The Race for the Arctic Region: Rheinmetall Needs Steel, Champion Iron Expands into Europe, Strategic Resources with Two Promising Projects

Rheinmetall: A Boom in Orders and New Approaches to Procurement

Thanks to sharply rising defence spending by NATO countries, Rheinmetall is experiencing historic growth and is now considered a leading defence contractor. The automotive division no longer plays a role. Rheinmetall's order backlog reached approximately EUR 73 billion at the end of the first quarter. To fulfill these orders, the Group has already invested around EUR 8 billion in new manufacturing facilities, acquisitions, and supply chains in 2023 and 2024. By 2027, annual production capacity for artillery ammunition is set to rise to 1.1 million shells. At the same time, USD 41 million is being invested in modernizing the US subsidiary, including for the XM30 infantry fighting vehicle program and other US defence projects. To comply with strict environmental regulations and reduce Scope 3 emissions—that is, so-called indirect greenhouse gases along the value chain—the Group is relying on CO2-free European steel. It has signed a memorandum of understanding with the Swedish manufacturer SSAB to this end.

Champion Iron Expands Capacity and Becomes a Premium Supplier

The Canadian-Australian ore producer Champion Iron is leveraging the transformation of the steel industry to focus on high-purity concentrates in Canada. For the DRPF project in Québec, Canada, the company invested approximately USD 500 million in a processing plant to produce a concentrate with an iron content of up to 69% Fe. Following successful test runs in the first few months of the year, commercial production began on schedule at the end of June. In addition, Champion Iron is moving forward with the Kami project, in which Nippon Steel and Sojitz hold a minority stake and are contributing up to USD 490 million in capital. With the acquisition of the Norwegian company Rana Gruber for approximately USD 300 million, the company also successfully entered the European market in April.

Strategic Resources Develops Key Project for Green Steel

In the shadow of the major defence and steel giants, Strategic Resources is moving forward with the BlackRock project in Québec, Canada—a mine with adjacent processing capacity. The company is pursuing a three-phase strategy, the first phase of which involves the construction of a modern pelletizing plant at the deep-water port of Saguenay. According to the pre-feasibility study, the first phase offers a post-tax net present value of USD 957 million and an internal rate of return of 25%. A ten-year agreement with Javelin Global Commodities secures both the supply of raw materials and the purchase of the pellets, and also provides for a credit line of up to USD 150 million. The company engaged the major bank Société Générale to provide USD 300 million in debt financing. The project is supported by the major shareholders Orion Mine Finance and Investissement Québec. Phase two will involve the installation of a direct reduction furnace, followed by the company's own mining operations at the Chibougamau site in phase three. Ultimately, the project aims to produce 562,000 metric tonnes of pig iron, 4,400 metric tonnes of ferrovanadium, and 118,000 metric tonnes of titanium slag annually.

Strategic Resources with Long-Term Vision: CAD 16 Million Market Capitalization

In addition to the iron project, Strategic Resources is also making its mark in the field of forward-looking energy technologies. In April of this year, the company signed a memorandum of understanding with Tyfast Energy to develop a Canadian supply chain for battery-grade vanadium oxide. Anode technology based on this raw material enables extremely short charging times and high cycle stability even under Arctic conditions. This promises significant advantages for heavy mining vehicles and military land systems operating in Arctic environments. Given that these regions have repeatedly been the subject of geopolitical tensions in recent months, this battery technology could be in high demand in the future.

Strategic Resources' share price, as reflected in its recent performance, suggests considerable skepticism: many investors seem to want to take a wait-and-see approach in light of upcoming developments. However, Strategic has already won over powerful partners with its plans. In addition, demand for raw materials in the steel industry is not expected to subside in the foreseeable future. The company's involvement in innovative battery technology also offers promising upside potential. With a market capitalization of only around CAD 16 million, the stock should be considered highly speculative. On the other hand, this modest valuation also offers significant upside if the company delivers tangible progress. Strategic Resources offers exposure to exciting projects but remains a highly speculative investment.