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October 28th, 2020 | 09:38 CET

BYD, Defense Metals, VW - the next boom after hydrogen!

  • Rare Earth Elements
Photo credits: pixabay.com

Tesla wants to break the sound barrier of one million vehicles with delivery in 2021. The biggest competitor from China, BYD, has at least as ambitious goals and is rushing from record to record with its new model, Han. Even German car manufacturers like VW have awoken from their deep sleep and now find electric cars sexy. The production of rechargeable batteries is increasing rapidly, but so is the demand for the necessary materials. Surpluses in demand, supply bottlenecks, and exploding prices are threatening.

time to read: 2 minutes | Author: Stefan Feulner
ISIN: CA2446331035 , CNE100000296 , DE0007664039

Table of contents:


    Demand not to cover

    The situation is dramatic with the scarcity of "rare earth". Permanent magnets for electric motors are produced based on rare earth metals. In ten years, the experts at Adamas Intelligence predict that the demand for rare earth oxides for use in magnets will increase from the current USD 2.98 billion to USD 15.65 billion. The analysts of Adamas Intelligence see by far the most significant demand for magnetic rare earth such as neodymium, praseodymium, dysprosium, and terbium.

    Almost 80% of rare earth metals are produced in China. The trade conflict between the USA and China is still ongoing and is not likely to calm down after the possible re-election of Donald Trump. As early as 2019, the Middle Kingdom threatened to stop exporting rare earth metals to the USA. Alternatives ex-China are therefore needed here as quickly as possible.

    Current production capacities too low

    The short-term view of a period of three to five years is incredibly critical. The reason being, the demand for rare earth is exploding to such an extent that production capacities, which are already insufficient today, are likely to collapse. Enormous investments in the mining industry are needed here to increase supply.

    Well-positioned

    The Canadian mineral exploration Company Defense Metals can already point to tangible successes in this area. Founded in 2016, the Company focuses on the acquisition of mineral deposits containing metals and elements used in the production of renewable energy technologies, such as rare earth magnets.

    The main focus is on the Wicheeda project in the province of British Columbia. According to the Company, the mineral resources are 4.9 million tonnes at an average grade of 3.02% LREO (light rare earth metals), and inferred mineral resources are 12.1 million tonnes at an average grade of 2.90% LREO.

    Unique positioning

    About four weeks ago, the Company received the final report of the study, which was prepared by SGS, the world's leading inspection, verification, testing, and certification Company. Craig Taylor, CEO of Defense Metals commented: "The success of the flotation pilot and 1,200 kilograms of high-grade REE concentrate produced places Defense Metals and the Wicheeda REE deposit among rare company and opens the door to future hydrometallurgical pilot trials at SGS, with the ultimate goal of producing a Nd-Pr oxide product stream."

    Defense Metals is at the beginning of a success story. At the moment the market capitalization is a mere EUR 6.00 million. An entry into the stock would be a bet on the future. However, if you see the exponentially growing demand for electric vehicles, you can't ignore the producers of the raw materials.


    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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses 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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