Companies are strengthening their grip on vital raw materials for the green transition
PALM BEACH, Florida., June 15, 2022 /PRNewswire/ — FinancialNewsMedia.com News commentary – Commodity trading is fundamentally driven by supply and demand. In the past, commodities such as copper, steel, cobalt, and lithium were considered cyclical, fluctuating in popularity. But the green revolution is changing that. We discuss here with reference to Intel (NASDAQ: INTC), General Engines (NYSE: GM), Valley (NYSE:VALE), and Defense Metals Corp. (TSXV: DEFN) (OTCQB: DFMTF) (FSE: 35D).
Traditionally subject to cyclical price trends, structural shortages are now forcing commodity prices to remain high. This leads many companies to think about how best to prepare for the future.
Intel (NASDAQ:INTC) is building at least two of its own semiconductor fabs in United States. Tesla CEO, Elon Muskhas suggests to Tesla mining its own lithium. And traditional automakers like General Engines (NYSE: GM) directly secure their raw material supplies, without resorting to third-party intermediaries.
This illustrates the level of fear and uncertainty in the market, prompting companies to take drastic measures to secure their vital supplies.
Rare earths are an underestimated product in this field. These are elements that are often found with other precious metals and are also of crucial importance for the technical revolution.
In 2020, COVID-19 led the rare earth industry to experience a supply chain shock. However, the rare earth industry has seen a rapid increase in demand as demand wanes. According to Fortune Business Insight, the market is expected to grow from $2.8 billion in 2021 for $5.5 billion in 2028 at a CAGR of 10%.
Indeed, rare earths still represent an undiscovered commodity trade because many people remain blind to their importance.
There is an additional risk to the security of rare earth supplies, as the majority of rare earths are mined and processed in China. This poses a national security problem for Western nations and a supply problem for businesses.
It’s something Defense Metals Corp. (TSXV:DEFN)(OTCQB:DFMTF)(FSE:35D) hopes to change. Defense Metals is an advanced rare earth mineral exploration and development company with western promise. Its Wicheeda deposit in Canada has the potential to become a globally significant producer as demand for these crucial commodities grows.
ESSENTIAL TO DISRUPTIVE INNOVATION
Rare earth elements are used in the electric power market, in the defense industry and in the production of green energy technologies. These include rare earth magnets used in wind turbines and permanent magnet motors for electric vehicles.
Current production of neodymium (Nd) and praseodymium (Pr) rare earths will need to increase by 100% over the next 10 years to account for electric vehicle (EV) production estimates based on government EV adoption targets .
But those are just the EV numbers. With all the other innovations in which rare earths are used, global production must grow much stronger and faster if it hopes to keep pace.
Strategically positioned along a major forest service road, the Wicheeda property has excellent infrastructure, including a major hydroelectric line, a major gas pipeline, as well as a Canadian National Railway and major highways nearby.
Here, at its Wicheeda Rare Earth Element (REE) deposit, Defense Metals has begun diamond drilling.
The 2022 Wicheeda REE diamond drilling campaign is expected to include up to 1,500 meters of in-pit geotechnical and hydrogeological drilling, 1,500 meters of additional resource delineation and near-resource exploration drilling, and up to 2,000 meters of 8.5 cm diameter PQ core for further metallurgical testing. A unique benefit of the Wicheeda REE project is the production of marketable high quality flotation concentrate.
Defense Metals has a dream management team in the field of rare earth space sports experts with significant experience in metals and mining both professionally and academically. It also has strategic advisers with ties to Tesla, the CIA and the defense industry.
SIGNIFICANT PRODUCTION POTENTIAL
Demand for rare earths is increasing, suggesting that Defense Metals’ rare earth cache will be increasingly sought after in the years to come.
As demand skyrockets, the price is likely to stay high and climb much higher. Considering that the current Preliminary Economic Assessment (PEA) of Defense Metals bases its future profitability on the prices of Nd and Pr of $100/kg, there is serious upside potential for patient investors getting in early.
Additionally, the company is well funded to reduce risk and advance its Wicheeda property. In just two months after acquiring 100% ownership of Wicheeda and publishing its PEA, the company has privately raised a huge $4.5 million to further reduce risk and move the project forward.
Ultimately, Defense Metals is an undervalued stock with unprecedented growth potential. He has macro tailwinds at his back and an outstanding team leading him on this lucrative journey.
The Wicheeda field offers tremendous opportunities for significant production expansion and is close to all necessary and desired infrastructure.
In addition, in terms of ESG, Defense Metals wants to ensure that it aligns its objectives favorably. Defense Metals shares trade competitively against their peers with strong advantages in grades, mineral concentrate and near-term production potential.
You’re here recently reached an agreement with Valley (NYSE:VALE) for low carbon nickel. This agreement reflects a shared commitment to sustainable development. Vale’s goal is to supply 30-40% of Class 1 nickel sales to the growing electric vehicle industry. Meanwhile, Tesla revealed that nearly half of its vehicles in the first quarter were equipped with lithium iron phosphate (LFP) batteries.
Intel (NASDAQ: INTC) has selected a Ohioin Montreal to manage the initial excavation work for its two new state-of-the-art chip plants in Ohio. The fabs, known in the industry as fabs, will help boost chip production to meet growing demand for advanced semiconductors, fueling a new generation of innovative products from Intel and meeting the needs of customers of foundry as part of the company’s IDM 2.0 strategy.
General Engines (NYSE: GM) invests alongside industry leaders and start-ups and sources whenever possible from North America and strong business partners like Australia. This includes rare earths, permanent magnets, cathode active material and lithium, as well as the announced cobalt deal with Glencore.
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