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October 12th, 2022 | 13:58 CEST

BYD, Infinity Stone Ventures, Rock Tech Lithium - Electromobility with rapid growth ahead

  • Mining
  • Lithium
  • Electromobility
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The IEA (International Energy Agency) has recently issued forecasts for the growth of electromobility up to 2030. While only about 10% of all vehicles were electric in 2021, this figure is expected to rise to at least 60% by 2030. That would significantly reduce emissions, but the energy transition requires raw materials from copper to cobalt to lithium, which is essential for the production of batteries for e-cars. S&P Global has calculated that even if all existing lithium projects were to go into production, there would still be a supply deficit of 220,000 to 2 million tons in 2030. Reason enough to take a closer look at three companies based on the sector.

time to read: 5 minutes | Author: Armin Schulz
ISIN: BYD CO. LTD H YC 1 | CNE100000296 , Infinity Stone Ventures Corp | CA45675G1037 , ROCK TECH LITHIUM | CA77273P2017

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


    BYD - Another record in September

    BYD recently relegated the former industry leader in electric cars to second place. This was achieved by covering the value chain. While Tesla still suffers from supply bottlenecks, for example, with semiconductor chips, BYD has long since produced the required chips itself. Battery production also takes place in-house. As already mentioned, a number of raw materials are essential here. For this purpose, the group has made investments, such as in the Shenzhen Chengxin Lithium Group, Shanshan Lithium Battery Material Technology, Zhongrun Chemical and others. In this way, the Company is trying to position itself accordingly for future growth.

    The Company was again able to report impressive figures for September. With 201,259 electric vehicles, sales almost tripled YOY. As a result, BYD has sold 1.18 million vehicles in the first 3 quarters, a whopping 250% increase. BYD has long been the market leader in China, but the Company is now expanding into Europe and several other countries. On October 11, the news made the rounds that India is now also to be opened up with the SUV Atto 3.

    The share has been highly volatile since May. First, it went up over 100%, but since the beginning of July, the share has lost over 40% at its peak. The reason was a partial sale by Warren Buffet, who has been invested in the Company since 2008. The star investor is believed to have reduced his stake from 10% to 7%. The share is currently quoted at EUR 24.90. Recently, pressure was caused by the study of JPMorgan, which lowered the price target from USD 52 to USD 35 but remained with a buy recommendation. The fact is that the group has positioned itself better for the future than its competitors.

    Infinity Stone Ventures - Expands lithium property

    As mentioned at the beginning of this article, the energy transition needs different raw materials to develop its growth fully. Canadian company Infinity Stone Ventures (ISV) has as many as 6 of these raw materials in its portfolio. Besides lithium, a total of 7 projects also host graphite, copper, cobalt, nickel and manganese. All projects are located in mining-friendly Ontario and Quebec. The Company aims to be a one-stop-shop supplier for all types of critical energy metals. Currently, the focus is on battery metals. The Camaro lithium project group is located in James Bay, Quebec, and is 3,850 hectares in size after acquiring two adjacent properties in September. Grab samples revealed an average lithium oxide grade of 4.6%.

    On September 20, ISV contracted Axiom to conduct an exploration program. Sampling and mapping will be undertaken from 21 identified pegmatites during the 10-day drilling program. Axiom uses artificial intelligence and machine learning to identify suitable exploration targets. There was also good news from the Zen-Whoberi project on September 16. The property hosts copper, cobalt and nickel deposits. A new zone grading 15.5% copper was found in one sample, along with 14.9 g/t silver, 0.4 g/t gold, 0.114% nickel and 216 ppm cobalt. The other two samples also contained 2.12 and 0.7% copper, respectively. The Rockstone graphite project is 785 hectares in size and has up to 25% graphitic carbon. Here, SGS Labs was contracted to extract EV-battery grade graphite with a purity of 99.8% from a graphite sample on the property.

    Over the past year, both graphite and lithium prices have risen sharply. Due to the shortage of raw materials, there will be a lot of money to be made here in the coming years. But before that, investments must be made, and so the Company completed a private placement on October 5 at a price of CAD 0.25. A total of 6.4 million shares raised gross proceeds of CAD 1.6 million. Subscribers received half a warrant per share, exercisable at CAD 0.50. In addition, CAD 500,000 was raised through the issuance of flow-through units at a price of CAD 0.35. In the future, the share will also be listed on the Australian Securities Exchange. In the US, the share can be found on the OTCQB market. One share currently costs CAD 0.245 on the CSE, giving it a small market capitalization of CAD 18.9 million.

    Rock Tech Lithium - Drilling program completed

    Rock Tech Lithium owns a lithium mining project called Georgia Lake, located in Ontario and covering 1,042 hectares. Construction of the mine, both an open pit and an underground mine, is expected to begin in the second half of 2023. On October 7, the Company announced that the 2022 drilling program had been completed. It is helping to finalize the pre-feasibility study, which is expected to be released in Q4. Mineralization was expanded by the drilling, and lithium oxide grades of up to 1.67% were measured at peak.

    In addition to the mine, the main focus is on a lithium refinery to be built in Guben, Brandenburg. It is to become the first of 5 converters in Europe. Production of the first converter is expected to start at the end of 2024. The refining of lithium is the current bottleneck in the production of battery-grade lithium. One of the reasons for this is the high cost and expertise needed to build such a converter. On October 11, the Company announced that the European Investment Bank is considering EUR 150 million in loan financing for the converter.

    The goal of financing is slowly coming within reach. The declaration of intent of the strategic partnership with Mercedes-Benz, which intends to purchase up to 10,000 tons of lithium hydroxide annually from 2026, also brings additional security. The share price is still suffering from the last capital measure, which brought around CAD 50 million into the Company's coffers but also had a massive impact on the share price. The new shares were issued at CAD 3.50. Since the end of September, the share price has stabilized and currently stands at CAD 2.78. As soon as the financing of the converter is in place, the share will have to be revalued.

    Electromobility and the energy transition require many raw materials. Here, a lot has to be developed in order not to be faced with a huge demand but significantly too little supply at some point. BYD has recognized the signs of the times and is already investing in the future. Infinity Stone Ventures covers many critical metals, especially in the battery market. Here, one has a broadly diversified portfolio. Rock Tech Lithium is fully focused on lithium and intends to focus primarily on refining. A good approach in the long term.

    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

    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

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