The Pentagon just got a painful wake-up call.
Its stockpiles of crucial armaments are depleting at a record pace as the war in Ukraine drags on, and its poorly armed allies are even worse off.
Intelligence officers in Germany said that the country has only two days’ worth of ammunition in case of a military threat.
In March 2024, the European Union allocated 500,000,000 Euros under the Act in Support of Ammunition Production (ASAP) to boost output capacity to 2 million shells annually by the end of 2025.
But the Western militaries have a major problem.
This push for new military hardware requires a crucial critical metal called Antimony of which the U.S. produces exactly nothing.
And it gets worse…
This summer, China curbed exports of Antimony, sending prices soaring by 200% in the course of a few months.
But even in this precarious situation, there are a handful of companies from Australia and Canada that are racing to bring online a new stream of antimony supply.
One of them, a Canadian exploration company called Military Metals (CSE: MILI, OTCQB: MILIF), spotted this disturbing trend early and started scooping up antimony assets in North America and Europe, eyeing a quickly emerging opportunity to provide the Western world with the ability to defend itself against its enemies without Chinese metals.
Critical minerals won the war for the Allies in WWII, precisely because the Allied powers controlled most of the world’s minerals at that point in history, according to the Carnegie Endowment for International Peace.
Today, the tables have turned and China controls the lion’s share of the world’s most critical minerals, including antimony–a key component of national defense.
But Military Metals is fighting back, changing the trend with its newly acquired Antimony assets in Nevada and Nova Scotia, one of the few known sources of antimony in North America.
The company also recently announced that it has purchased one of Europe’s largest antimony deposits in Slovakia with a historical resource. In the heart of Central Europe, it’s a promising Soviet-era resource with an initial discovery from the 1950s and prior development in the ‘80s and ‘90s. It’s already seen two phases of exploration, including drilling and adit excavation.
The Slovakian Trojarova asset is one of the European Union’s largest Antimony deposits and with a historical resource of over 60,998 tons of Antimony has a in-situ value of $2 billion at today’s spot prices and could give Slovakia a chance to become a critical metals hub for Western defense industries.
Figure 1 Military Metals Corp. (CSE:MILI; OTC:MILIF):
Compared to its closet peer, Military Metals (CSE: MILI, OTCQB: MILIF) appears to be significantly undervalued. Fellow antimony miner Perpetua Resources has only a slightly larger antimony resource of 90,000 tons but has seen its value soar to around $700 million. Perpetua saw a huge rise from $3 a share to $14 a share in the last 6 months.
Meanwhile, Military Metals is valued at only $25 million right now; yet its historical resource of 60,998 tons has an in situ value of over $2 billion of antimony in the ground.
Across the Atlantic, in Canada, Military Metals is sitting on a recently acquired historical antimony/gold play that ended up being a major boom to the Allies in WWI, and reigns supreme as one of Canada’s biggest past producing Antimony mine in the early 1900’s. And on October 24th, 2024, the company pounced on another opportunity to further consolidate this territory by signing an LOI to acquire more claims flanking West Gore.
It’s an impressive historical resource, with historical drilling results demonstrating over 7 meters of 10.6 gpt gold and 3.4% antimony.
The move to consolidate territory surrounding West Gore—one of the biggest heroes of WWI—is a strategic move that could tie the junior miner directly to North American defense at a time when prices are skyrocketing.
Everyone’s on War Footing, and Antimony is the Driver
When China started tightening the noose first on critical battery metal graphite, then on rare earth elements Germanium and Gallium, and finally on Antimony, Military Metals Corp. banded together to make the metals that China refuses to sell their primary business.
This smart, fast-moving investment strategy could, according to Forbes, be the “latest to generate short-term profits of more than 100% on money invested”.
Military Metals CEO Scott Eldridge sees a major antimony supply crunch coming. And antimony prices this year, along with new Chinese restrictions add extra support to that prediction with prices doubling since earlier this year from $12,000 per ton to $38,000. That’s why it’s been acquiring past-producing antimony mines on two continents at breakneck speed.
