Close menu

April 22nd, 2021 | 09:44 CEST

Defense Metals, Lynas, NEL - Profit from the shortage of metals!

  • RareEarths
Photo credits:

Now it depends! The Bavarian Minister President's renunciation of the chancellor's post resulted in a strong shift to the left in the election polls. For the economy, this decision probably means more challenging conditions because the much-discussed shortage of raw materials and the bottleneck in high-tech components will hardly improve in the short term due to this change of political direction. Already today, there are question marks on the faces of industry leaders as to how Europe is to ensure its long-term supply security for essential metals. The new political direction vehemently calls for the climate neutrality of the European economy, but in Germany, we need good ideas rather than bans.

time to read: 3 minutes | Author: André Will-Laudien
ISIN: CA2446331035 , AU000000LYC6 , NO0010081235

Table of contents:

    Defense Metals - The Wicheeda project moves forward

    The supply situation of scarce and especially rare raw materials is highly debated. Thereby the overpowering dependence on China leaves western politicians with a feeling of powerlessness. Worldwide there are only about 20% of free resources in this area. Many properties are too small for industrial exploitation. As the majority owner of rare metals, China could sometimes play this monopoly against the other industrial nations, especially if childish trade wars do not find a lasting solution.
    In many future applications and high-tech devices, we refer to electromagnetically important metals such as neodymium, praseodymium, dysprosium and terbium. According to recent studies, in 10 years, the demand will be 5 times the current demand; this is due to the exponential growth of energy storage and power generation technologies. If e-mobility grows at 25% or more per annum, as currently expected, we will be in a complex supply situation in as little as 2 years.

    Canadian explorer Defense Metals has secured a deposit in Wicheeda, BC, that could supply in the foreseeable future. A feasibility study is already underway and the Company is currently receiving bids for a hydrometallurgical pilot plant. The Wicheeda project has Indicated Mineral Resources of 4,890,000 tonnes averaging 3.02% LREO (Light Rare Earth Elements) and Inferred Mineral Resources of 12,100,000 tonnes averaging 2.90% LREO. Highly successful testing of the Company's 26-tonne flotation pilot plant, also conducted at SGS Lakefield's metallurgical test facility, has already yielded 1,200 kilograms of high-grade REE mineral concentrate. The goal is to produce a saleable NdPr oxide product - Defense Metals could be there by 2022.

    So given the current situation, this issue could fly at some point. Defense shares have consolidated extensively and are now trading for a low CAD 0.35, roughly in the middle of the last 12 months of trading.

    Lynas Corporation - Rare earth prices are picking up

    Another player in the critical metals market is Australia's Lynas Corporation. It operates the Mount Weld mine in Western Australia and a processing plant in Kuantan in Malaysia. With sales of AUD 360 million, Lynas is one of the larger suppliers outside China.

    Total quarterly rare earth oxide production was 4,463 tons in the first quarter, up from 3,410 tons previously. Corresponding sales were AUD 110 million, slightly less than the AUD 119 million realized in the previous quarter. The cash nevertheless grew to AUD 568.5 million, allowing Lynas to expand its resource, as demand in the current year is barely manageable. Currently, China is still willing to serve the shortfalls of the Western industry, but this condition should not turn into recklessness.

    NdPr and SEG sales prices reached new records this year, and Lynas had to curtail its production in Southeast Asia somewhat due to COVID security requirements. In turn, this increases the international demand for new projects, such as Defense Metals. The Company noted that a judicial review application has been filed in Malaysia to get government approval for higher production rates. Lynas shares had a TOP 12-month performance of plus 300%, since 2 months the stock has been consolidating at a high level.

    Nel ASA - The story goes around some more

    Another quick look at Nel ASA, the hydrogen logistics expert from Norway. We took a closer look at the stock in recent weeks. The share reached a high of EUR 3.4 in January, after which it fell to EUR 2.1. Currently, the share is moving sideways. The former fans of the share are trying to revive the share price every day - but the success is missing. It seems that the time of hydrogen stocks is over.

    Morgan Stanley was nevertheless optimistic about the entire H2 sector in a study. The analysts examined the future potential of hydrogen and praised Nel, in particular, for its pioneering role as a pure player in the field of water electrolysis in Europe. The study and the positive market environment could bring new momentum to the stock. Still, justified doubts remain as to whether the current pronouncements on e-mobility will not push hydrogen into the background for the time being. We do not expect a new hype in the short term, rather a gentle recovery from the 40% correction shock.

    Therefore, pay attention to the technically important lines at EUR 2.13 and EUR 1.91. These are two stops on the way down. The NEL share will only become truly bullish again above EUR 2.72.

    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.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.

    Der Autor

    André Will-Laudien

    Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

    About the author

    Related comments:

    Commented by Stefan Feulner on May 21st, 2024 | 07:00 CEST

    Lynas, Almonty Industries, General Motors - Is the trade war escalating, and what is Tesla doing?

    • Mining
    • Tungsten
    • Electromobility
    • RareEarths

    The stock markets continue their record-breaking run. The Dow Jones Industrial has climbed to the 40,000-point mark for the first time in its history, and the DAX is also on the verge of breaking through the 19,000-point barrier. So far, so good, one might say. However, something is brewing in the background with regard to the trade war between the US and China, which could put enormous pressure on company margins in the future. As a result, critical commodities, in particular, are likely to be on the verge of a strong upward impulse.


    Commented by Fabian Lorenz on March 27th, 2024 | 08:45 CET

    Shares in Focus: TUI, Rheinmetall, and Defense Metals with good reasons for price increases

    • Mining
    • RareEarths
    • armaments
    • travel

    The TUI share was one of the top performers on the German stock market yesterday. The EUR 7 mark was exceeded, making things exciting on the chart. Analysts expect significantly higher prices for the tourism group. Rheinmetall shares are among the top performers of the year. An end to the price increase is not in sight. The armaments group has announced a new order worth billions. The manufacture of armaments, aircraft, cruise ships and numerous other high-tech products would not be possible without rare earths. However, most of these come from China and Russia. This makes the Defense Metals share interesting. The Company is making great strides with its rare earths project in Canada. The share should also benefit from this progress.


    Commented by Armin Schulz on March 19th, 2024 | 07:00 CET

    Volkswagen, Defense Metals, BYD, Rheinmetall - China's weapon in the tech race

    • Mining
    • RareEarths
    • Electromobility
    • hightech

    In the shadow of global power rivalries, rare earths play a crucial role, not only for the defense industry, but also for the booming electric vehicle market and the production of catalytic converters in the automotive industry. These metals are the invisible backbone powering high-tech devices and are of strategic importance for the global economy and security. China's dominance in extracting and processing such resources - as illustrated by Deng Xiaoping's statement: "The Middle East has oil. China has rare earths." - sheds light on potential geopolitical tensions and highlights the importance of supply chain diversification and resilience.