March 28th, 2023 | 15:47 CEST
Critical metals existential - Plug Power, Almonty Industries, Nordex
Table of contents:
"[...] While tungsten has always played an important role in the chip industry, it is now being added to batteries for e-cars. [...]" Lewis Black, CEO, Almonty Industries
Almonty Industries - Most important player in the West
Tungsten is a metallic element known for its high density and high melting point. These properties make it an ideal material for EV batteries, as it can withstand the high temperatures and pressure generated during battery charging and discharging. In addition, tungsten is a highly conductive material, making it a perfect choice for use in EV battery electrodes. Energy density measures how much energy a battery can store per unit volume. This is important for electric car batteries because it allows the battery to be smaller and lighter without sacrificing performance.
The Sangdong tungsten mine, recently reopened by Almonty Industries, will play a critical role in the production of batteries for electric vehicles. The mine provides a stable and affordable supply of high-quality tungsten and has well-established logistical systems that provide reliable protection against tungsten shortages. This ensures a stable and sustainable supply of this important material for the Korean EV battery industry.
The electric vehicle battery manufacturing market is highly competitive, and three Korean companies, LG Energy Solution, Samsung SDI and SK Innovation, are among the top 10 global battery manufacturers. However, they currently rely on Chinese tungsten in their supply chain, which poses a significant risk to their business. Almonty Industries' Sangdong tungsten mine provides a stable and affordable alternative for these companies, allowing them to diversify their supply chains and reduce their dependence on China.
Almonty Industries, a Canadian company, owns a wholly-owned subsidiary called Woulfe Mining, which is in the process of building the largest tungsten production facility in the Western Hemisphere. Once fully operational, the project called Almonty Korea Tungsten will be responsible for 30% of the world's tungsten supply outside of China. The Austrian Plansee Group has already signed a 15-year offtake agreement that guarantees Almonty Industries a cash flow of USD 590 million. Construction is progressing as planned, and production is expected to start in 2024. Although raw material and energy costs are rising, the Company is keeping costs within budget. Mine life is estimated at 90 years.
Recently, the Company raised CAD 3.5 million through a share placement to fund the repayment of a convertible bond. In addition, Almonty received conditional approval from the TSX to settle fees related to debt obligations in shares. The conditional approval to settle the fees in shares rather than cash was at the request of the major shareholder, Plansee Holding AG of Austria. Currently, Almonty owes Plansee USD 2.4 million, which has now been settled through the issuance of 4,501,840 common shares on the TSX. The average price of the share issue was CAD 0.73 per share. Following the conversion of the outstanding fees, Plansee will hold an 18.7% interest in Almonty. The share price is currently quoted at CAD 0.65.
Plug Power - Heavily battered
The current chart picture of the fuel cell pioneer Plug Power is extremely negative. With the slide below the vertical support at USD 11.85, the sell-off was intensified once again. In addition, the Nasdaq stock marked a new low for the year. The next important stop is the mark in the area of USD 8.65.
Fundamentally, the hydrogen specialist announced the expansion of its GenKey offering for turnkey hydrogen fuel cells. In the future, it will be able to serve customers who use fewer than 100 electric forklifts at their warehouse locations. For the first time, this segment of the forklift market, which Plug Power says accounts for more than 25% of all forklifts sold in the US, will thus have easy access to Plug Power's fuel cell and hydrogen solutions. Plug Power's expanded offering is supported by the Inflation Reduction Act in the US, which has significantly reduced the cost of green hydrogen, according to the Company. Fuel cells also benefit from federal tax credits.
Nordex takes care of recycling
After a countermovement since mid-October and a performance of around 115%, the signs also point to consolidation for the wind turbine manufacturer. The next important support is at EUR 11.10. The 200-day line, which is turning downwards, also runs there.
With its participation in the EoLO-HUBs project, the Hamburg-based company is also promoting the recycling of high-quality materials from wind turbine rotor blades. More than 85% of a Nordex turbine can already be recycled today. As a manufacturer, the Nordex Group would like to contribute its know-how on blade design and material combinations to the project and provide test blades.
Wind turbines combine different materials such as wood, metals, adhesives, paints and composites. The composites are glass fiber-reinforced and carbon fiber-reinforced plastics. They pose a challenge for recycling due to the heterogeneity of the materials used and the strong adhesion between fibers and polymers. Processes for these materials are not yet established, and the reuse of recycled materials is not yet widespread. In recent years, the Nordex Group has already reduced the carbon footprint of its wind turbines.
The critical metal tungsten is becoming more and more sought after due to increasing demand from the automotive industry. Almonty is building the largest mine outside China and should benefit significantly in the long term. Plug Power continues to be in a correction.
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