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November 10th, 2023 | 09:00 CET

Screaming for a turnaround - Siemens Energy, Edison Lithium, Rock Tech Lithium

  • Mining
  • Lithium
  • renewableenergies
  • Electromobility
Photo credits: pixabay.com

The future belongs to green energy to achieve climate neutrality by the middle of this century. Despite political support, hydrogen, wind and solar stocks have suffered significant losses in recent months. The raw materials required for this have also slumped due to the threat of a global recession and are now at a two-year low, as in the case of lithium. In the long term, demand for critical raw materials will likely rise sharply again, heralding a new upward trend.

time to read: 5 minutes | Author: Stefan Feulner
ISIN: SIEMENS ENERGY AG NA O.N. | DE000ENER6Y0 , EDISON LITHIUM CORP. | CA28103Q2080 , ROCK TECH LITHIUM | CA77273P2017

Table of contents:


    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] 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

    Full interview

     

    Siemens Energy - Together into the future

    There has been a lot of fuss about Siemens Energy in recent weeks. After it became public that the Munich-based company was negotiating with the German government about possible state guarantees amounting to EUR 15 billion, the share price slumped by a further 40% to an annual low of EUR 6.40 after an already disastrous year. Since then, a countermovement has been underway, taking the share price close to the EUR 10 mark at EUR 9.53.

    The reason for the turnaround, at least in the short term, is a statement by German Chancellor Olaf Scholz. At the inauguration of the Gigafactory of Siemens Energy and the French gas company Air Liquide, he held out the prospect of a good solution to the current talks on state guarantees. Electrolysis modules are to be produced on an industrial scale in the Gigafactory. The production capacity in the first year will be one gigawatt, said CEO Anne-Laure Parrical de Chammard in the capital on Wednesday. Next year, it will be two gigawatts; from 2025, the capacity will increase to three gigawatts.

    "This means that we would produce around 20 gigawatts of electrolyzer capacity by 2030," said the manager. "That is twice as much as the target for Germany and half as much as the European Union's target." Despite the vision for the future, an investment in Siemens Energy is currently associated with considerable risk. Investors should monitor further developments for the time being.

    Edison Lithium - Ahead of the trend

    Sustainable energy solutions and the electrification of transportation are seen as the tools for achieving climate neutrality in the long term. The race for the most efficient and sustainable battery technologies is becoming ever more intense. For a long time, it looked as if the lithium-ion battery was the gold standard. For some time now, however, sodium-ion batteries have been increasingly coming to the fore and are already being used by BYD, the world's largest manufacturer of electric cars, in three models. In addition, CATL, the top dog among electric vehicle battery manufacturers in China, is already producing a sodium-ion battery.

    The advantages over traditional lithium-ion batteries are clear. Sodium is the sixth most common element on Earth and is available globally. The mineral is also easier to extract and more environmentally friendly. Sodium is less volatile than lithium, which ensures a safer production and recycling phase. As a result, the demand for sodium-ion batteries is expected to increase steadily, not only for electric vehicles but also for energy and grid storage.

    Junior mining exploration company Edison Lithium, which focuses on the sourcing, exploration and development of cobalt, lithium and other energy metal properties, is ahead of the curve, securing a 100% interest in four world-class sodium brine properties in Saskatchewan, positioning the Company to participate in the next upward wave of commodities for the energy transition. A technical report in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects for the alkali divestitures has been commissioned and should be available by the end of the year at the latest.

    In addition to the new acquisition, the Canadians hold mining rights over 148,000 hectares of land in the province of Catamarca in Argentina. The claims are mainly located in the two geological basins known as Antofalla Salar and Pipanaco Salar in South America's famous Lithium Triangle. The high-grade nature of the property is demonstrated by the fact that several interested parties have approached Edison Lithium's management to inquire about the development or sale of certain lithium brine mining rights.

    In addition, the exploration company, which recently raised a private placement at CAD 0.12 for a total of CAD 480,000 raised, holds mining rights on the Kittson property with cobalt deposits totaling 4,440 ha in northeastern Ontario. A spin-out is planned here, which could result in a significant upside for existing shareholders. The market capitalization of Edison Lithium is just CAD 3.00 million. Given the long-term increase in demand for battery raw materials, there is considerable potential here.

    Rock Tech Lithium - Acceleration of the Canadian business

    Declining lithium prices - the price of lithium carbonate has fallen by around 75% since peaking at CNY 605,000 per tonne and is currently trading at a two-year low of CNY 157,500 per tonne - have also had an impact on the share price of the German-Canadian cleantech company Rock Tech Lithium. Since its high for the year in mid-February alone, the share has corrected by more than 65% to its low for the year of EUR 0.75.

    A capital increase of CAD 10 million is currently underway. Around half of the funds raised will be used to advance the ongoing drilling at the Georgia Lake lithium project in Ontario. The project hosts an indicated mineral resource of 10.6 million tons grading 0.88% lithium oxide, an inferred mineral resource of 4.2 million tons grading 1% lithium oxide and an estimated after-tax internal return on investment of 36%. The remainder of the funds will be used for general corporate purposes and the development of Rock Tech's Canadian converter project, which is targeting its first lithium production in 2027.

    Meanwhile, Rock Tech and BMI-Red Rock are working together on the next steps for a new lithium converter in Ontario. The partners are conducting a site analysis to develop the former Norampac Paper Mill site in Red Rock into a key component of Ontario's battery supply chain. The advantage of the site under consideration is that Georgia Lake is only about 1 hour from Red Rock. The site could be used to build a raw materials handling facility as well as the lithium converter planned for Canada.


    The correction in commodities for electromobility, which has been ongoing for months, offers investors the opportunity to participate in the next upward wave at a significantly reduced level, as demand for these critical commodities is likely to increase considerably in the coming years due to the achievement of climate targets. Edison Lithium was able to secure four promising concessions with battery raw materials. Rock Tech Lithium is planning to accelerate its Canadian activities. Siemens Energy celebrated the inauguration of its Gigafactory and received the green light from the German Chancellor with regard to possible state financing.


    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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