Close menu




January 27th, 2022 | 11:06 CET

BYD, Defense Metals, Tesla - The long-term beneficiaries of climate change

  • RareEarths
Photo credits: pixabay.com

The post-pandemic global economic recovery and rising investment in more climate-friendly energy infrastructure are driving higher commodity prices amid supply chain disruptions. Shortages of industrial metals, which are urgently needed for climate change, are likely to materialize further in the coming years. This will be significantly exacerbated by the swelling trade conflict between the USA and China. There is a threat of massive bottlenecks in production and sharply rising prices for the respective materials.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: TESLA INC. DL -_001 | US88160R1014 , DEFENSE METALS CORP. | CA2446331035 , BYD CO. LTD H YC 1 | CNE100000296

Table of contents:


    New development phase at Defense Metals

    The sales figures of electric car manufacturers are rising, and with them, the demand for rare earth metals used in permanent magnet motors for electric vehicles. In addition to being an eminently important industry for implementing climate targets, the raw material is also used in the electricity market, the defense industry, the national security sector, and the production of green energy technologies, for example, wind turbines. Due to the ongoing crisis in the economic relationship between the USA and China, there could soon be supply problems. Around 80% of the rare earth minerals required come from the Middle Kingdom, and the European Union imports 98% of its requirements from China.

    Outside China, especially in North America, rare earth projects are few and far between. One of the few favorable bright spots can be found near Prince George in the Canadian state of British Columbia, where Defense Metals maintains its 2,008-hectare Wicheeda rare earth element concession area. The infrastructure is first-class, allowing Defense Metals to calculate drilling costs well below the industry average. According to management, mineral resources there are 4.9 million tons at an average grade of 3.02% LREO (light rare earth elements) and inferred mineral resources of 12.1 million tons at an average grade of 2.90% LREO. An additional 12 million tons are suspected in the area.

    Ambitious Targets

    With the submission of a preliminary economic assessment (PEA) and the acquisition of all rights to the Wicheeda project, the Canadian exploration company is now beginning a new phase of development. This has significantly upgraded the quality of the management team around the go-getting CEO Craig Taylor. Dr. Luisa Moreno has been appointed to the Board of Directors and will now assume the role of President and Director of the Company. An applied physics engineer with Ph.D. degrees in materials science and mechanics, she brings years of experience as a senior analyst at various investment banks and as an investment research analyst at an international investment research firm. In addition, Dr. William H. Bird, who brings a unique combination of business qualifications and commodity industry expertise, will also join the Board of Directors.

    Defense Metals has already set its goals for the current year. The mineral resource is to be upgraded and expanded, and geotechnical investigations are to begin. In addition to optimizing the flowsheet, implementing an environmental, social and governance strategy, and further engaging end-users, Defense Metals plans to start a preliminary feasibility study in the second half of 2022, which could extend into next year.

    The Company's stock market value, traded in Frankfurt and Toronto, currently stands at EUR 13.14 million. The share has corrected by about 60% since February last year and is forming a bottom at the level around EUR 0.15. In the long term, demand for rare earth metals is more likely to increase.

    The view on Tesla

    Interested parties in the electric car industry are looking across the pond with anticipation after the close of the stock exchange. Then none other than Elon Musk will announce the carmaker's figures for the fourth quarter. On consensus, analysts expect revenue of USD 16.9 billion and adjusted earnings per share of USD 2.46. In addition to the numbers, the community expects news regarding the cybertruck and the semi-truck, which Musk announced in his usual manner via Twitter. From a chart perspective, things look anything but rosy for the rock star among electric cars. After the slide below the USD 900 mark, a larger correction to the area around USD 621 is possible.

    On the other hand, Chinese competitor BYD once again held broad support at USD 30, but this is not an all-clear for further price corrections. Fundamentally, the Chinese Company plans to enter the foreign exchange market with a volume of around USD 4.3 million. The reason for this is the strong increase in the Chinese renminbi, which hit BYD hard in its foreign business last year.

    As BYD's foreign business continues to expand, the size of the Company's foreign exchange balance continues to increase. The move aims to prevent the Company from being affected by sharp exchange rate fluctuations and appropriately reduce financial costs.


    Due to climate change, the demand for raw materials such as rare earth metals is increasing. However, about 80% comes from China, while there is little supply in North America. Defense Metals should benefit in the long term as one of the few pure exploration companies. Although the future belongs to the electric car, caution is currently advised for both Tesla and BYD.


    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.

    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

    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



    Related comments:

    Commented by Stefan Feulner on February 1st, 2023 | 18:17 CET

    Rheinmetall, Defense Metals, Lynas - Time is running out!

    • Mining
    • Tungsten
    • RareEarths
    • Defense

    Heavy weapons for peace. Tanks, submarines and fighter jets for Ukraine, whatever the cost. This scenario is the bitter reality right now and is being promoted across the board by Western politicians. It may not sound very understandable, but in order to guarantee peace, the world continues to arm itself. Companies in the armaments industry, now declared to be sustainable investment opportunities, are booming. With the seething conflict in Taiwan, tensions are again on the rise. With its raw materials, such as rare earth metals, China has the power to act. The West is frantically trying to reduce dependencies, which is impossible to achieve in the short term.

    Read

    Commented by Fabian Lorenz on January 31st, 2023 | 14:48 CET

    Energy transition price rockets: American Lithium, Plug Power, Auxico Resources

    • Mining
    • RareEarths
    • Lithium
    • hightech

    Are shares related to electromobility among the price rockets of 2023? In any case, the start of the year was promising. After a partially disastrous second half of 2022, many stocks are showing strength in the new year. Lithium shares, in particular, are in demand again. Among the high flyers of recent months is American Lithium. After the Nasdaq listing and the planned spin-off of the uranium division, investors are eagerly awaiting the feasibility study. Will the share price fireworks continue? Analysts also expect such fireworks at Auxico Resources. They believe that the share price of the trader of rare earths and critical raw materials could almost triple. Hydrogen pioneer Plug Power has also bounced back in the new year. But once again, the US company has disappointed operationally. How do investors react?

    Read

    Commented by Juliane Zielonka on January 26th, 2023 | 20:10 CET

    Freyr Battery, Auxico Resources, Plug Power - Rare earth battery boom in e-Mobility

    • Mining
    • RareEarths
    • fuelcell
    • Electromobility

    One of Norway's largest financial services companies is increasing its equity stake in Plug Power, the US hydrogen fuel cell company. The reason: Nikola Motors has selected the Company to upgrade its new e-mobility fleet with clean fuel cells. Freyr Battery also has similar ambitions. Here, Impact Clean Power Technology, the Polish manufacturer of battery systems for heavy-duty vehicles, has signed an agreement with Freyr to purchase clean batteries. Both big deals have one thing in common: demand for rare earths and valuable metals to make green technologies a reality. That is where Auxico Resources, a mineral exploration company focused on Africa, comes in.

    Read