Is Clean TeQ Holdings Limited the next clean energy star?

Clean TeQ Holdings Limited (ASX:CLQ) can supply materials to the lithium battery sector and wants to do that as soon as possible.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares in Clean TeQ Holdings Limited (ASX: CLQ) climbed 1.75% higher to $1.16 on Wednesday, following the release of the company's activities report for the March quarter.

Clean TeQ owns the yet to be developed Sunrise multi-metal project – a large high-grade deposit of nickel and cobalt in New South Wales – and a proprietary technology to efficiently transform these metals for the lithium battery sector.

The company is co-chaired by mining tycoon Robert Friedland and Zhaobai Jiang, chairman and founder of Chinese conglomerate Shanghai Pengxin.

What was in the update?

In order to accelerate the project's development and commence production one year earlier than previously expected, Clean TeQ just raised $150 million at $1.15 a share through a heavily oversubscribed institutional placement. Funds will finance engineering and construction work and the identification of higher-grade cobalt areas.

The placement saw American mutual fund Fidelity Investments acquire a 6% stake in the company, becoming the third main shareholder after Robert Friedland and Shanghai Pengxin, each with an interest of nearly 14%.

The Sunrise project is also one of the world's largest deposits of scandium, and during the quarter Clean TeQ formed a partnership with Chinese aluminium giant Chinalco and Chongqing University to develop and commercialise scandium-aluminium alloys: new lightweight materials for a more energy-efficient transport industry.

The NSW government granted Clean TeQ the mining lease for Sunrise in February, but a few steps are still to be taken before commencing production. The company is still in the process of completing a definitive feasibility study, which was extended to June 2018 in order to evaluate a proposal from a major engineering contractor for the construction of the Sunrise processing plant. The board is expected to make its final investment decision by the end of the year, after which Clean TeQ will commence construction.

Foolish takeaway

As the single owner of the Sunrise project, Clean TeQ seems very well placed to ride a boom in demand for materials in the lithium battery and transport markets. Today's update signals that the company is seeking to accelerate preparatory work in order to supply these materials as soon as possible.

Despite the many steps yet to be completed before the company actually starts mining and generates positive operating cash flows, I think Clean TeQ is an interesting option for betting on a clean energy revolution of transport.

Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »