13. October 2021 | 12:19 CET
XPeng, Central African Gold, Volkswagen - It will not work without metals
Decarbonization is the magic word when it comes to achieving the ever-tighter climate targets. The phase-out of coal and the move away from fossil fuels, oil and natural gas is a done deal. However, considerable quantities of copper, lithium, cobalt and nickel are needed to ensure the energy turnaround, whether for electromobility, solar or wind technology. A limited supply is already matching the enormous demand. A stalling of ambitious plans is already preprogrammed.
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ISIN: XPeng Inc ADR | US98422D1054 , CENTRAL AFRICAN GOLD INC. | CA1523761098 , VOLKSWAGEN AG VZO O.N. | DE0007664039
"[...] In our experience, the local communities are supportive and friendly. [...]" Steve Cope, President, CEO and Director, Silver Viper
XPeng - Strong despite adverse market
September was a month to forget for the Chinese car market. Compared with the same period last year, around 20% fewer cars were sold. Sales of vehicles with combustion engines suffered the most. The reason for the market's 5-month decline is the shortage of semiconductors. In contrast, suppliers of cars with alternative drives, i.e. electric cars, plug-in hybrids and fuel cell vehicles, doubled their sales to around 357,000 units.
In addition to top dog Tesla, which sold over 56,000 units, XPeng was above the 10,000 mark with 10,412 e-cars, alongside Volkswagen and NIO. For XPeng, this represented a 199% increase from September 2020, with sales increasing 44% from the previous month. Within 6 years, Xpeng managed to break the sound barrier of 100,000 vehicles produced; Tesla needed twice the time to do so.
In addition to new models, the Chinese Company plans to enter the market for flying cars through its subsidiary Xpeng Heitech by 2024 at the latest. The Voyager X2 model currently under development will seat two passengers. According to reports, one battery charge will last around 35 minutes, and the flight altitude will be 1,000m. Target groups include ambulance services as well as the police.
Central African Gold - Clean business
With the expansion of renewable energy and the transformation in the automotive market, the future should be clean. The combustion of conventional fuels such as coal, natural gas and oil releases carbon, reaching the earth's atmosphere as CO2. There it causes the dreaded greenhouse effect and ultimately the warming of the earth's climate. That should be stopped sooner rather than later. For this undertaking, however, industry and business need an incredible amount of industrial metals. In addition to copper, zinc and nickel, critical raw materials such as lithium, rare earths, and cobalt are already scarce.
An El Dorado for industrial metals is offered by the Democratic Republic of Congo, where more than 59% of the known global reserves are located. However, in the past, the country was considered politically unstable and was disreputable due to child labor and environmental protection. According to the management of the Canadian mining Company Central African Gold, the climate has changed. Projects completed in the future must be ethically sound, as well as environmentally and socially sustainable.
Central African Gold's local management team focuses on developing and operating prospective gold, copper, cobalt and nickel projects. Social aspects are to be integrated into each project. In total, the Canadians own six mineral concessions covering a total area of 176 sq km, including both forests and farmland, to encourage the generation of revenue from carbon credits.
Recently, an agreement to acquire 60% of the multi-million ounce Zani-Kodo gold project was announced. Zani-Kodo is located in the northeastern Democratic Republic of Congo, 120 km southeast of Barrick-AngloGold's Kibali mine, Africa's largest gold mine with reported 2019 production of 814,000 ounces of gold and a total published resource of 22 million ounces of gold. For Central African Gold's CEO, this acquisition is an important milestone: "It is the culmination of an entire group's efforts, using our extensive knowledge of the regional economy and our experience in the Republic of Congo, which is critical to success in such a complex environment."
The stock, which is also traded in Frankfurt, is currently trading at EUR 0.15. The stock market value is EUR 5.7 million.
Volkswagen - Sand in the gearbox
The chip shortage is having an impact, which is also likely to weigh on the results of Europe's largest carmaker, Volkswagen. The Wolfsburg-based company already reported that significantly fewer units were sold in the past quarter for the US business. The number of cars sold fell by 8% to 79,321 units.
For the major Swiss bank UBS, the weak third quarter was already predictable. However, the low point in production, characterized by a shortage of semiconductors, has probably already been reached, and, because of strong demand, it is time to place more massive bets on car stocks.
Wolfsburg remained on track towards its margin target despite the weak quarter, commented UBS analyst Patrick Hummel. The price target remained at EUR 300, and the investment rating was left at "buy".
The energy transition requires enormous quantities of industrial metals such as copper, nickel and cobalt. Central African Gold has focused on developing and operating gold, copper, cobalt and nickel projects in Congo. Despite the Chinese car market downturn, XPeng was able to shine with solid sales figures; at Volkswagen, the third quarter is likely to be dominated by the chip shortage.