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Construction of SRC Rare Earth Processing Facility in Canada Underway

Construction of the first stage of the Saskatchewan Research Council’s (SRC) Rare Earth Processing Facility, which includes a Monazite Processing Unit…

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This article was originally published by Green Car Congress

Construction of the first stage of the Saskatchewan Research Council’s (SRC) Rare Earth Processing Facility, which includes a Monazite Processing Unit (MPU) and a Solvent Extraction Unit (SXU), is underway The facility will be the first of its kind in Canada.

In August 2020, the Government of Saskatchewan announced $31 million in funding for the facility.

The conversion of REE ore to individual REE products is done in two main stages. The first is the concentration of ore to mixed REE Carbonate. The second is the more complex separation stage that converts the mixed REE Carbonate to commercial pure-grade REEs. The facility will address both stages of REE processing.

A private sector landlord is handling the construction of the building in Saskatoon, Saskatchewan, Canada, which will be leased to SRC. SRC is continuing to make progress with the facility’s design and the procurement of the highly specialized plant equipment.

The MPU is expected to be operational ahead of schedule, in early 2023. The fully-integrated Facility is expected to be operational by mid-2024.

In July 2021, SRC procured up to 800 tonnes of monazite concentrate from Indústrias Nucleares do Brasil (INB), S.A., in Brazil from their mine and processing facility. The monazite concentrate will arrive at SRC in the spring of 2022 and will be used as a feedstock for the MPU, once operational.

SRC continues to source additional preconcentrated monazite globally prior to the MPU commissioning. SRC’s Facility will require 3,000 tonnes per year of monazite concentrate on a 90 per cent basis (equivalent to 60% Total Rare Earth Oxide). However, SRC would like to secure a stockpile of feed in advance of commissioning.

SRC is Canada’s second largest research and technology organization.

 

Energy & Critical Metals

Benchmark: lithium’s price rally accelerates

Lithium price rises accelerated in the first half of September as surging demand and raw material supply concerns combined to push Chinese domestic prices…

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Lithium price rises accelerated in the first half of September as surging demand and raw material supply concerns combined to push Chinese domestic prices up to their highest levels since mid-2018 according to data from Benchmark’s Lithium Price Assessment.


Lithium hydroxide and carbonate price rises accelerated to new levels in the first half of September. Source: Benchmark


Technical and battery-grade lithium carbonate prices increased by more than 20% in the first two weeks of September and are now up 188.9% and 215% respectively in the Chinese domestic market this year.

Carbonate price increases are once again outpacing lithium hydroxide, last seen in Q1 2021, and could soon race ahead, Benchmark said. China EXW lithium hydroxide prices rose 14.2% in the first half of September, up 162.7% year-to-date.

Throughout August and early September, the price rally for lithium chemicals and feedstock has been re-ignited on incredibly strong downstream demand, especially within the Chinese domestic market, which acts as a bellwether for the rest of the world’s lithium market.

—Benchmark analyst George Miller
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Energy & Critical Metals

This Will Help the Market Right Itself

Despite recent weakness, expect buybacks to help support the market … look for a break to new highs later this fall … a preview of the amazing technologies…

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Despite recent weakness, expect buybacks to help support the market … look for a break to new highs later this fall … a preview of the amazing technologies headed our way this decade

Coming into September, it seemed just about everyone was expecting a market pullback.

And whether it was a self-fulfilling prophecy, market dynamics, or just seasonal weakness, this month has, in fact, seen losses.

As I write Friday at lunch, the S&P and Nasdaq are down 1.7% and 1.3%, respectively, on the month. The Dow leads the losses, off 2.1% so far in September.

If your portfolio is in worse shape, that’s because pockets of the market have been underperforming the broader indexes for weeks now.

From CNBC:

About 15% of S&P 500 stocks are more than 20% below 52-week highs, but much larger swaths of the midcap and small-cap universe are down 20% or more. The latter groups are less tech-focused and more susceptible to an economic slowdown:

Slow motion deterioration
(percentage of stocks that are 20% or more below their 52-week highs)

  • S&P 500 15%
  • S&P Midcap 30%
  • S&P Small Cap 48%

Below are a handful of widely-owned stocks, as well as the percentage by which they’re now trading below their 52-week high.

American Airlines 26%… FedEx 20%… Nordstrom 41%… Pulte 26%… Eli Lilly 14%… Dupont 20%.