They’re eyeing a confluence of events, one of which is a major U.S. and European Army push to boost production of ammunition that relies on antimony.
Artillery shells are the kings of battle, and the king of kings is the 155-millimeter artillery shell. Now, the U.S. Army has set in motion a major push to ramp up production, gearing up for the opening of a new manufacturing facility in Mesquite, Texas. A second facility in Canada has been contracted to produce shells for the U.S. Overall, the U.S. Army is hoping to ramp up production from the current ~40,000 artillery shells per month, to 100,000 by the New Year.
That means they will need to secure a lot more antimony supply, at the same time that China is putting the squeeze on the critical mineral.
Other miners to watch in December are:
SQM (NYSE: SQM) is a Chilean chemical company and a leading global producer of lithium, a critical component in batteries used in a wide range of applications, including electric vehicles, consumer electronics, and increasingly, military technology. Lithium-ion batteries are essential for modern military operations, powering everything from advanced communication systems to unmanned vehicles and drones. SQM’s production capacity and access to vast lithium reserves in the Atacama Desert make it a strategically important player in the global lithium supply chain.
A reliable and stable supply of lithium is crucial for nations like the United States, which rely heavily on advanced technology for their defense capabilities. Sourcing lithium from SQM allows countries to reduce their dependence on potentially unstable or adversarial nations for this critical material. This mitigates supply chain vulnerabilities and ensures that defense industries have the necessary resources to produce the equipment and weapons systems required for national security.
SQM’s commitment to sustainable lithium extraction practices aligns with the growing global emphasis on responsible sourcing of critical minerals. As nations strive to reduce their environmental impact and promote ethical supply chains, SQM’s efforts to minimize its footprint in the Atacama Desert are increasingly important. This commitment ensures that the production of lithium for defense applications is conducted in an environmentally and socially responsible manner.
Centrus Energy Corp. (NYSE:LEU)
Centrus Energy Corp. is a key player in the nuclear fuel cycle, specializing in the production of low-enriched uranium (LEU). While LEU is primarily used to fuel nuclear power plants, it also has vital defense applications. Uranium is the essential fuel for the nuclear reactors that power US Navy aircraft carriers and submarines, which are critical for projecting US military power globally and providing a significant strategic advantage. Nuclear propulsion allows for extended operational ranges and reduces logistical challenges associated with refueling, making these vessels ideal for long-duration deployments.
Centrus plays a vital role in ensuring a secure and reliable supply of LEU for both defense and civilian nuclear applications in the Western world. By providing a domestic source of enriched uranium, Centrus reduces reliance on foreign suppliers, which can be subject to geopolitical instability or potential export restrictions. This self-sufficiency strengthens the resilience of the US nuclear fuel supply chain and ensures the US Navy has the fuel it needs to maintain its nuclear fleet, which is crucial for national security objectives.
Centrus is a leader in developing advanced centrifuge technology for uranium enrichment. This technology offers significant advantages in terms of efficiency and proliferation resistance compared to older enrichment methods. Centrus’s expertise in this area is crucial for ensuring the long-term sustainability and security of the US nuclear fuel supply. The company’s commitment to technological advancement and its dedication to meeting the needs of the US government make it a vital partner in maintaining a robust and secure nuclear deterrent.
Barrick Gold Corporation (NYSE:GOLD)
Barrick Gold Corporation is well-known for its dominance in gold production, but it is also a significant player in the copper mining industry. This is a crucial aspect of their operations, as copper is essential for a wide range of defense applications. It is used extensively in electrical wiring for military vehicles and equipment, in the manufacturing of ammunition, and in the production of advanced electronics for communication, guidance, and sensor systems. Copper’s high conductivity and durability make it indispensable for these purposes.
Barrick’s copper mining operations contribute to a diversified and reliable supply of this critical metal, which is essential for maintaining the technological edge of the US military. As a Western-based company, Barrick’s operations are subject to stricter environmental and labor regulations than those in many other copper-producing regions. This promotes responsible sourcing and minimizes the geopolitical risks associated with relying on copper from less stable regions, where production might be disrupted by conflict, political instability, or human rights concerns.
