RE:Stockhouse Newschizzles wrote: I just noticed that Almonty is on the front page under Top Stories on Stockhouse!!
Is China really preparing for an attack on Taiwan?
It is well known that China is massively increasing its gold reserves. But why tungsten, too? After all, China itself is the largest producer of this raw material, which is not only in demand in the arms industry.
However, as noted recently by the CEO of Almonty (TSX:AII) at an investor conference, the Chinese are buying large quantities of tungsten. We can only speculate about the reasons behind this.
What is clear is that the Western world needs to secure its tungsten supply.
Almonty Industries is already producing in Europe and plans to commission a huge tungsten mine in South Korea later this year.
Revenue and profits should then rise sharply and lead to a revaluation of the stock. Rheinmetall (OTCPK:RNMBF) has undergone a revaluation in the past two years. Can it reach EUR 600?
Varta (PINL:VARTY), on the other hand, is on the brink. Analysts do not see any upside, even at the current price level.
Almonty Industries: Why is China buying on the global market?
“The price of tungsten is currently at a high level. There are several reasons for this. One that I cannot explain is China. The fact is that there are currently huge imports into China, including from Australia and Europe. This has dramatically changed their approach,” Lewis Black, CEO of Almonty Industries, said last week at the IIF virtual investor conference.
The fact that China is buying on the global market is so surprising because the country, together with Russia, dominates global production. According to Black, one reason could be that tungsten is increasingly used in the semiconductor industry. Due to growing tensions with the U.S., China has announced that it will massively expand its domestic chip industry.
In addition, tungsten is also used in the defence and solar industries, among others, and is vital in the production of batteries for electric vehicles. These are all areas where China is one of many players.
How does Almonty benefit from these developments? Firstly, the company already has established tungsten mines in Spain and Portugal. They also ensured that the company achieved a positive EBITDA of EUR 2.2 million in 2023 – despite significant investments. The driver for the share is in South Korea, where the Sangdong mine is due to be ramped up this year. With the opening of the new mine in South Korea, Almonty is set to become one of the major players, which should lead to a revaluation of the share. Incidentally, the project is being co-financed by the German KfW to the tune of EUR 70 million, emphasizing the global significance of tungsten. According to Almonty’s CEO, talks are also being held with European governments, and representatives from the U.S. Department of Commerce have already inspected Almonty’s activities on the Iberian Peninsula.