***What are we to make of this? Are we slowly slipping into a stealth correction?

Let’s go straight to our technical experts, John Jagerson and Wade Hansen of Strategic Trader:

After breaking to new all-time highs and briefly riding above up-trending resistance a few weeks ago, the S&P 500 started pulling back last week on some post-Labor Day profit-taking.

While this pullback has gotten the permabears out there all hot and bothered, this pullback is just that… a pullback.

It’s not the beginning of the end.

There’s just too much demand for U.S. equities to allow the S&P 500 to break below the up-trending support level that has been interacting with the index since May.

Daily Chart of the S&P 500 (SPX)

***One factor that will keep the bull market going

In John and Wade’s Wednesday update, they pointed toward a reason why stocks have support, despite the current volatility – share buybacks.

For any readers less familiar, when a company has extra cash, it can use it to buy back its own shares, in effect “retiring” or canceling those shares.

Assuming the company is still generating the same amount of profit, fewer shares will boost a company’s earnings per share (EPS). This is a benefit to shareholders.

Here’s John and Wade illustrating how this works:

For example, if a company earns $100 and there are 100 shares outstanding, the EPS is $1 ($100 / 100 shares = $1 per share).

Similarly, if a company earns $100 and buys back 50 shares so there are now only 50 shares outstanding, the EPS is $2 ($100 / 50 shares = $2 per share). The company didn’t increase its earnings at all, but by buying back its shares, it doubled its EPS.

Today, we’re seeing companies resume their share buyback programs following a COVID-19-related slowdown.

John and Wade provided the chart below, illustrating the ramp-up in buybacks here in 2021.

Chart showing how corporate stock buybacks are ramping back up post 2020Source: Standard & Poor's

Quarterly S&P 500 Buybacks (source Yardeni Research)

Back to the Strategic Trader update:

This increase in share buybacks among S&P 500 companies is good news. Buybacks had slipped during the pandemic, but they are making a strong comeback in 2021.

We expect more companies to announce increased buyback programs as we head into Q4. This should keep demand for S&P 500 stocks strong in the near-term.

So, returning to our question at the top of today’s Digest, what are we to make of the recent pullback in the market?

Here’s John and Wade’s bottom-line:

We’ve been here before.

The S&P 500 climbs to new all-time highs and traders take profits. This pushes the index lower, which attracts more buyers.

We expect this pattern to continue for the foreseeable future.

***Let’s end today with a fun look at the amazing technologies that will be in your portfolio tomorrow

Bank of America Global Research just released a 152-page research report that highlights 14 “radical technologies that could change our lives and accelerate the impact of global megatrends.”

According to the report, these technologies have a market size of $330 billion today. But by next decade, they could explode to $6.4 trillion.

As we’ve noted here in the Digest, the 2020s will be the most transformative decade in human history. That’s because technology is leading to exponential progress, not traditional linear progress.

The BofA report echoes this point:

The pace at which themes are transforming businesses is blistering, but the adoption of many technologies – like smartphones or renewable energy – have surpassed experts’ forecasts by decades, because we often think linearly but progress occurs exponentially.

Here are the 14 “radical technologies.” We’ll dig into a handful below.

  • 6G
  • Brain Computer Interface
  • Emotional Artificial Intelligence
  • Synthetic Biology
  • Immortality
  • Bionic humans
  • eVTOL
  • Wireless Electricity
  • Holograms
  • Metaverse
  • Nextgen Batteries
  • Ocean Tech
  • Green Mining
  • Carbon Capture & Storage
Graphic showing 14 amazing technologies coming this decadeSource: B of A Global Research

Here’s more detail on a handful of these moonshot technologies.

From the BofA report:

Brain Computer Interfaces: “As we reach a point where humans are unable to keep up with computers and AI, brain computer interfaces could help ‘level up’ humans with computers. Shorter term, brain computer interfaces hold solutions for paralyzed individuals and promise a new wave of innovation in gaming.”

Immortality: “Traditionally, aging has not been viewed as a disease that can be treated but this is changing. Actors in this space are increasingly looking to tackle the hallmark of aging via pathways such as ‘genomic instability, telomere attrition, mitochondrial dysfunction, and cellular senescence’ among others.”

eVTOL: “Electrical vertical take-off and landing vehicles that could provide an alternative mobility transportation solution to outdated infrastructure and overly stressed roads in urban settings.”

Holograms: “A technology capable of creating a simulated environment through light imagery projections that will allow everyone to come together in one virtual room, without having to leave their physical location.”

