SBSW

Sibanye Stillwater Limited - ADR

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-$2.34 -18.68%
Boron's not boring - far from it
The green energy transition and EVs are doing to boron what they did to lithium a decade ago. According to Credit Suisse Equity Research, the market will double by the end of the decade, mostly driven by decarbonization applications.

I'm probably not alone in having explored a few career paths throughout my life. I've worked in advertising, airlines, energy, and education. After years of introspection, I realized what key attributes & qualities would make a career fulfilling for me.

According to Indeed, among the "14 Qualities of a Fulfilling Job" are the following traits:

Interesting assignments

Professionals who find their work genuinely interesting experience greater fulfillment because it dependably satisfies their curiosity. Individuals might have vastly different interests, but they can all experience the same satisfaction that comes from expanding their understanding of subjects that matter to them.

  • As I state in my Twitter bio, every day is a learning experience even for the experienced. The more you learn the more you earn; from podcasts to 'spaces' we are so fortunate to have a wealth of information at our fingertips.

Consistent engagement

When a job consistently requires your devoted attention, you're more likely to consider it fulfilling. By avoiding boredom and disinterest, you're more likely to feel justified in remaining committed to your role. Engagement also energizes your efforts to continue learning.

  • Investing requires consistent engagement--from monitoring macro to an individual company's performance, no two days are ever the same.

Benefit to other people

Professionals who enjoy helping others usually seek fulfillment with work that improves people's lives. When motivated by loyalty and service to others, people often experience their obligations as meaningful, rather than stressful or inconvenient. Regardless of how they benefit other people, fulfilling jobs make it easy for you to see how your efforts affect your community.

  • Sharing knowledge on Commonstock & Twitter benefits the entire community. I always feel grateful for the information I've gained from others who so generously share expertise and I can only hope that some of my posts here return the favour.

Values matching yours

Fulfilling jobs allow you to apply your core values to your work. If you have aspirations for your community, industry or the world, a fulfilling job empowers you to make changes that contribute to your mission.

  • As an Albertan who is proud of Canada's natural resource sector and its world-class regulatory framework, I value the opportunity to be a part of the #COM community as we're "dedicated to educating the world on energy security and the generational opportunity in the Canadian oil patch".


So how does all of this relate to "boron isn't boring"? I'm assuming you've read this far because you're like me--you find new investment opportunities interesting and of course you're hoping to profit from some new knowledge you've gained. And also like me, I'm guessing you're familiar with that green box of Borax you've seen on the shelves in the laundry detergent section:

Rio’s $RIO historic mine is in Boron, California, home of the famous 20 Mule Team. The currently producing mine dates back to 1927 and Rio expects it to reach end of life in 2042


You'll probably be surprised to learn that boron shares many of the family traits of rare earths and is also a close relative of lithium. Lithium & boron have similar properties such as melting points, boiling points, and lengths of atomic chains. They both react with water to form hydrogen gas, which makes them useful for hydrogen fuel cells.

Boron is less reactive than lithium, making it a safer chemical to use when creating batteries for anything from cell phones to cars, because of its low reactivity with other compounds or chemicals. It also has higher potential energy than lithium which it gives off in ionized form, making it more efficient at storing power over a smaller area.

Boron and Borates are an essential part of the following Industrial applications

  • ADHESIVES, CAULKS, AND SEALANTS
  • AGRICULTURE: promotes root growth in plants, enhances the ability of plants to use water and resist stress, improves their disease resistance and quality
  • BATTERIES AND CAPACITORS: when it is introduced into a battery, it not only improves its storage capacity but also makes your battery last longer, promising you hours-long backup power.
  • CERAMICS, ENAMELS, AND GLAZES
  • CLEANERS AND DETERGENTS
  • FIRE RETARDANCY
  • GLASS AND TEXTILE FIBERGLASS
  • INDUSTRIAL FLUIDS AND LUBRICANT
  • INSULATION
  • METALS AND GOLD: it helps produce borides, which are metallic solids made up of boron atoms bonded together by precision alloys like aluminium or titanium
  • NUCLEAR ENERGY: helps solidify radioactive material into our country’s nuclear reactors with only 1 per cent of all the natural boron on Earth being used for this purpose
  • OIL AND GAS PRODUCTION: Boron is used in the water-wash process of oil and gas production to hydrate clay, hydrocarbon, and solvent.
  • PHARMACEUTICAL USE: supplements are useful for those with calcium and vitamin D deficiencies and provide relief from the pain of osteoporosis.
  • POLYMERS: enhances recrystallization, delaying or inhibiting crystallographic phase transitions. This latter property has important implications for use as additives to polymers where it can be used to control shrinkage on cross locking polymer systems
  • WOOD PROTECTION AND BIOCIDES: provides wood protection and biocides to help with mold prevention while enhancing cell growth and promoting rapid plant growth.