Barrick’s commitment to sustainable mining practices enhances its value as a supplier to the defense industry. The company has implemented initiatives to reduce its environmental impact, including reducing water consumption, minimizing greenhouse gas emissions, and promoting biodiversity. This focus on sustainability aligns with the growing emphasis on environmental responsibility within the defense sector and ensures that Barrick’s copper is sourced ethically and with consideration for long-term environmental impacts.
Newmont Corporation (NYSE:NEM)
Newmont Corporation is a leading global gold producer with a significant and strategically important presence in the copper mining sector. Copper is essential for a wide range of defense applications, from the wiring in military vehicles and aircraft to the advanced electronics used in communication and weapons guidance systems. Its high conductivity and resistance to corrosion make copper indispensable in these critical applications.
Newmont’s copper production contributes to a stable and reliable supply of this critical metal for the US defense industry. Sourcing copper domestically from Newmont reduces reliance on potentially unstable or adversarial nations, ensuring a more secure and ethical supply chain. Newmont adheres to high environmental and social responsibility standards, minimizing environmental impact and respecting the rights of workers and communities. This commitment to responsible sourcing aligns with the growing emphasis on sustainability within the defense sector.
Newmont’s global presence and diversified operations provide resilience against potential supply chain disruptions. With mines located in various regions, the risk of production being significantly impacted by geopolitical instability or natural disasters in a single location is reduced. This geographical diversification strengthens the overall security of the copper supply for the US defense industry. Newmont’s commitment to operational excellence and continuous improvement ensures that it can consistently deliver high-quality copper to meet the demanding requirements of defense applications.
Arch Resources, Inc. (NYSE:ARCH)
Arch Resources is a major producer of metallurgical coal, a crucial component in the steelmaking process. While the world transitions towards cleaner energy sources, metallurgical coal remains essential for producing high-quality steel used in various defense applications. This includes everything from armored vehicles and naval vessels to critical infrastructure and the machinery used to manufacture weapons systems.
Arch Resources plays a crucial role in ensuring a stable supply of metallurgical coal for the US steel industry, which in turn supports the production of critical defense equipment. The company operates mines in regions with access to abundant coal reserves, ensuring a reliable supply of this essential raw material. This domestic production reduces reliance on foreign coal sources and strengthens the resilience of the US steel industry, which is vital for national security.
Arch Resources acknowledges the environmental challenges associated with coal mining and is committed to responsible mining practices that minimize its impact. This includes investing in technologies to reduce emissions, reclaim mined land, and protect water resources. Arch Resources also prioritizes the safety and well-being of its workforce and the communities where it operates. As the world transitions to cleaner energy sources, Arch Resources is actively exploring opportunities to diversify its business and contribute to a more sustainable energy future.
Alcoa Corporation (NYSE:AA)
Alcoa Corporation is a global leader in the production of bauxite, alumina, and aluminum. The company is involved in all major aspects of the aluminum production process, from mining raw materials to smelting and refining the final product. This vertically integrated structure gives Alcoa significant control over its supply chain, ensuring a reliable and consistent output of high-quality aluminum. Aluminum is a lightweight and durable metal with numerous applications in the defense industry, including aircraft construction, armor plating for military vehicles, and manufacturing lightweight components for weapons systems. Its high strength-to-weight ratio makes it ideal for applications where weight reduction is crucial, such as in aerospace and military vehicles.
Alcoa’s extensive operations and commitment to innovation ensure a reliable supply of this vital metal for critical defense applications. The company’s research and development efforts focus on developing new aluminum alloys with improved properties, such as increased strength, corrosion resistance, and formability. These advancements contribute to the development of more robust and efficient defense systems. For example, Alcoa’s aluminum alloys are used in the construction of advanced military aircraft, like the F-35 Joint Strike Fighter, where lightweighting is essential for maximizing performance and fuel efficiency. Alcoa’s aluminum plates are also used in constructing armored vehicles, providing crucial protection for military personnel.
