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When looking for an investment your method should involve a thematic
approach, studying global long term dominant trends. Then study the different
sectors in order to select the one that is going to match up well with what
you think is the soon to be overriding theme. This is top down investing.
The second part of your search for the dominant investment is a bottom up
approach. This is where you find individual companies in the specific sector
you have chosen to invest in.
 So what is that investable theme I mentioned earlier?
Today we are at the start of a major, at least decade long transition in
how energy is produced and stored. A global energy transition, from the
burning of fossil fuels for energy and transportation, to using renewable
non-polluting solar and wind energy is underway.
Specifically, what are the energy metals that are going to make the much
needed increased adoption of renewable energy possible?
Manganese
The United States Geological Survey (USGS) says the U.S. is 100% dependent
on other countries for Manganese. Manganese, so crucial for steel making is a
basic building block any nation needs for its economic foundation.
Aside from iron manganese is the most essential mineral in the production
of steel. You can’t produce steel without adding 10 to 20 lbs. of
Electrolytic Manganese Metal (EMM) per ton of iron. The US government has
classified manganese as a strategic metal for
over a hundred years. This is not hard to understand when manganese has no
substitute in its many steel applications and has itself become a substitute
for other more expensive metals in certain alloys.
There are no mines producing manganese ore in the U.S. or Canada. There
are no domestic suppliers of EMM in North America - China controls 97% of the
world trade in electrolytic manganese metal (EMM) and you can’t make steel
without it.
The same circuits that make EMM make electrolytic manganese dioxide (EMD).
EMD is a key ingredient in the production of lithium-ion, lithiated-ion,
alkaline and zinc/manganese batteries. The U.S. is the largest consumer of
EMD worldwide.
It seems North America needs a long term 'domestic' supply chain of
manganese – from mine to battery. It’s becoming apparent that North America’s
supply of EMM, and more advanced products such as EMD, should no longer be
based on the goodwill of China.
Vanadium
Every sunny afternoon there’s a remarkable amount of the sun’s energy, in
the form of solar power, fed into the electricity grid. The problem is that
all this new electricity from the sun is coming through the grid at the wrong
time of day. Between noon and 4pm is a trough in power demand. It’s during
peak hours of demand in the evening when all this excess energy can be
utilized.
Wind power encounters the same intermittency problems as solar power -
sometimes the wind blows, sometimes it doesn’t, sometimes the sun shines
sometimes it doesn’t.
Renewable Energy’s Problem Solved
An emerging market opportunity is rapidly developing for vanadium
pentoxide (V2O5) to be used as the main ingredient, the electrolyte, in
the vanadium redox flow battery (VRFB) aka the Vanadium Flow Battery (VFB) or
V flow battery.
Vanadium Flow Battery’s can store large amounts of energy almost
indefinitely, which makes them perfect for wind/solar farms, industrial and
utility scale applications, to supply remote areas, or to provide backup
power.
How VFB’s work
Batteries store energy and generate electricity by a reaction between two
different materials, usually zinc and manganese.
In VFB batteries, these materials are liquid and have different electric
charges. Both liquids (V2+/V3+ and VO2+/VO2+) are pumped into a tank. A thin
membrane separates the two liquids but the liquids are able to react and an
electric current is generated.
Vanadium is used because it can convert back and forth from its various
different states which carry different positive charges. The risk of cross
contamination is eliminated as only one material is used. They are also
safer, as the two liquids don’t mix causing a sudden release of energy.
The liquids have an indefinite life, so the replacement costs are low and
there are no waste disposal problems. Also, battery life is extended
potentially infinitely. By using larger electrolyte storage tanks VFB’s can
offer almost unlimited energy capacity and they can be left completely
discharged for long periods with no ill effects.
Introducing hydrochloric acid into the electrolyte solution almost doubles
the storage capacity and enables the system to work over a far greater range
of temperatures, from -40°C to +50°C.
V-flow batteries offer the best deployable large battery storage
technology developed so far.
Vanadium has also begun to play a role in applications for electric
and hybrid vehicles. Vanadium acts as a supercharger to batteries by increasing
the energy density and voltage of the battery. This is important for electric
and hybrid vehicle performance since energy density equates to
distance/range, while voltage equates to torque.
Feldspar
Feldspars are found in granite type pegmatite rocks which are a mixture of
feldspar minerals together with quartz and mica.
Tempered Glass
K-spar and Na-spar are increasingly being used in the fabrication of tempered
glass and solar panels.
Tempered glass, or as it’s more commonly known safety glass, is used in
place of other glass products where increased strength and safety is
required. Tempered glass is up to six times the strength of normal plate
glass. Because the glass is so strong it can effectively resist wind pressure
and impact.
Safety glass also has a unique fracture pattern. Called ‘dicing’ it
shatters into small pieces rather than creating long and razor sharp shards.