Metaverse: A “future iteration of the Internet, made up of persistent, shared, 3D-shared spaces linked into a virtual universe. It could comprise countless persistent virtual worlds that interoperate with one another, as well as the physical world and transforming markets such as gaming, retail, entertainment etc.”

It’s hard to look at this list and not be excited about what’s coming this decade – from both a societal and portfolio perspective.

We’ll keep you up to speed with the development of these trends here in the Digest.

Have a good evening,

Jeff Remsburg

The post This Will Help the Market Right Itself appeared first on InvestorPlace.

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Energy & Critical Metals

The Latest Slide in Nio Stock Is a Great Buy Opportunity

Nio (NYSE:NIO) stock is in a slump. It’s not anywhere near the extent of punishment it suffered in 2019 when NIO stock plummeted 85% in 8 months. However,…

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Nio (NYSE:NIO) stock is in a slump. It’s not anywhere near the extent of punishment it suffered in 2019 when NIO stock plummeted 85% in 8 months. However, NIO is down 29% from the end of June when it was trading just over the $53 mark. And it’s down about 30% since the start of the year. This wasn’t supposed to be the trajectory of 2021. Certainly not after Nio began firing on all cylinders and the stock posted a gain of 1,110% in 2020.

Source: Sundry Photography / Shutterstock.com

As NIO was starting its slide in July, I wrote that the dip (20% at the time of publication) was an opportunity. I still believe that is the case.

The global chip shortage has turned out to be a bigger and longer-lasting issue than expected. That’s continuing to hurt all car-makers, not just Nio. There are other factors at play — including a huge stock offering — but Nio is a leading electric vehicle (EV) maker in the world’s largest markets for electric cars.

The slump in NIO stock has lasted two and a half months, but it won’t last forever. Here’s why.

The Good News for NIO Stock

First, let’s take a look at the good news for Nio moving forward. Nio in 2020 and 2021 bears little resemblance to the Nio of 2019. Back then, the company was lurching from disaster to disaster. It almost felt like a lost cause.

Today, could not be more different. Nio’s EVs are demand. Its assembly lines are humming, and every month this year the story has been the same: massive year-over-year growth in vehicle deliveries. In July, it was 7,931 vehicles for 124.5% year-over-year growth.

The company’s BaaS (Battery as a Service) has proved to be a canny move. Leasing the battery separately from the rest of the car lowers purchase costs for consumers. It makes an EV more practical in Chinese urban areas where charging stations can be difficult to find. Battery swapping also made Nio EVs eligible for Chinese government subsidies.

Nio may be facing increasing competition in China, but the company is not going to be relegated to its home market. Nio has global expansion plans, and its foothold starts with EV-friendly Norway.

All of these factors were big parts of the NIO stock growth story that began in 2020 and peaked with a $62.84 close on Feb. 9. 

Key Challenges: Chip Shortages and the Stock Offering

However, the case for NIO stock isn’t without challenge. In the first half of 2021, Nio seemed relatively unscathed by the global chip shortage. Other automakers have been idling production lines for weeks at a time while they wait for chips. Nio saw a slight hit in May, but still managed to goose production and deliveries to new levels. In June and July, it seemed unaffected. At that time, reports began to emerge that perhaps the worst of the semiconductor shortage was behind us.

That, as it turns out, was wishful thinking. Instead, it’s looking like automakers could face chip shortages into 2023.

Now, the issue is biting Nio in a meaningful way. August EV deliveries were still up 48.3% YoY, but the 5,880 vehicles delivered in August fell well below July’s numbers. The company warned of supply chain constraints, while lowering delivery projections for the third quarter. 

On Sept. 7, NIO stock was jolted when the company announced it was offering $2 billion in shares. That was a big move. Naturally, it resulted in NIO stock slipping further. 

Bottom Line on NIO Stock

When I wrote about Nio in July, I noted that the investment analysts polled by CNN Money rated NIO as a “Buy” with a $59.60 median price target (with about 40% upside). 

Now that July’s dip has turned into a lengthy slump, are those analysts losing faith? Hardly. NIO stock remains a consensus “Buy.” The current median 12-month price target has risen to $61.18, for 63% upside. NIO stock also retains its B-rating in Portfolio Grader.

The bottom line is that if you’re looking for an EV stock that offers strong long-term growth potential, China’s Nio should still be on your short list.   

On the date of publication, Louis Navellier had a long position in NIO. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Louis Navellier, who has been called “one of the most important money managers of our time,” has broken the silence in this shocking “tell all” video… exposing one of the most shocking events in our country’s history… and the one move every American needs to make today.

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