December 30th, 2021 | 11:35 CET
Standard Lithium, Manganese X Energy, Daimler Truck - The future of the battery
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"[...] Nickel, therefore, benefits twice: firstly from its growing importance within batteries and secondly from the generally growing demand for such storage. [...]" Terry Lynch, CEO, Power Nickel
Standard Lithium - Big financial injection
Lithium is essential for lithium-ion batteries. After Volkswagen announced that they would shift more and more production towards e-cars, the lithium price shot up. Demand will increase significantly in the coming years. In 2020, sales were only 305,000 metric tons; by 2030, it will likely be between 1.5 and 3 million metric tons. Canadian lithium producer Standard Lithium plans to supply part of this demand. The Company will use the infrastructure of its partner Lanxess, which is also a customer.
The Company's value rose all year until a sensitive setback in November. The setback was caused by a major short sale by Blue Orca Capital, which believed that Standard Lithium was overvalued. The sell-off was quickly ended when the entry of Koch Investments Group was announced. Their investment amounts to USD 100 million. The group acquired about 13.5 million shares at USD 7.42. With this, the takeover rumors about Standard Lithium should be over.
In November, the PEA study was officially submitted to the authorities. Annually, 30,000 tons of EV-compliant lithium could be produced. With the money of the Koch Group, it should be possible to take the step to become a significant producer. A triangle formation has currently formed in the chart. As an interested investor, one should wait to which side the triangle is resolved and then look for an entry. The coming year remains exciting in the lithium market.
Manganese X Energy - PEA about to be completed
The demand for cobalt for lithium-ion batteries is high, but deposits are limited and could be depleted in around 11 years. In addition, it is toxic, expensive and often associated with child labor. Elon Musk announced in 2020 that he would do without cobalt in the Tesla batteries if possible. An alternative is manganese, and this is where Manganese X Energy from Canada comes into play. The Company focuses on the exploration of manganese, copper, nickel and cobalt. The latter three metals are found at the Peter Lake project.
The main project, Battery Hill, is located in Woodstock and has large manganese deposits. The area is 1,228 hectares in size and consists of four manganese zones with 55 claims. A NI 43-101 report was filed in September indicating that the project area contains 34.86 million tonnes of proven and indicated mineral resources grading 6.42% manganese. Furthermore, an additional 25.91 million tonnes at a grade of 6.66% is suspected. CEO Martin Kepman expects the project to have a life of between 25 and 30 years, which he mentioned in an interview with Proactive.
The PEA study, being conducted by Wood, is expected to be completed in 2-3 months. It is being prepared in close coordination with partner Kemetco Research, which in turn is responsible for the metallurgical program. A positive outlook from the PEA study could certainly boost the stock, which is currently trading at CAD 0.30. The share has been trading between CAD 0.225 and CAD 0.42 since the beginning of August. It is a long way off from its annual high at CAD 1.04.
Daimler Truck - Successful debut
On December 10, the Daimler Truck share celebrated its stock market debut. The move had been planned for a long time, and after 125 years, the bus and truck division is independent. This should allow both parties to unleash their full potential. Daimler Truck is producing the eActros in series for the first time at its Wörth plant. The new electric truck has 3-4 batteries on board and is priced 3 times higher than a conventional diesel. However, the vehicle scores points in terms of maintenance and wear. Here, the costs are significantly lower than for a diesel vehicle.
The first major order for 120 electric trucks came from Sweden from the transport company Einride. A good start for the head of the Truck division, Martin Daum. Above all, he wants to increase the return on sales, which is currently between 6% and 8%. The target is at least 10% by 2025. To achieve this target, fixed costs are to be reduced by 15%. If the Corona Crisis normalizes, as there is also a chip shortage in the truck sector, sales should be able to increase.
After its start at EUR 28, the share rose to EUR 35.10 and is currently trading at EUR 32.18. The stock market start can be described as successful. In the short term, selling pressure could arise if, for example, larger ETFs sell their positions. Goldman Sachs and JPMorgan analysts are optimistic about Daimler Truck in the long term. Compared to the industry, the stock is still favorably valued.
There will be some new developments in battery development in the coming years. Lithium will undoubtedly be needed, so Standard Lithium is well-positioned. Manganese X Energy provides an alternative to cobalt; the upcoming PEA should be looked at closely. At Daimler Truck, the batteries are needed for their trucks and buses. Especially in this segment, further developments in batteries are enormously important to achieve the breakthrough.
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