Close menu




March 29th, 2023 | 08:19 CEST

Defense Metals, Rock Tech Lithium, BYD - Shares for the energy transition

  • Mining
  • RareEarths
  • Tungsten
  • Lithium
  • Electromobility
Photo credits: pixabay.com

The energy transition is a major challenge for the world, as it requires transitioning from fossil fuels to renewable energy. In order to switch to renewable energies in the long term, large quantities of critical raw materials such as rare earths and lithium are needed. However, these raw materials are important not only for the energy transition but also for numerous other applications in modern industry. Rare earths are particularly important for the production of powerful magnets used in electric motors and generators. Lithium, on the other hand, is an essential component of lithium-ion batteries used in electric vehicles and renewable energy storage. Today, we look at three companies that can help drive the energy transition.

time to read: 4 minutes | Author: Armin Schulz
ISIN: DEFENSE METALS CORP. | CA2446331035 , ROCK TECH LITHIUM | CA77273P2017 , BYD CO. LTD H YC 1 | CNE100000296

Table of contents:


    Lewis Black, CEO, Almonty Industries
    "[...] 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

    Full interview

     

    Defense Metals - Preparing the Pre-Feasibility Study

    Defense Metals has turned its focus to rare earths and is working on getting into production. Last year, a preliminary economic assessment (PEA) was released for the Wicheeda rare earth project in British Columbia. According to the PEA, the project has an after-tax net present value of CAD 517 million and should pay for itself 5 years after the start of production. Production potential is 25,423 tonnes of REO per year, and revenues from the sale of rare earth mineral concentrates are expected to average CAD 381 million annually. The updated mineral resource estimate for Wicheeda includes an indicated mineral resource of 5 million tonnes averaging 2.95% TREO and an inferred mineral resource of 29.5 million tonnes averaging 1.83% TREO.

    On February 21, the Company announced it had begun construction of a hydrometallurgical pilot plant. The purpose of the plant is to demonstrate the processing of flotation concentrates for the recovery of rare earths on a larger scale using the acid-sintering workflow diagram. The samples produced will be distributed to potential end users. In previous flotation tests on rare earth metal samples, an average recovery rate of 81% was achieved for a concentrate containing 45% rare earth oxide. In addition, there were favorable crushing results for several samples which are being used to advance the design of the crushing and milling plant, which is a component of the preliminary feasibility study (PFS).

    On March 6, the Company announced that the 3D geological model of its deposit had been updated using over 10,000 m of new drilling completed after the PEA. This is intended to both adjust the mineral resource estimate accordingly and incorporate more detailed data into the PFS. Kristopher Raffle, Director of Defense Metals, commented, "This drilling returned some of the longest and highest grade drill intercepts encountered to date on the project and resulted in the discovery of a new zone of high-grade mineralization at depth that has the potential to positively impact an updated mineral resource estimate." The stock, which has gained more than 110% at its peak since the beginning of the year, has recently consolidated and is trading at CAD 0.295. Support at CAD 0.26 has been held.

    Rock Tech Lithium - Groundbreaking ceremony in Guben, Germany

    Rock Tech Lithium is a cleantech company based in Canada and Germany that produces lithium hydroxide for electric car batteries. Its first converter and refinery plant for lithium hydroxide will be built in Guben, Germany. The Company has set strict ESG standards and is developing its processing system to be more efficient and sustainable. Rock Tech plans to source the required feedstock from its Georgia Lake spodumene project in Canada and also intends to process lithium from other responsibly producing mines. In addition, the plant will also source materials from battery recycling to create a circular economy for lithium.

    The lithium converter was developed to support the transition to electric mobility and is an essential component for automakers in Germany. The groundbreaking ceremony for the converter took place on Monday, March 27. The facility is the first of its kind in Europe and will be a key player in Mercedes-Benz's lithium supply chain in the future. The construction is also important for the Brandenburg region, as it will cover the entire value chain of e-car batteries. Brandenburg's Minister of Economics, Jörg Steinbach, said, "I hope the project will trigger an envy factor."

    An exploration program has been underway at the Georgia Lake project since March 7. The mineral resource is to be increased up to and including 2024. A diamond drill rig is being used to drill a total of 3,500 m of holes in the Main Zone North and McVittie deposits to expand the spodumene mineralization. The stock has successfully defended its support area around CAD 2.42 and is currently trading at CAD 2.62. If management successfully completes the converter's financing, the stock has massive upside potential.

