June 8th, 2023 | 07:15 CEST
Recycling as an investment idea: Regenx Tech Corp., SMA Solar, Mercedes-Benz
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Regenx Tech: Platinum and palladium have never been so green
Admittedly: Mining is nowhere near as dirty as it once was. Contaminated soils, huge tailings piles and toxic drinking water are fortunately a thing of the past in most regions of the world. But in mining, too, where you break an egg, you get a chip. The Canadian company Regenx Tech Corp. from Edmonton manages without any of the usual side effects of precious metals production. The Company wants to recycle catalytic converters and extract the precious metals palladium and platinum contained in them. The market for the CleanTech company is significant. Around 84% of the world's annual palladium supply is currently in catalytic converters. In addition to vehicles, there are also numerous catalytic converters in industrial plants that need to be gradually replaced. Currently, only about 30% of the palladium from catalytic converters is recycled.
The plants used for this purpose work but are not considered entirely environmentally friendly. Regenx wants to change this and has developed a process that can make up to 90% of the precious metals from catalytic converters usable again. The processing plants planned by Regenx are modular in design and should be able to process 10 tonnes of catalyst material daily. A plant is expected to recoup the necessary investment after only about one year. Regenx already launched its first processing plant in 2022. The Company has already won Davis Recycling, a US-based company from Tennessee as a partner to supply catalysts. Regenx is listed on the stock exchange in Canada and Germany and currently has CAD 36.4 million on the balance sheet.
Mercedes-Benz also relies on recycling
The business model of the CleanTech company is so interesting because it not only seems suitable for extracting precious metals from catalytic converters at low cost but also because it solves typical problems of industrial companies. Whoever uses raw materials will have to account for their origin and climate footprint in the future. Existing regulations are likely to become even stricter in the future. Those who can obtain these raw materials from recycled materials hold all the trump cards in this regulatory environment. Potential examples are carmakers such as Mercedes-Benz. This March, the Company laid the foundation stone for a sustainable battery recycling factory in Kuppenheim, Baden. "This foundation stone symbolizes the decisive step towards closing the recycling loop for Mercedes-Benz batteries. With a recycling rate of more than 96%, a 'mine of tomorrow' is symbolically being created here in Kuppenheim," commented Jörg Burzer, Member of the Board of Management of Mercedes-Benz Group AG, at the time.
Supply chains must become more sustainable
The mine of the future in the precious metals sector could come from Regenx Tech. Many future technologies, such as photovoltaic systems, fuel cells, and inverters, rely on precious metals. In addition, platinum and palladium currently come primarily from South Africa and Russia - two economies that more or less go their own geopolitical ways and, as in the case of Russia, are completely isolated in the Western world. Companies like the inverter manufacturer SMA Solar also attach great importance to recycling and want to minimize their carbon footprint.
Regenx Tech could help ensure that more climate-neutral precious metals are available in the future, making the supply chains of companies like Mercedes-Benz and SMA Solar more sustainable. As a potential additional business, the Company could also generate CO2 certificates, as Regenx's process is significantly greener than traditional mining. Regenx Tech plans to set up its processing plants in a CO2-neutral way. If the first plant is successfully established, bank loans could drive further growth.
Regenx is an exciting CleanTech stock and must be considered speculative because of the stage the Company is at. However, the first catalyst processing plant is expected to reach full capacity this summer. It is worthwhile to keep a close eye on the Company and the associated share.
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