03. September 2021 | 10:39 CET
Strong performance by Nel ASA, Defense Metals and JinkoSolar
The German parliamentary elections are on September 26. Climate protection is at the center of most political parties' election programs. The Greens are going out on a limb, aiming to achieve CO2 neutrality as early as 2035. However, it seems more than questionable whether these ambitious promises can actually be put into practice. The scarcity of raw materials such as copper, lithium and rare earth metals means a wide gap between aspiration and reality.
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ISIN: NEL ASA NK-_20 | NO0010081235 , DEFENSE METALS CORP. | CA2446331035 , JINKOSOLAR ADR/4 DL-00002 | US47759T1007
The plan of Baerbock & Co. becomes even more improbable if, in addition to the already increasing demand for industrial metals, the dependence on China is included. At the moment, 80% of rare earth metals are mined in China. These are of existential importance for producing magnets, which are needed for electric motors and wind turbines, for example. In addition, there is high demand in the defense industry.
Last year, the United States imported 80% of its requirements from China, and the European Union even obtained 98% from the Middle Kingdom. In order to reduce dependence on the People's Republic and prevent possible bottlenecks, the EU is working on proposals for boosting domestic production. The Biden administration is already one step ahead in this regard. In the USA, tax breaks for domestic manufacturers were recently passed.
The Canadian Company Defense Metals is well advanced at its 1,700-hectare Wicheeda Rare Earth Project in British Columbia, producing far more cheaply than its peer group because of its world-class infrastructure. Through drill programs already completed, indicated mineral resources total 4.89 million tonnes at an average grade of 3.02% light rare earth elements (LREO) and suspected mineral resources of 12.1 million tonnes at an average grade of 2.90% LREO.
In recent weeks, Defense Metals has taken important steps toward a successful future. A significant letter of intent was signed with state-owned Sinosteel Corporation, including the design of a pilot plant and the economic and technical feasibility of full-scale mine development. In addition, at the end of last month, the completion of the construction of the platforms in steep terrain for the 2021 drilling program, which should be between 2,000m and 5,000m, was announced. These were necessary to carry out the diamond drilling program for resource expansion and delineation.
In contrast to the fundamentally sound development, the share price corrected significantly in recent months. Currently, the stock market value of Defense Metals is only EUR 12.50 million. In the long term, a good opportunity to profit from the supply shortage.
Cooperation with a promising future
JinkoSolar's main subsidiary Jinko Solar Co. has signed a strategic cooperation framework agreement with Contemporary Amperex Technology Co. covering areas such as promoting carbon neutrality in the industrial chain, global development of solar-plus-storage business, and development of integrated solar-plus-storage solutions.
The companies plan to build a new energy technology ecosystem and promote solar energy in the energy sector to contribute to the achievement of carbon neutrality. Successful testing of support at USD 40 has brightened the chart picture significantly. Next prominent resistances are expected for JinkoSolar only at around USD 60 again.
Together for climate protection
Nel ASA and SFC Energy also want to contribute to the decarbonization of the economy. Together, the companies want to use "already mature products and proven technologies of the respective parties as a basis for the integrated offering" in their partnership. Together they want to focus on developing industrial solutions to replace less efficient diesel generators with more efficient systems based on hydrogen fuel cells in combination with the production of green hydrogen through electrolysis. Nel ASA is also heading towards a bottom, which would be completed if the resistance at EUR 1.52 is broken and would generate a buy signal.
Climate protection plays an important role in the election campaign. In this context, the scarcity of the required raw materials such as rare earth metals is underestimated by politicians. Defense Metals maintains a promising project outside China. The correction of the Norwegian hydrogen specialist Nel ASA is about to be completed. JinkoSolar offers an interesting trading opportunity at current levels.