January 18th, 2023 | 19:01 CET
E-cars? Here comes the next big thing! Mercedes-Benz, Almonty Industries, Varta
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"[...] 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
Mercedes-Benz: Batteries need innovations
The prototype Mercedes EQXX shows that it is worth targeting the anode for innovations. The next-generation 1-litre e-car is said to be able to drive 1,000 km on just one battery charge. Instead of graphite, as in the past, silicon is to be used in the anode. Other advantages: The battery generates more power per unit of weight and weighs only around 495 kg. While conventional Mercedes-Benz models have a capacity of about 160 Wh/kg, the EQXX increases this to around 210 Wh/kg. In addition, the silicon used can store even more lithium ions than previous graphite solutions.
But silicon is not the end of battery development. A new approach is targeting charging speed in particular. The British company Nyobolt relies on tungsten, or more precisely, niobium tungsten oxide. This approach should enable e-cars to be charged around ten times faster. Nyobolt expects to be able to charge one by 90 percentage points within five minutes. The UK innovation shows that the battery technology market is in flux. What is hot today may no longer be in demand tomorrow. Combinations of different batteries or technologies are also conceivable in the future - for example, to enable high power density and convenience during charging at the same time. Companies like Mercedes-Benz have long since recognized that the key to satisfied customers lies in modern technology. The share price has risen sharply in the past month but could come under greater pressure again in the short term.
Almonty: Tungsten as the next big thing?
At first glance, the shares of Almonty Industries seem to have a lot of room for improvement. The Canadian company is one of the few tungsten producers listed on the stock exchange. The Company currently mines in Portugal and thus maintains knowledge often passed down over generations. The mining of tungsten is considered to be particularly challenging. Much more significant for Almonty's share price, however, is the development of the Sangdong mine in South Korea. This project is close to completion - the mine is under construction, and permits are gradually trickling in. One of the investors in the mine is the German Kreditanstalt für Wiederaufbau (KfW). In the coming months, the project is expected to pick up speed and ultimately provide the world market with around 30% of the tungsten produced outside China. In addition to KfW, the Austrian Plansee Group is also involved and has signed an offtake agreement.
After months of languishing, Almonty's stock has now rebounded. The market recognizes that tungsten can be an essential raw material for the automotive industry. Other applications include mining, energy, and aerospace. Given the great skepticism that the market showed towards growth companies just a few weeks ago, there is also further potential for Almonty Industries. A market capitalization of around EUR 126 million compares with cash costs of USD 110 per ton and a mine life of up to 90 years. The tungsten price is currently quoted at around 320 USD/t. Investors should keep Almonty Industries' share on their radar not only because of the innovations around battery technology - this is not about innovative concepts competing for the favour of the industry worldwide, but about tangible raw materials, without which innovations are impossible.
Varta: Patience is needed here
Varta would also like to be part of the latest innovations. The German battery specialist has gained the trust of Apple and Co. in recent years. Many users of hearing aids also rely on the powerful button cells. However, this data is no reason for goosebumps among investors. For years, investors waited for news about batteries for electric cars. Last year, Varta let the cat out of the bag - high-performance auxiliary batteries for sports cars are expected to bring in new sales - but this did not go down well on the market. Although the share price has recently risen again, it remains a shadow of days gone by. One swallow does not make a summer here - investors should first wait for fundamental developments. Only when the figures at Varta are right again, and fantasy is added can potential arise.
It is not easy for those who want to invest in innovative technology: Some companies are not listed on the stock exchange. Others offer no real innovation or deliver nothing but empty promises. More honest, however, are commodity projects directly related to battery technology innovations, such as the Sangdong project in South Korea. Since the tungsten price is constantly rising and China dominates the market, the project and the associated Almonty Industries share are interesting.
Conflict of interest
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