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Five battery materials stocks we like: AFC Energy, Nano One, Euro Manganese, European Metals Holdings and Bushveld Minerals



Nano One, a manufacturer of high-performance cathode powders for use in lithium-ion batteries, is working on a low cost, cobalt-free lithium nickel manganese cathode active material. It has launched a metal to cathode active material (M2CAM) initiative to use pure base metals for the cathode powders, rather than metal sulphates or other salts. We like that Nano One is collaborating with Volkswagen and one other, as yet unnamed, ‘major global EV leader’ on the possible use of its cathode materials, signalling Nano One’s ambition and its potential for growth, if commercial deals are signed. We also like its ESG-friendly policy of working with miners and equipment makers to reduce waste, carbon emissions, logistics and costs.

Bushveld Minerals LON:BMN

Against a backdrop of rising prices for vanadium, as new demand meets tight supply, Bushveld Minerals looks well placed for what we consider to be an upcoming revolution in the production of large-scale vanadium batteries. It has both a mine and a processing plant in South Africa, and has acquired industrial group Vanchem to help it to diversify into the batteries sector. Bushveld shares had a poor 2020, caused by necessary refinancing, reinvestment and inevitably by the pandemic, but we expect it to benefit from the considerable growth in the vanadium battery market this year and beyond, as it moves from pure mining to a more diversified industrial processing and production entity.

Euro Manganese [TSXV/ASX:EMN]

This battery materials company, with big plans to re-process manganese from mine tailings in the Czech Republic, has signed a deal with EIT InnoEnergy, an EU-backed body that oversees the EU-European Battery Alliance. The deal secures the company’s place in the EU’s plan to build a European electric vehicle and battery supply chain. Euro Manganese’s proposed development is the only sizeable manganese resource in the region, representing a unique and strategically valuable resource to the EU. The company holds two further attractions: first, it is reprocessing existing mining waste and tackling a longstanding water pollution problem and, second, it is located at the heart of Europe, close to Europe’s car and battery manufacturers, who will all be part of the EU’s electric mobility future.

AFC Energy (LON:AFC)

Shares in AFC Energy, which develops alkaline fuel cells, have picked up dramatically since the deal it signed with Swiss electrical systems maker ABB, lending some much-needed heft to a technology that has so far failed to deliver on its promise. Investors will have noted too the key appointment of the former head of engineering and industrialisation at Dyson, Dr Michael Rendall, who is a specialist in the conversion of ammonia into electricity, an area AFC Energy has been targeting. The company’s public profile is also set to be raised by its involvement in Extreme E races, an off-road racing series for electric cars, that will enable the firm to showcase the performance of its generators under extreme conditions.

European Metals Holdings (LON:EMH)

Three events have helped to transform prospects for European Metals Holdings Ltd, a junior miner developing its Cinovec lithium mining project in the Czech Republic, pushing its shares up some 500% over the year. In March last year, European Metals signed up the Czech state-owned power utility CEZ as a long-term partner. Then, European Metals signed a key contract with the European Institute for Innovation and Technology, a European Union entity and a key player in the EU’s plans to build a strong domestic battery industry. Finally, came the hire in September last year of German engineering firm SMS as lead engineer for the project.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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