    BYD - Market leader relies on Nvidia chips

    Electric cars use rare earths in various components such as electric motors, batteries, catalytic converters and magnets. Global demand for key rare earth oxides is estimated to increase from 131,500 tons in 2020 to 188,300 tons in 2030. It is even more evident in lithium, where production was around 82,000 tons in 2020. The German Mineral Resources Agency expects demand to be between 316,000 and 558,800 tons in 2030. China leads the way in the production of the two critical raw materials.

    Good for BYD, the Chinese manufacturer of electric vehicles and batteries. The Company took the market lead with 1.87 million deliveries in 2022. By comparison, the previous top dog Tesla brought in only 1.3 million. While most of BYD's car sales have been in China, the Company aims for global expansion. To support those ambitions, BYD plans to build one or two factories in Europe, is in talks to acquire Ford's manufacturing plant in Germany, plans to start production in Thailand by 2024 and plans to build a component factory in Vietnam.

    The Company produces its own batteries and microchips. In the future, it plans to install Nvidia DRIVE Orin chips in its intelligent driving systems. It is also investing in lithium companies to prepare for future growth. This has created a competitive advantage that the major automotive companies must first make up for. The share has been under pressure recently because Berkshire Hathaway has repeatedly sold shares. Currently, one share costs EUR 25.10.


    The energy transition is a major challenge that requires large quantities of critical raw materials such as rare earths and lithium. Defense Metals has put its focus on rare earths and is working on getting into production. Rock Tech Lithium is a cleantech company that wants to produce lithium hydroxide for electric car batteries. Construction of the converter has begun in Guben, Germany. BYD uses the raw materials in their batteries and electric cars. After being the market leader in China, they now want to expand internationally.


    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.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

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

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    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



    Related comments:

    Commented by André Will-Laudien on April 18th, 2024 | 07:15 CEST

    Attention Nvidia! The turnaround check for Nel ASA, Saturn Oil + Gas, Lufthansa and TUI

    • Mining
    • Oil
    • AI
    • Travel
    • renewableenergies

    It looks like a peak is forming in Artificial Intelligence. The most prominent share here is Nvidia. With a spectacular rally, the value has surged by over 100% in just 6 months. However, the share price is now stuttering, and there have been no new highs for days. The charts for TUI and Lufthansa also show an upward reversal. The latest wage negotiations have tightened the cost structure considerably. Also, a significant amount of revenue has been lost due to the numerous strikes. And now the Middle East crisis is flaring up, making the entire region a risk for holidaymakers. However, the rise in oil prices is giving oil companies a new lease of life. Here is a list of interesting investments.

    Read

    Commented by Juliane Zielonka on April 18th, 2024 | 07:00 CEST

    Volkswagen, Altech Advanced Materials, BYD - who can benefit from China's rise

    • Innovations
    • Technology
    • Electromobility
    • Batteries

    Chinese companies such as BYD benefit from state subsidies and domestic access to raw materials. BYD's subsidies have risen from EUR 220 million in just three years to EUR 2.1 billion. These sums are helping BYD dominate the Chinese electric vehicle market and increasingly penetrate the European market. Volkswagen cannot escape the pull of China either. As part of its "In China, for China" strategy, Volkswagen is expanding its cooperation network with Chinese partners. The aim is to reduce costs significantly in the development of EV technology. For companies like Altech Advanced Materials, close cooperation with Chinese market leaders such as BYD and Volkswagen offers the opportunity to commercialize innovative battery technologies that meet the needs of the changing market. One of these innovations, made in Germany by Altech Advanced Materials, increases the longevity of EV batteries by 30%. Here are the details.

    Read

    Commented by Armin Schulz on April 17th, 2024 | 06:45 CEST

    Barrick Gold, Globex Mining, BP - Commodities In the spotlight: Supercycle started?

    • Mining
    • Gold
    • Silver
    • Commodities
    • Oil
    • Gas

    Global demand for commodities is reaching new heights, partly driven by increasing geopolitical tensions. The exchange of attacks between Iran and Israel is a case in point. This conflict, deeply rooted in religious and political differences, continues to escalate and could have far-reaching consequences for international stability and commodity markets. With this latest escalation of the Middle East conflict, security aspects in the global competition for important resources such as gold, silver and copper are taking center stage. China is demonstrating its hunger for resources. However, the price of oil has also risen recently. There has long been talk of a commodity supercycle. Perhaps it has now finally begun. Where should one invest now?

    Read