Can Umicore play a leading role in the recycling of batteries?
Financial analyst Berenberg sees an important role for Belgian Umicore in the battery industry, not only producing materials for their production but also recycling them afterwards.
In a new report Berenberg is very positive about Umicore’s future. Analyst Sebastian Bray sees three reasons why Berenberg has changed its stock advice on Umicore from ‘hold’ to ‘buy’, despite of the already high share value. First of all Umicore is constantly doing well on the so-called cyclical chemical shares.
Secondly, practically all financial analysts have a buying advice for Umicore, and thirdly there is a new potential gold mine for the company: the recycling of used batteries.
One third of the market
According to Bray, we can expect a serious investment from Umicore in a hydro-metallurgic factory around 2020. He speaks of a 280 million investment. With a factory like this, Umicore could ensure itself one third of the battery recycling market of electric cars in 2025.
Bray calculated that Umicore can extract 80 euro of benefit from the recycling of a battery of 65 kWh, only taking into account the expensive materials involved (nickel, manganese, cobalt). Prognoses say that in 2025 already 2 million batteries will be waiting to be recycled, so this recycling should add some 30 million euro to the benefit of Umicore.
That may not seem a huge amount, compared to the size of the company, but if the market of electric cars explodes as is expected to be, and Umicore can grow with it, the revenues could be five times higher in 2030. So the German market analyst sees a bright future for the Belgian company.