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March 10th, 2023 | 10:08 CET

Plug Power and Nordex disappoint, and a milestone for Manuka Resources

  • Mining
  • Vanadium
  • renewableenergies
  • Batteries
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The shift to renewable energy is being accelerated significantly by policymakers and industry, but companies continue to struggle to meet their plan targets. Nevertheless, the market outlook is optimistic that the transformation to alternative energy will continue to gain momentum. One of the cost drivers is the high cost of raw materials, which has increased significantly again due to the sanctions against Russia. Manuka Resources is still a young player in the market that could significantly cushion the shortages of the critical raw material vanadium, which is needed for energy storage systems.

time to read: 5 minutes | Author: Stefan Feulner
ISIN: PLUG POWER INC. DL-_01 | US72919P2020 , NORDEX SE O.N. | DE000A0D6554 , Manuka Resources Limited | AU0000090292

Table of contents:

    Nordex - Slides deeper into red territory

    Profitability remains the problem child for the Hamburg-based wind turbine manufacturer. Higher costs, the blown supply chains and production delays due to a cybersecurity incident caused an operating loss of EUR 244 million for the full year 2022, after a profit of EUR 53 million the previous year. The profit margin, which Nordex had previously forecasted at minus 4%, fell to minus 4.3%. This was below the estimates of the analyst average. In the previous year, this figure had been up 1%.

    On the other hand, sales grew by 5.5% to EUR 5.7 billion, exceeding the forecasts of financial experts. With rising prices, a good order intake of 6.33 GW was recorded, up from 7.95 GW in the previous year, with growing market shares.

    "2022 was another challenging year for manufacturers in our industry due to the numerous macroeconomic headwinds. However, despite these challenges, our team maintained solid order momentum and significantly increased sales prices, providing a good foundation for 2023. In the medium term, wind markets continue to show great potential with strengthening political momentum for renewables in Europe and the US. Together with further stabilization of the macroeconomic environment, this could pave the way for our medium-term margin target," explains José Luis Blanco, CEO of the Nordex Group.

    The Hamburg-based company will report its final figures on March 31, 2023. Following its preliminary annual figures, analyst firm Jefferies has left Nordex at "buy" with a price target of EUR 16.

    Manuka Resources - Milestone at Vanadium project

    The dependencies on China and Russia are enormous for many critical raw materials needed for the energy transition. This also applies to the industrial metal vanadium, which is existential for energy storage systems. While lithium is preferred for electric cars, vanadium is preferred for large-scale industrial applications. Vanadium-based batteries lose significantly less energy than lithium-ion batteries, which is why vanadium redox flow batteries find their application in solar or wind power systems. According to industry experts, demand for the critical metal is expected to double by 2026.

    Alongside China and Russia, Manuka Resources could become the most important player in the world vanadium market. Its South Taranaki Bight (STB) project, recently acquired 100% by Trans-Tasman Resources Limited, could be responsible for 15% of global annual production in the future. That would make the Australian company the largest vanadium producer in the Western world. A preliminary feasibility study has already been completed for STB, and more than USD 50 million has been invested to date. The project has a granted mining license and an exceptionally large JORC resource of 3.8 billion tonnes. An initial JORC 2012-compliant indicated and suspected vanadium resource of 3.2 billion tonnes at 0.05% vanadium pentoxide (V2O5) has been announced. With 1.6 million tonnes of contained V2O5, the project is one of the larger deposits drilled globally. Assuming a BFS1 production rate of 5Mt of VTM concentrate per year, annual concentrate production would contain 25,000t of V2O5. The project already has a mining license for 5Mt per year, with an initial mine life of 20 years. A bankable feasibility study has also been launched.

    Commenting on the impressive results, Alan Eggers, Executive Director of Manuka and Chairman of the Taranaki VTM Project, said, "There is sufficient understanding of the enormous, low-cost titanium magnetite iron sands potential of the Taranaki VTM Project. Although the vanadium potential is known, no vanadium resource has yet been estimated. Recently completed work indicates a very large resource in contained vanadium, making the project a potential world-class V2O5 producer.

    This new work with respect to the two critical minerals - recoverable vanadium and titanium - confirms the potential to further improve the robust economics of the iron ore component of the project, with the prospect of substantially offsetting the estimated production costs of USD 20 to USD 24 per tonne of iron ore concentrate through substantial vanadium and titanium metal by-product credits. The completed prefeasibility study (PFS) and initial BFS work have demonstrated that iron ore concentrate production is cost-effective, with CO2 emissions per ton of concentrate shipped less than half the cost of other iron ore concentrates worldwide."

    In addition to the high-grade mineral deposit, Manuka Resources also maintains two prospective mining projects in the Cobar Basin, with a total exploration zone of 1,150 sq km. With the Mt Bobby gold project, the Australians own one of the continent's historically richest gold mines, which mined 500,000 ounces of gold at an average grade of half an ounce per ton of ore in past production. The Wonawinta Silver Project, in turn, has a mineral resource estimate of 51 million ounces, making it one of Australia's largest silver producers. In addition, 200,000t of lead in place has been estimated. Despite the excellent prospects, the market capitalization of Manuka Resources is only EUR 17.10 million.

    Plug Power - New Year, New Luck

    Also struggling with profitability is hydrogen specialist Plug Power, which presented its full-year 2022 figures last week. Thus, in addition to the profit, the US company was also significantly below analysts' forecasts in terms of revenue. After several downward revisions, revenue reached USD 701.4 million for the full year. The Company's cash burn rate remains high and is an alarm signal for investors, who will probably have to accept further dilution in the current fiscal year. Cash on hand fell to USD 0.69 billion, while securities available for a quick sale were almost unchanged at USD 1.33 billion.

    In terms of outlook, Plug Power CEO Andy Marsh remained steadfast despite the lapses. He predicts sales of USD 1.4 billion for the year as a whole. This should be helped by orders such as that of the energy supplier Uniper, which commissioned Plug Power to design the electrolyzer technology for Uniper's Maasvlakte site in the port of Rotterdam. Here, Uniper plans to build a plant to produce green hydrogen. The plant will start in 2026 with an initial capacity of 100 MW, to be expanded to 500 MW by 2030 at the latest. Under the agreement, Plug Power will supply ten proton exchange membrane (PEM) electrolysis modules for the H2Maasvlakte project, provided Uniper makes a positive final investment decision. According to Uniper, the great factor for Plug Power was the high degree of standardization, reliability and flexibility.

    Nordex and Plug Power disappointed in terms of profitability in the reported annual figures. Manuka Resources announced a first indicated and suspected vanadium source of 3.2 billion tonnes, which could make the Australians the largest producer in the West.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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