Companies across several critical elements sectors have been watching recent trade tensions between China and the West closely. Those seeking tellurium for use in solar technology, like First Tellurium Corp. (FTEL:CSE; FSTTF:OTCQB), are no exception.
China recently announced it would restrict the export of gallium and germanium, both essential for semiconductor production.
But Beijing has warned it may also ban exporting solar panel technology, and the country produces about 60% of the world's tellurium, First Tellurium noted.
First Solar, which competes directly with Chinese solar panel producers, buys more tellurium than any other user in the world, said asset manager Chen Lin, author of the What's Chen Buying? What's Chen Selling? newsletter.
If China restricted tellurium imports like it did gallium and germanium, it "would strike at the heart of the U.S. solar panel industry and greatly benefit Chinese producers," Chen said.
First Tellurium's Klondike project in Colorado is considered America's top tellurium exploration project and was previously owned by First Solar as a potential source of raw tellurium for its solar panels, Docherty said.
First Solar, which competes directly with Chinese solar panel producers, buys more tellurium than any other user in the world, said asset manager Chen Lin, author of the What's Chen Buying? What's Chen Selling? newsletter.
First Tellurium President and Chief Executive Officer Tyrone Docherty told Chen in a recent interview published on Streetwise Reports that the tellurium results at Klondike "are on another planet" compared to the company's Deer Horn project in British Columbia, which features high-grade tellurium, gold, and silver.
"We've got the best of both worlds: great precious metals and this wonderful mineral tellurium," Docherty said. "We're sitting very, very good compared to anyone else."
The Catalyst: Breaking Away from Dependence on China
Tellurium is one of the least common elements on the planet, according to the U.S. Geological Survey. Most rocks contain an average of about three parts per billion, making it eight times less abundant than gold.
Its use as a semiconductor in solar photovoltaic (solar PV) panels has increased. It's also used in thermoelectric applications, lithium batteries, vulcanizing rubber, tinting glass, and manufacturing rewritable CDs and DVDs.
Tellurium is one of the least common elements on the planet, according to the U.S. Geological Survey. Most rocks contain an average of about three parts per billion, making it eight times less abundant than gold.
Both the U.S. and Canada are trying to reduce dependence on China for such critical metals. U.S. President Joe Biden has banned solar panels coming from a Chinese company that uses forced labor.
"This is precisely why the U.S. Department of Energy (DOE) launched its Cadmium Telluride Accelerator Consortium (CTAC) a year ago," Docherty said. "They know the U.S. is vulnerable and has to establish safe and reliable sources of tellurium."
The US$20 million initiative is designed to make cadmium tellurium (CdTe) solar cells cheaper and more efficient and to develop new solar markets. These cells, first developed in the U.S., are the second most common solar technology in the world after silicon, First Tellurium noted.
CdTe is cheaper to produce than silicon panels and is 22.1% efficient in converting sunlight to electricity, the company said.
Next-Generation Batteries
That's just the start: Demand is growing for the element in thermoelectric devices, and some next-generation batteries may use a combination of lithium and tellurium. Batteries are driving the switch to the new green economy, and cheap and efficient energy storage is fueling the surge.
Technical analyst Clive Maund rated First Tellurium as an immediate Buy in March.
First Tellurium partner Fenix Advanced Materials is working on such a battery with the University of British Columbia.
"All-solid-state, lithium-tellurium batteries enable higher energy output with an improved safety rating inside a smaller form factor, thereby expanding its possible applications," said Dr. Jian Liu, Principal's Research Chair in Energy Storage Technologies at UBC's School of Engineering.
"The high purity of tellurium, along with the mineral's overall attributes, makes it ideal as a rechargeable battery material."
Market Demand Is Growing
The market for tellurium is expected to grow by about 60 metric tons from 2020 to 2024, according to research by Technavio.
"Factors such as increasing urban population, rise in disposable income, strong supply chain, and high internet penetration are driving the growth of the global consumer electronics market," the research firm said in a release. "The increase in demand for consumer electronics will, in turn, drive the demand for tellurium over the forecast period."
First Solar stopped its raw materials exploration program at Klondike in 2012 and sold the property to Colorado Klondike LLC, which optioned Klondike to First Tellurium.
"Surface sampling by First Solar Inc. in 2006 found very high tellurium grades of up to 3.3% (33,000 ppm), along with locally high gold grades," the Colorado Geological Survey and the Colorado School of Mines reported on First Solar's Klondike exploration. "Tellurium grades at Klondike were the highest encountered in the company's nationwide exploration program."
Streetwise Ownership Overview*First Tellurium has been a quarterly pick of Chen's several times in the past year. He recently wrote that the company could "have a huge 2023."
"We will hit the jackpot as FTEL is the only pure play in tellurium," Chen wrote.
Technical analyst Clive Maund rated First Tellurium as an immediate Buy in March.
Ownership and Share Structure
According to the company, 11% of First Tellurium is owned by management and insiders.
Docherty owns 10.6% or 7.7 million shares, Director Josef Anthony Steve Fogarassy has 1.38% or 1 million shares, and Director Lyle Allen Schwabe has 0.73% or 0.53 million shares. The rest is retail.
The company has a market cap of CA$8.36 million, with about 73 million shares outstanding and 63.4 million free-floating. It trades in a 52-week range of CA$0.25 and CA$0.085.
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Important Disclosures:
- First Tellurium Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of First Tellurium Corp.
- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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