07. July 2021 | 12:30 CET
Mineworx Technologies, Nel ASA, Nordex - Recycling Capitalism the coming super trend?
It all started with recycling bottles and moved on to renewable energy and current ESG criteria and sustainability thinking. This way of thinking is catching on more and more. The number of vegetarians and vegans is growing steadily. Recently, single-use plastic products have been banned and are no longer allowed to be produced in the EU. Less raw materials should be used, and the products should be used as often as possible - think of car-sharing - and at the end of their life, the raw materials used should be recycled. In this way, the world could make do with its existing resources, and future generations would benefit. This new approach is also finding its way into several publicly traded companies, three of which we will look at today.
time to read:
ISIN: MINEWORX TECHNOLOGIES LTD | CA6034652041 , NEL ASA NK-_20 | NO0010081235 , NORDEX SE O.N. | DE000A0D6554
Mineworx Technologies - Launching a new company
This former junior explorer is dedicated to recycling diesel catalysts. The division is set to boom in the coming years as more and more diesel vehicles are replaced by electric or hydrogen-powered cars. In contrast to the conventional melting process, which involves, among other things, the risk of explosions in the furnaces, the Company recovers the raw materials through a chemical process. It involves grinding the core materials of catalysts and using the patented process to convert them into a concentrate of platinum and palladium that can then be sold to refineries. This process significantly reduces emissions otherwise caused by smelting. More than 90% of the precious metals are recovered, unlike the smelting process, which only recovers 30%.
On June 24, the Company announced the formation of PGM Renewal LLC, along with joint venture partner Davis Recycling Inc. The subsidiary, Mineworx USA, will then hold 55%, while Davis Recycling will hold 45%. Mineworx will provide the pilot plant, which is already fully funded, and the technology, and the partner will provide sufficient catalysts and prepare them appropriately for smooth recovery. The plant is expected to be commissioned in the 3rd quarter and fully utilized from next year. The plant is then expected to generate sales of CAD 100 million with a gross margin of 20%. If this target is met, there will be a gross profit of CAD 11 million for Mineworx in 2022.
As an investor, mining assets in Spain should not be forgotten. The Company owns a wollastonite mine and an iron mine, where the drilling program is currently ongoing. If the historical results are confirmed, one can expect 60-100 million tons of iron ore. In the event of a sale, the mine alone will probably bring in more than the current market capitalization. So the stock is attractive not only because of the recycling approach. However, as this is the main focus, one can look forward to a positive development in the coming years. The prerequisite for this is sufficient diesel catalysts. The assumption that the number will increase is certainly not wrong.
Nel ASA - Receives support from the EU
The Twitter account Nel Hydrogen referred on July 5 to the European Union's Renewable Hydrogen Coalition initiative, which makes recommendations for the "Fit for 55 package." There, it talks about the first climate-neutral continent of Europe, where the hydrogen market has a size of EUR 150 billion and grows by EUR 20 billion annually. The technology is to come from Europe, and the cost of hydrogen is to drop between 40 and 55%. The initiative sees heavy industry, transportation, aviation and maritime as markets. By 2030, hydrogen is expected to be cheaper than fossil fuels.
For Nel ASA, this is excellent news because the Company is active in the markets listed. Made in Europe can be seen as protectionism for European hydrogen players. That would undoubtedly help Nel ASA. But not only the EU is a supporter, but also Norway itself, where the Company was founded. Norway wants to become climate-neutral by 2050 at the latest and under certain conditions, as early as 2030. The Company is a leader in Europe in terms of its hydrogen products. The product portfolio ranges from production technologies (green hydrogen) to hydrogen refueling stations and hydrogen vehicles.
The stock had formed a double bottom at 16 Norwegian kroner (NOK) between May and June and rose from there to NOK 21.45 at the end of June. Since then, there has been an almost 10% setback. If the price should fall below it again, the lows from May should not be undercut again to confirm the upward trend that has been set. Those who want to bet on hydrogen from Europe buy Nel ASA.
Nordex - Capital increase provides for price slide
Nordex provides renewable energy in the form of wind turbines. On July 6, the figures for the 2nd quarter were presented. On a half-year basis, order intake increased year-on-year from 2,531 to 2,781 gigawatts. A comparison of the quarters is difficult due to the starting Corona Crisis a year ago. Nordex currently still makes its leading sales in Europe at 54%, but South America is almost on par at 46%, at least in Q2. The Company has announced new orders again and again in recent weeks, such as 399 megawatts (MW) from Brazil on June 30 and 45 MW from Poland on July 5. There is still a rumored mega order from Australia, but the deal is still pending.
The Company's main problem remains profitability. Despite good order intake, the Company is in the red so far. For the coming year, the Company promises positive figures and an EBITDA margin of 8%. This year, the Company expects only 2%. The increase is likely to come from the new Delta 4000 turbine. Since the entire renewable energy sector is benefiting from the ever-improving environment, think of Joe Biden's projects, all signs are green for this stock.
However, if you look at the chart, the upward trend that brought the share up to EUR 19.87 has abruptly broken off. The reason is the surprising capital increase announced on July 2. 42.67 million shares at EUR 13.70 will be issued. The previous number of shares is 107 million. Shareholders' holdings will therefore be significantly diluted if they do not participate in the capital increase. Currently, one should wait and see how far the share will approach the capital increase price of EUR 13.70.
Companies all work in their own way to achieve the goal of sustainability for our planet. However, they all have one thing in common: they are committed to a better climate balance, and it remains to be hoped that these goals will be achieved in the foreseeable future. Only then will we not run out of resources in the coming decades.