Critical raw material supply: Rheinmetall's risk, Almonty Industries' opportunity, and Xiaomi's trump card

Rheinmetall - Focusing on expansion and innovation

The defense contractor Rheinmetall continues to expand. A new ammunition plant was recently completed in Lower Saxony in a record time of just 15 months. The Company is investing almost half a billion euros in the construction of a new production facility, not only creating around 500 new jobs, but also tackling an urgent problem: the acute ammunition shortage in Europe. The plant is scheduled to start full production in 2027 and will then deliver up to 350,000 rounds per year. This underscores the strategic importance the Company attaches to increased demand and delivery capacity.

In parallel with the expansion of capacity, Rheinmetall is pushing ahead with the development of state-of-the-art training systems. A newly introduced simulation system for the Puma infantry fighting vehicle has now reached an important milestone. The mobile and modular system enables realistic combat training – from individual soldiers to entire companies. The use of true-to-life cabins and state-of-the-art software makes the boundary between simulation and reality almost invisible, which significantly increases training efficiency.

The internationalization strategy is evident in recent projects, such as a planned new production facility for propellant powder in Romania. This is part of a broader trend toward decentralizing production capacities within NATO and making them more resilient. Through such investments, Rheinmetall is not only consolidating its role as a systemically important supplier, but also positioning itself in the long term as a pan-European partner for defense technology solutions. The share price is currently EUR 1,749.00.

Almonty Industries – Acquisition?

According to a Bloomberg report dated September 8, Almonty Industries is considering the acquisition of a tungsten project in the US. This potential acquisition would fit seamlessly into the Company's existing projects in South Korea and Portugal. The aim is to participate in the US initiative to reduce dependence on Chinese supplies of this war-critical metal. The US government's interest in this has recently become increasingly apparent. Almonty is already in talks with various authorities, including the Defense Advanced Research Projects Agency (DARPA).

The Company plans to position itself strategically as a Western supplier along the entire value chain. The most important catalyst remains the Sangdong mine in South Korea, which is expected to start production in the second half of 2025. At the same time, the established Panasqueira mine in Portugal is providing a stable cash flow. The market environment could hardly be better for Almonty. Due to Chinese export restrictions, prices for tungsten oxide (APT) have risen significantly, and the new US procurement rules, which will come into force in 2027, will further favor non-Chinese sources.

Why does an investment in Almonty appear so promising at present? The Company is addressing an extremely tight market environment with a clear strategy. It combines an already cash flow-generating mine in Europe with one of the world's largest tungsten projects outside China in a secure jurisdiction. Long-term off-take agreements with price floors offer predictability. At the same time, the NASDAQ listing has brought in around USD 90 million and strengthened the balance sheet for the upcoming production ramp-up. Almonty is thus a pure play on the recalibration of global supply chains for critical minerals. GBC analysts have issued a price target of CAD 9 or USD 6.50. The stock is currently trading at USD 4.45 on the NASDAQ.

Xiaomi – From smartphone giant to serious car manufacturer

Those who have only known Xiaomi as a manufacturer of affordable smartphones may be surprised. The Company has rapidly evolved into a serious player in the electric vehicle market. It is leveraging its concentrated expertise in software and hardware integration, which was originally developed for mobile phones and countless smart home products. This head start is proving to be a decisive competitive advantage in the highly competitive EV market. Early models like the SU7 sedan and the YU7 SUV have already been enthusiastically received by industry insiders and are recording huge pre-order numbers in China.

The core consumer electronics business remains strong and is financing the ambitious expansion. Xiaomi remains one of the top three smartphone manufacturers globally and dominates segments such as wearables and smart home appliances. This diversification provides stability. The electric vehicle division, although still young, is growing exponentially and already contributes significantly to overall revenue. The strategy of creating a connected ecosystem of vehicles, phones, and homes is a compelling and unique selling point.

Despite this impressive boom, investors should not ignore the downsides. Geopolitical friction and trade barriers, especially high tariffs on Chinese electric vehicles in the US and Europe, could seriously hamper the Company's expansive international strategy. The domestic market is also oversaturated with around 150 vehicle brands, which suggests that a tough consolidation process is on the cards. In the long term, only a handful of Chinese manufacturers will be able to survive. Xiaomi's strength in consumer technology suggests that it will be among the survivors. The share is currently available for EUR 6.124.

The reorganization of global supply chains for critical raw materials creates dependencies, but also clear winners. Rheinmetall is consolidating its role as a systemically important defense supplier through massive capacity expansions across Europe. Almonty Industries, as a strategic tungsten supplier outside China, is benefiting directly from the US initiative for greater supply independence. Meanwhile, Xiaomi is leveraging its technological expertise to rise from smartphone market leader to a serious player in the electric vehicle sector. Together, these companies demonstrate how geopolitical risks can be transformed into strategic opportunities.