March 15th, 2023 | 10:18 CET
JinkoSolar, Manuka Resources, BYD - Vanadium raw material as an insider tip
Table of contents:
"[...] We will trigger indirect creation of 1,665 new jobs nationwide, while directly employing 300 staff - 270 operational and 30 administrative. [...]" Dennis Karp, Executive Chairman, Manuka Resources Limited
JinkoSolar - Margin shrinks
Vanadium redox batteries (VRBs) are a promising technology for storing energy from solar plants. Most solar systems generate energy only during the day when the sun is shining and therefore have limited capacity to supply power during the night or in bad weather. However, VRBs can store excess energy generated during the day and release it when needed to ensure a continuous power supply. Renewable energy is heavily subsidized in the US and Germany - ideal conditions for solar module manufacturer JinkoSolar.
On March 10, the group presented its figures for the 4th quarter which clearly show that it is benefiting from the energy turnaround. The Company significantly increased its module shipments compared to the previous year. In December 2022, JinkoSolar's high-efficiency N-type monocrystalline silicon solar cell set a new record with a maximum efficiency of 26.4%. In Q4, N-type modules with a capacity of about 7 GW were shipped, reaching the set target of 10 GW. The Company reported total revenue of USD 4.41 billion for the fourth quarter, up 55.8% from the previous quarter and 85.5% from a year earlier. Gross profit was USD 620 million, up 39.2% from the previous quarter and 61.7% YOY.
At first glance, these are very good figures, but the margin has fallen. This upset shareholders and the share price fell to USD 46. The China risk certainly also plays a role here. In the long term, however, more and more competitors should fall by the wayside in the price war. Currently, one is already paying USD 50.46 for a share. Most analysts remain bullish on the share.
Manuka Resources - 25,000 tons of vanadium per year possible
Manuka Resources operates the Mt Boppy gold project and the Wonawinta Silver project in New South Wales, Australia. Both properties are located in the Cobar Basin and have historical production. On February 14, the Company released a strategic exploration report highlighting the potential of the projects. AUD 8 million is expected to be spent on exploration activities this year and next to increase the inventory of indicated mineral resources. In addition to gold, silver and copper, other base metals are expected to be unearthed in the 24,000 m drilling program. A resource target of 22-35 million ounces of silver and 250,000-530,000 ounces of gold has been issued. A processing plant already exists.
These are good conditions to help fund the latest achievement, the Taranaki Green VTM project off the coast of New Zealand. The area contains 3.2 billion tons of iron sand, vanadium and titanium according to a JORC-compliant study. With 1.6 million tons of vanadium, it is one of the largest deposits in the world. It is currently estimated to have an annual production capacity of 25,000 tons of vanadium. That would make the Company the world's second-largest producer in one fell swoop. Titanium accounts for 8.4% and iron ore for 55-57%. A mining license has already been obtained, and the costs for mining are very favourable, while CO2 emissions are very low compared to the competition.
Mining is done by ship, which sucks up the sand with the help of a magnetic separator. As the demand for vanadium, in particular, is expected to increase significantly in the coming years, the growth prospects are very good. Those who want more information about the Company should watch the company presentation on YouTube from the International Investment Forum. With the announcement of the acquisition of the Vanadium project last November, the share price rose to AUD 0.205. Currently, the share is available for just AUD 0.065. If the Company succeeds in securing financing for the vessel as planned in Q1 2024, the stock will face a revaluation.
BYD - Bloomberg report denied
Whether vanadium is also an option for electric car batteries remains to be seen. BYD has the leading batteries for electric mobility with its Blade batteries. The latest Bloomberg report, which stated that BYD would no longer supply Tesla, was initially denied by BYD. Meanwhile, Elon Musk also denied the report, tweeting, "Media report is false. The relationship between Tesla and BYD is positive." That should ease the tension among shareholders again.
The group wants to conquer the market outside China with its electric cars. At the same time, massive investments are planned in the commercial vehicle sector. More than USD 20 billion is to flow into this division by 2025, as reported by the Wall Street Journal. In particular, research, capacity expansions and product development are to be financed. Currently, the Company mainly offers electric buses. Looking at sales figures, the Company leads the competitive Chinese market.
Despite the optimistic outlook, there are concerns due to strained Sino-American relations. As with JinkoSolar and Alibaba, there are markdowns in the stock due to this risk. The share is currently trading at EUR 23.67 and has formed a downtrend with the last price slide. In addition, Warren Buffet's Berkshire Hathaway sales are likely to still cause restraint among buyers.
Vanadium could become essential for the energy transition. In order to avoid becoming dependent on China and Russia, alternatives should be developed. One of these alternatives could be Manuka Resources. Production here could start in the 1st quarter of 2026. JinkoSolar could also benefit from the new batteries, making solar energy even more attractive. BYD currently has its Blade batteries on offer. It is not yet clear whether vanadium will also find its way into the batteries of electric cars.
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