Fully tempered glass is used in applications like doors, side lights,
shower and tub enclosures, interior partitions, storm doors, patio-door
assemblies, and escalator and stairway balustrades. As a glazing product it
is used in windows and in spandrel areas (for wind pressure, impact and
thermal stress resistance). Special building applications include sloped
glazing, racquetball courts, skylights and solar panels.
The domestic motor vehicle industry employs tempered glass as side and
rear windows in automobiles, trucks, and multi-purpose vehicles.
Manufacturing industries use tempered glass in refrigerators, furniture,
ovens, shelving, and fireplace screens.
“The Global Tempered Glass Market is poised to grow at a CAGR of
around 7.7% over the next decade to reach approximately US$71.5 billion by
2025.” Tempered Glass Market Analysis By Application
(Automotive, Construction,) And Segment Forecasts To 2022
Solar Glass
The solar industry’s current demand for glass is less than 3% of the
overall market. However, with the huge growth in the solar industry this
situation is changing.
According to Greentech Media for the first time ever, U.S. solar ranked as
the number one source of new electric generating capacity, growth of
nonresidential installations surpassed residential solar for the first time
since 2011 and the U.S. solar market nearly doubled its annual record,
topping out at 14,625 megawatts of solar PV installed in 2016.
Oxford University researchers say solar’s share of global electricity will
grow from roughly 1.5% today, to as much as 20% by 2027.
For the first time, more solar systems came online in 2016 than natural
gas power plants - the top source of electricity in the US in 2015 - as
measured in megawatts. Solar capacity is irrefutably going up, and prices are
collapsing.
Solar windows
Rooftops are the obvious place for a solar panel because they receive more
direct sunlight than a building’s façade. But because of their sheer square
footage certain building façades can be tapped as sources of solar-power
generation.
Experts say that, depending on the number of south-facing windows and the
building's location, solar panel tempered glasstechnology could provide from
20% to 30% of a buildings energy needs.
Tempered Solar Glass Tiles
Tesla’s CEO Elon Musk has recently made the claim Solarcity’s new solar
roof tiles will be cheaper than a conventional roof even without adding in
the cost of electricity saved. The tiles have embedded solar photovoltaic
cells between multi-layered tempered glass.
Imery’s Performance Metals closed its U.S. feldspar production site in
December 2013. The company had previously been supplying 50% of U.S.
production. Imery’s lost production, the highest quality K-spar, is being
made up by imports of Spanish feldspar.
There is one U.S. feldspar supplier left, and their focus is on pottery,
not solar. There is no high quality K-spar or Na-spar production in the U.S.
or Canada (except for a privately owned mine in S.W. Quebec, it’s product is
used for crowns and implants), for solar glass or solar roof tile
applications.
Conclusion
There is a global energy transition - from the burning of fossil fuels for
energy and transportation, to using renewable non-polluting solar and wind
clean energy underway.
It’s your authors opinion that manganese (no North American production),
vanadium (no North American production), and the feldspars (no North American
production), are going to be as hugely important to the adoption of clean
renewable energy (solar, wind and geothermal), and the energy storage market
(which includes EV’s/power tools), if not more so going forward, then
lithium, graphite and cobalt presently are to the adoption of just
electric vehicles/power tools.
When a metal’s, indeed any commodities supply side is constrained, in
combination with strong demand, that commodity is in a situation that almost
guarantees upward pressure on its price. Add in geo-political concerns about
the commodities major producers and a share price rise for the junior
resource company, who can potentially supply said commodity is, in this
author’s opinion already baked in.
For us as retail investors the trick is to find that potential future
producer. To do that I’ve found the best way is taking a thematic approach, a
top down bottom up methodology. My due diligence is done and I’ve got three
junior resource company’s on my radar screen who own deposits of manganese,
vanadium and K-spar. In North America.
What’s on your radar screen?
Richard’s articles have been published on over 400 websites, including:
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Indiatimes, Ninemsn, Ibtimes, Businessweek, HongKongHerald, Moneytalks,
SeekingAlpha, BusinessInsider, Investing.com, MSN.com and the Association of
Mining Analysts.
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Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or
the solicitation of an offer to purchase or subscribe for any investment.
Richard Mills has based this document on information obtained from sources
he believes to be reliable but which has not been independently verified.
Richard Mills makes no guarantee, representation or warranty and accepts
no responsibility or liability as to its accuracy or completeness.
Expressions of opinion are those of Richard Mills only and are subject to
change without notice. Richard Mills assumes no warranty, liability or
guarantee for the current relevance, correctness or completeness of any
information provided within this Report and will not be held liable for the
consequence of reliance upon any opinion or statement contained herein or any
omission.
Furthermore, I, Richard Mills, assume no liability for any direct or
indirect loss or damage or, in particular, for lost profit, which you may
incur as a result of the use and existence of the information provided within
this Report.
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