You can already find 40-50 kilograms of boron materials in the average EV, including in permanent magnets, high-strength steel chassis, ceramic brakes, dashboard screens, body panels and thermal and acoustic insulation. The renewable energy sector uses boron in permanent magnets and fibreglass for wind turbine blades and borosilicate glass for solar panels.

Turkey’s state-owned Eti Maden and Rio Tinto control roughly 85% of the global 4.5 million tonnes per annum supply. Eti Maden, which traces its history back to a 1935 decree by Atatürk alone accounts for nearly two-thirds of global output from just four mines.

CEO of 5E Henri Tausch says boric acid prices have nearly doubled in the past year to around $1,200 a tonne, although the industry remains opaque and price discovery is mainly via the company’s network of industry insiders.

Tausch says while there are maybe 100 active projects around the world developing lithium mines, for boron the number is only six, most in early stages and smaller in scale.
Frontrunner Ioneer $IONR and Sibanye-Stillwater’s $SBSW lithium and boron Rhyolite Ridge project in Nevada is in the definitive feasibility stage with capacity for 174,000 tonnes of boron.

A report from Baird Equity Research sees 5E $FEAM in 2027 as a $672 million per year company at boric acid prices of $1,200 and lithium carbonate at $15,000 affording the company EBITDA margins north of 60%. This model does not take into account any downstream boron products E5 may produce and at the assumed prices for lithium and boron, could be considered conservative.

Baird has a price target of $36 per share, representing upside of 114%. Baird cautions investors that the duopolistic and opaque nature of the boron market make supply and demand dynamics and price trends difficult to monitor, creating evaluation risk.

(Of the names listed above, I currently own $SBSW - please DYODD and I am always happy to answer any questions that I can.)

Who would have thought that green box in the laundry aisle could do so much more than remove grease stains? Every day is fascinating, isn't it?
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Key Updates On Previous Posts
I do have "ask me if I sold" in my bio, but just in case that goes unnoticed I wanted to provide some updates. I haven't been able to link a live portfolio here yet due to issues with my Canadian brokerage. I'm sure some would be disappointed in a few of my returns, given the poor performance of commodity-based equities the past few months, but for the most part I am holding and believe sector rotation has only recently begun.

  • Patriot Battery Metals continues to be my strongest performer (currently up 1188%).
  • Other solid returns include $BRW.V (>100%), $NGEX.V (70%), $FL.V (45%), $STEP.TO (47%). I am pleased that my theses regarding lithium, copper, and energy are proving to be reasonably correct so far.
  • On the downside, however, my hydrogen pick $NXH.V remains a "dog" which I am down 48% on. I still believe in the companies potential & will continue to hold, as exciting developments continue in the growing sector.
  • I have sold my diamond stock, North Arrow ($NAR.V). Diamonds may be a girl's best friend but not so much the equities. I actually still believe in the potential here but felt there were better opportunities to be had elsewhere (namely in the fertilizer sector, so I have reallocated).
  • Gold & silver equities continue to perform poorly, but given the unpredictable events globally, they still constitute approximately 10% of my portfolio.

I continue to hold a basket of junior exploration companies related to copper, nickel, lithium, vanadium, and manganese. If you have any questions about previous posts, please never hesitate to ask for an update.

Perhaps the most important update I wished to provide is related to $SBSW
I first discussed the company on June 9, in a post called "Sibanye Stillwater: A Risky But Potentially Rewarding Play". The company has had a tough year as they faced flooding in Montana, a strike in South Africa, and a pending lawsuit with Appian Capital. SeekingAlpha's Pearl Gray Equity & Research wrote about these risks in an article this morning:

I will add the same caveat that they did:

**_This piece isn't based on price discovery or sentiment. Therefore, I strongly encourage you to use this information as part of your holistic analysis instead of considering it in isolation.
_**

as well as this quote:

It needs to be considered that the company still pays a magnificent dividend and that it has a lot of latitude in the mining space with its 5-year EBITDA CAGR of 47.52%, conveying its cost advantages.

In my view, many of the aforementioned risks remain and must be strongly considered as well as monitored on a regular basis. I believe platinum & palladium could see a significant increase in demand if hydrogen fuel cell vehicles become mainstream. The article below is worth a read if that is of interest to you.

Several countries do have plans to expand the infrastructure of hydrogen refueling stations. If fuel cell self-driving car technology takes the lead in the marketplace, Palladium and Platinum will likely continue to grow in demand and have value both as currencies and as industrial commodities.


Palladium is expected to remain volatile with an improved outlook in Q4.


As always, please DYODD and I'm happy to answer any questions that I can!
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