Alcoa is committed to reducing its environmental footprint through initiatives such as increasing the use of recycled aluminum and investing in renewable energy sources. This commitment to sustainability aligns with the growing emphasis on environmental responsibility within the defense sector. By reducing greenhouse gas emissions and promoting responsible resource management, Alcoa contributes to a more sustainable and resilient defense industrial base.
Arcadium Lithium plc (NYSE:ALTM)
Arcadium Lithium plc is emerging as a lithium industry titan, born from the powerful merger of Allkem and Livent. This strategic union brings together two leaders with complementary strengths, creating a company with a diverse portfolio of lithium assets and a truly global reach. Arcadium Lithium is poised to become a driving force in the lithium market, playing a key role in supplying this critical mineral for electric vehicles, renewable energy storage, and a host of other applications.
What sets Arcadium Lithium apart is its potential to significantly enhance the security and resilience of the lithium supply chain for the Western world. By combining the resources and expertise of Allkem and Livent, Arcadium Lithium can leverage its diversified operations to mitigate geopolitical risks and ensure a more stable and reliable supply of lithium for Western industries. This is especially critical as demand for lithium is projected to skyrocket in the coming years, fueled by the rapid growth of the electric vehicle market and the increasing adoption of renewable energy technologies.
Arcadium Lithium is deeply committed to sustainable and responsible lithium production, aligning with the growing global focus on environmental stewardship and ethical sourcing. By prioritizing sustainable practices throughout its operations, Arcadium Lithium is building a more responsible and environmentally friendly lithium supply chain. This commitment is essential for the long-term viability of the electric vehicle and renewable energy sectors, and it positions Arcadium Lithium as a leader in responsible resource management.
By. Michael Scott
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
Forward-Looking Statements
This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. The forward-looking statements in this publication are based on current expectations and assumptions about future events, geopolitical developments, trade policies, market conditions, the company’s strategic initiatives to address the critical shortage of antimony, and current expectations, estimates, and projections about the industry and markets in which the company operates. Factors that could change or prevent these statements from coming to fruition include, but are not limited to, the potential impact of the upcoming U.S. elections on various industries and specific companies, changes in government policies, market conditions, regulatory developments, geopolitical events and the company’s ability to successfully acquire and develop new antimony resources and fluctuations in antimony prices. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
DISCLAIMERS
This communication is for entertainment purposes only. Never invest purely based on our communication. We have not been compensated by the companies mentioned in this article. While the opinions expressed in this article are based on information believed to be accurate and reliable, such information in our communications and on our website has not been independently verified and is not guaranteed to be correct. The content of this article is based solely on our opinions which are based on very limited analysis, and we are not professional analysts or advisors.
SHARE OWNERSHIP. The owner of Oilprice.com owns shares of the companies featured in this article and therefore has an incentive to see the featured companies’ stock perform well. The owner of Oilprice.com will not notify the market when it decides to buy more or sell shares of the featured companies in the market. The owner of Oilprice.com will be buying and selling shares of the featured companies for its own profit and may take this opportunity to liquidate a portion of its position. Accordingly, our views and opinions in this article are subject to bias, and why we stress that you should conduct your own extensive due diligence regarding the featured companies as well as seek the advice of your professional financial advisor or a registered broker-dealer before you consider investing in any securities of the featured companies or otherwise.
NOT AN INVESTMENT ADVISOR. Oilprice.com is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. You should not treat any opinion expressed herein as an inducement to make a particular investment or to follow a particular strategy, but only as an expression of opinion. The opinions expressed herein do not consider the suitability of any investment with your particular objectives or risk tolerance. Investments or strategies mentioned in this article and on our website may not be suitable for you and are not intended as recommendations.
ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making any investment. This communication should not be used as a basis for making any investment in any securities. Past performance is not indicative of future results.
RISK OF INVESTING. Investing is inherently risky. Do not trade with money you cannot afford to lose. There is a real risk of loss (including total loss of investment) in following any strategy or investment discussed in this article or on our website. This is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote in any jurisdiction. No representation is being made as to the future price of securities mentioned herein, or that any stock acquisition will or is likely to achieve profits.
Source link
