February 27th, 2023 | 14:50 CET
Mercedes-Benz, Almonty Industries, Rheinmetall - New battery trend from Korea
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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: Circular economy at the limit
Mercedes-Benz is a time-honoured company that has reinvented itself in recent years. In the meantime, the Swabians are even phasing out the model designations that were introduced for e-cars. The new G-Class is also available as an electric model without adding a name. Mercedes is thus taking into account that electric cars are no longer exotic. And because the first electric cars will soon end up on the scrap heap, Mercedes is also investing in recycling. Batteries, in particular, are to be dismantled and their components reused. A plant has been built at the Kuppenheim site not far from the town of Rastatt in Baden, which aims to score points with a recycling rate of up to 96%. At present, the project is still a pilot plant, which is to be further expanded in order to ultimately close the recycling loop. The project is being scientifically supervised by the Karlsruhe Institute of Technology (KIT).
Mercedes-Benz is hitting a nerve with its quest for recycling. An intact recycling economy around industrial products has been the wish of environmentalists for decades and makes sense, especially against the background of scarce raw materials. However, only materials that have already been used can be recycled. New battery compositions could continue to rely on raw materials. One of these raw materials is tungsten.
Almonty Industries: Tungsten hope from South Korea
The metal, primarily known as the filament in light bulbs, has numerous other applications, such as in alloys. Meanwhile, tungsten is increasingly becoming a battery metal as well. Thanks to tungsten, batteries are expected to have a very high power density and the ability to be charged quickly. Batteries for e-cars should be able to be charged within less than 5 minutes. At present, the tungsten market is still strongly dominated by China. However, the Sangdong mine is currently being built in South Korea under the management of Almonty Industries - it is set to become the largest production facility outside China.
Recently, CEO Lewis Black presented Almonty at the 6th International Investment Forum (IIF). The CEO looks back on a good year for tungsten - the price for the metal recently increased by close to 50%. The Sangdong mine is scheduled to go into production from 2024. While there have been some delays to the schedule recently, Black emphasized that they prefer to plan conservatively in order to surprise positively afterwards rather than communicating overly ambitious schedules to the outside world. However, he said the budget remains on track despite the recent delays. Almonty Industries' stock has been in favourable waters again for several weeks - a further comeback is not ruled out.
Rheinmetall: War winner has further potential
Demand for tungsten is also rising: The war in Ukraine has caused global spending on armaments to soar. Shares like Rheinmetall are booming. Investors are already expecting further orders. Statements such as those made by the new Minister of Defence, Boris Pistorius, suggest that shareholders of defence stocks may well have even higher expectations for the share prices: Pistorius cited NATO's target of 2% military spending measured against economic output as a possible new spending minimum. Over a one-year period, the Rheinmetall share has gained 147%.
With a view to the coming months, all the signs look as if Rheinmetall could continue to grow. But defense companies are also dependent on raw materials. The tungsten market, which is primarily dominated by China, could have potential. With production set to start in 2024, the timing could be perfect for Almonty Industries. From today's perspective, the stock still has significant reserves and thus offers advantages over obvious crisis winners.
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