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Lewis Black, CEO, Almonty Industries

Lewis Black
CEO | Almonty Industries
100 King Street West, M5X 1C7 Toronto (CAN)

+1 (647) 438-9766

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Dirk Graszt
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15. November 2021 | 11:31 CET

Infineon, Almonty Industries, K+S - Profiting from supply bottlenecks

  • Tungsten
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It is not only the printing presses of the central banks that are causing inflation in the USA and Europe but also the supply bottlenecks in more and more sectors. The chip shortage has been known for some time, but there is already a shortage of raw materials such as steel, cement, copper, nickel, tungsten, and even fertilizers. The infrastructure package of the USA, which was passed a good week ago, contributes its part to this. In addition to the existing packages, another USD 550 billion package will further fuel demand in the commodities mentioned above. The beneficiaries will be the producers, three of which we take a closer look at today.

time to read: 4 minutes by Armin Schulz
ISIN: DE0006231004 , CA0203981034 , DE000KSAG888

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



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

Infineon - Forecast increase for the coming fiscal year

The chip shortage in the automotive sector brought attention to the disrupted supply chains. The German Association of the Automotive Industry expects 400,000 fewer vehicles to be produced in Germany alone. There is no improvement in sight. Worldwide, the Corona Crisis has led to more digitalization. For this, more chips are needed, and cars are also increasingly becoming rolling computers. For chip manufacturers like Infineon, the situation is a stroke of luck. They can no longer keep up with production.

The opening of the new plant in Austria in September came at just the right time because demand in the renewable energy and electric vehicle sectors continues to grow, so prices will also continue to rise. That means higher margins and, therefore, more profit. It was reflected in the final figures for the fiscal year that ended September 30. Last Wednesday, record sales of EUR 11 billion were announced, and profits tripled to EUR 1.7 billion.

Group CEO Ploss is also targeting a new record for the coming fiscal year. Sales are expected to rise to between EUR 12.2 billion and EUR 13.2 billion. The profit margin is also expected to increase by around 2.3% to 21%. The analysts of Deutsche Bank, Kepler Cheuvreux, Goldman Sachs and Berenberg rated the stock as "Buy". Several other analyst houses gave the rating "Overweight". The share had already rallied to EUR 43.21 in the run-up to the figures. The stock is currently trading at EUR 42.80.

Almonty Industries - Sandong Mine to open in 2022

Tungsten is used mainly in metallurgy and light bulbs. Due to its high heat resistance and density, it has also been used in military and aerospace applications. But demand for the raw material is growing because a lot of it is needed if a green future is to be implemented. Electric cars and their charging stations and even nuclear power plants need a lot of tungsten. Almonty Industries is on its way to becoming the largest producer outside China. After sudden export stops from China, as recently for magnesium, the pressure grows to become less dependent on the Middle Kingdom worldwide.

The Company is experienced in tungsten, having already mined tungsten in Spain and Portugal. The Sandong mine in South Korea, which is currently being brought into production, is home to one of the world's largest deposits of the commodity. On October 27, the Company reported that 25% of the underground mine had been completed. The guest house has been renovated, the river and the road have been diverted. Currently, 50 people are working at the site, and this number will gradually increase up to 125. According to CEO Lewis Black, the project is on schedule and on budget for commissioning in the fourth quarter of 2022. The Company was also able to meet the last condition precedent for the KfW-IPEX loan and expects confirmation from the bank soon.

Planning security is provided by a 15-year offtake agreement already concluded with the Plansee Group, the largest shareholder. Deutsche Rohstoff AG holds 12.2% of the shares, closely followed by the CEO with 12.1%. Since the beginning of September, the share has been running sideways between CAD 0.82 and CAD 1.00. If there are no difficulties in developing the mine, it is only a matter of time before the all-time high at CAD 1.30 is tested. Interested investors should watch the CEO's presentation from the International Investment Forum. The presentation is available on YouTube.

K+S - Problems with the balance sheet

If one talks to farmers in the area, one hears more and more complaints that there is no more fertilizer. It is surprising because, with K+S, there is a company in Germany that could provide the supply. Therefore, the supply bottlenecks here are particularly surprising. Potash prices have exploded this year. In Brazil, the price per ton has, in some cases, tripled compared to the previous year. Of course, this is excellent news for the Company, after everything looked quite different at the beginning of the year.

With the sale of the salt business in the USA for USD 3.2 billion, the debt mountain was drastically reduced. The Group intends to focus on its core business in the future. It is going well this year, as the Group once again raised its forecast when announcing its figures for the third quarter. Sales increased by 32% YOY to EUR 746 million. EBITDA was EUR 121 million. In the course of this, assets that were impaired last year were also written back.

It is precisely here that K+S currently has a problem, as BaFin commissioned the German Financial Reporting Enforcement Panel (Deutsche Prüfungsstelle für Rechnungslegung) in February to investigate the connections with the impairment. Although CEO Lohr believes operating earnings of EUR 1 billion are possible in 2022, the stock has been on a downward slide due to the ongoing audit. The share was at EUR 15.30 the day before the announcement and then sold off to EUR 13.41. Currently, the price is at EUR 14.53, and the valuation ratios are still favorable.

All producers of currently rare goods are benefiting from the supply bottlenecks, as products are literally being torn from their fingers. Infineon serves the still-growing market of chips and increased its production due to the new factory. Almonty Industries will start up one of the world's largest tungsten mines at the end of 2022. K+S benefits from the high price of potash but is currently struggling with BaFin.


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

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Related comments:

02. November 2021 | 12:14 CET | by Fabian Lorenz

Varta, Valneva, Almonty Industries: It is getting close!

  • Tungsten

Volkswagen, SMA Solar, Asos are just a few examples; hardly a day goes by without companies from a wide variety of industries complaining about shortages. Be it computer chips for the automotive industry, industrial raw materials for production or transportation options. But there are also winners. Among them is tungsten producer Almonty Industries with its project of the century in South Korea. Germany's Varta is looking to profit from the battery shortage, and excitement is building ahead of the numbers. And Valneva, after its successful capital increase, is hoping that corona vaccines will continue to be in demand.


19. October 2021 | 12:46 CET | by Carsten Mainitz

Nvidia, Almonty Industries, BP - Scarcity drives prices!

  • Tungsten

The shift from fossil fuels to renewable energy sources is increasing the need for industrial metals. Copper's excellent thermal conductivity, along with its corrosion resistance, ease of processing, strength, durability and formability, offer unbeatable advantages in solar thermal applications. Tungsten's properties also play an increasingly important role in power, lighting, medical and aerospace applications. Companies producing the critical metal have significant upside opportunities in this regard.


13. October 2021 | 13:23 CET | by André Will-Laudien

BASF, Almonty Industries, Millennial Lithium, BYD - All sold out?

  • Tungsten

Anyone who can offer scarce raw materials today is in a fortunate position as far as business prospects are concerned. In particular, metals and battery raw materials are in high demand and have become a bone of contention in globalization. That is because many critical metals are majority-owned by China, meaning that the regime decides on potential allocations to foreign countries. Admittedly, the Middle Kingdom wants to stay in business with the West, so long-term contracts exist. Nevertheless, the domestic industry is naturally given preferential treatment; we can only hope for political stability and incremental improvements in the West. Who are the interesting players in the tight commodity market?