chair Sheila Murray was quoted as saying in the release.

    Orestone Mining - Share with leverage

    A promising gold-copper project is owned by the Canadian company Orestone Mining, which has a stock market value of only CAD 1.98 million and has recently started trading in Frankfurt as well as Toronto. The prospects that the stock market value could expand significantly are excellent. The Captain project is about 105 sq km and has an extensive, gold-dominated porphyry system. Surrounded by world-class infrastructure, the property is located just 41 km north of Fort St. James and 30 km south of the Mt. Milligan copper-gold mine in North Central British Columbia.

    In preparation for the next drill programme, structural and geological data will be compiled, and airborne magnetics will be used to further refine the gold-copper porphyry trend model. Already last year, anomalies were identified in the ground with gold grades ranging from 0.2 g/t to 0.84 g/t from a depth of 500m, extending downwards from an initial width of 300m to a depth of 1,300m in the form of a pyramid to a width of 1,500m.

    A programme of 2 drill holes with a depth of 1000m is then planned for the current year in order to be able to analyze the rock structure there. So it is not unlikely that the gold discoveries in the underlying layers could extend further.

    "We continue to work on more precisely defining and de-risking the large T1 porphyry target where gold dominates. Our model suggests an area of around one cubic kilometre in size, and there is enough room for a substantial tonnage. The next drill programme is planned for summer 2023," said David Hottman, CEO of Orestone Mining.

    Nordex - Order backlog declines

    Investors had to accept a severe setback in the figures for the first quarter of the wind turbine manufacturer. Nordex orders for 177 wind turbines with a total capacity of 1.021 GW were down on the same quarter of the previous year. In the first quarter of 2021, orders totalled 1.165 GW. Customer demand was primarily for more powerful turbines with an output of 1.21 MW. In contrast, the sales price per MW of capacity developed positively. This was 0.90 million per MW compared to 0.78 million per MW in the same period last year.

    Commenting on the results, José Luis Blanco, Chief Executive Officer of the Nordex Group, said: "In the first quarter of the year, we received a solid order intake in our core European market, meeting good demand, especially in the Baltic States. I am very pleased about this as it shows that our turbines can contribute to clean energy generation in different geographical areas."

    At the end of March, another order was also booked from RWE to deliver and install eleven Delta4000 series turbines for two projects in Lower Saxony with a total of 61.8 MW. Nordex is supplying seven N149/5.X turbines and one N133/4800 turbine for the 44.7 MW Lesse wind farm, while the 17.1 MW Barbecke wind farm will receive three N149/5.X turbines.

    Following the publication of the figures, the Nordex share corrected by over 2% to EUR 11.50. At EUR 11.36, the 200-day line still serves as a support for the stock.

    Order receipts at Nordex declined in the first quarter compared with the previous year. Glencore's second takeover bid for Teck Resources was rebuffed. At Orestone Mining, there is a chance of disproportionate share price gains if the drilling programme is successful.

    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

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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