China’s recent restrictions on the export of critical minerals, coupled with the U.S. proposed tariffs on mineral imports from China have ignited a global search for secure and sustainable alternative suppliers. Masan High-Tech Materials (HNX-UpCOM: MSR), a leading advanced materials manufacturer in Vietnam, is well-positioned to seize this opportunity, due to its robust tungsten production capabilities, a global network of strategic partners, and a strong commitment to sustainability and green production.
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With the global materials industry shifting its sourcing away from China, Masan High-Tech Materials, a mining subsidiary of Masan Group, stands out with its strong production capacity and dedication to sustainable practices. By adhering to Environmental, Social, and Governance (ESG) principles, embracing innovation and implementing green transition initiatives, Masan High-Tech Materials is poised to become a leading supplier of advanced materials critical to key industries globally.
Tungsten and copper revenue growth in 2024
QIII 2024 saw a remarkable increase in Masan High-Tech Materials’ revenue, up by VND 74 billion compared to the previous quarter, driven by robust growth in tungsten and copper sales. This reflects the rising global demand for critical minerals.
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Over the first nine months of 2024, tungsten revenue grew by 2%, thanks to higher selling prices in Q2 and Q3, indicating increased demand from third-party customers. Copper revenue reached VND 670 billion during the same period, primarily due to higher sales to domestic customers. As of September 30, the market value of copper inventory at MHT stood at nearly USD 92 million, positioning the company for continued growth in the final quarter of the fiscal year.
Strategic Partnerships for Production Stability and Business Growth
In May 2024, MHT finalized an agreement with Mitsubishi Materials Corporation (Japan) to acquire 100% of H.C. Starck for USD 134.5 million. This acquisition, expected to be completed in Q4 2024, marks a significant milestone in MHT’s strategy to strengthen its global mining capabilities and expand its footprint.
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In July, MHT signed a Memorandum of Understanding with Fluorine Korea and Traxys North America LLC to supply acid-grade fluorspar to Fluorine Korea’s AHF plant. This agreement ensures a stable supply of up to 70,000 tons of acid-grade fluorspar annually to the AHF plant, scheduled to commence operations in 2026. Traxys North America LLC, as the exclusive distributor, will manage global distribution, supporting MHT’s commitment to providing a sustainable and reliable supply chain.
Efficiency enhanced through the “Fit for Future” Program
In response to market fluctuations and challenging economic conditions, MHT launched the “Fit for Future” program in early 2024 to optimize costs and enhance operational efficiency. As part of this program, MHT has reviewed and signed contracts with new mining and blasting contractors, aiming for a 10% cost reduction compared to previous agreements. These new contractors commenced services in August 2024. MHT’s Q4 production is expected to increase significantly, meeting the surging demand for materials and solidifying the company’s position in the global critical minerals market.
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Sustainable solutions to meet market demands
The growing demand for materials to power global green industries, coupled with China’s tightening control over the export of critical minerals and the U.S.’s proposed tariffs, has underscored the urgent need for secure and sustainable sources of critical minerals. Masan High-Tech Materials is well-positioned to meet this demand.
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MHT differentiates itself in the global materials market through its forward-looking sustainable development strategy centered on a circular economy model. By focusing on recycling, green product development, and green growth, the company has reinforced its commitment to sustainability, innovation, and ESG principles. These efforts, alongside its focus on green transition initiatives, position Masan High-Tech Materials for greater business success in the coming years.
Currently, China controls approximately two-thirds of the global production of many critical materials such as aluminum, lithium, cobalt, and rare earth elements, solidifying its dominant position in the global supply chain of strategic minerals. Since 2023, China has tightened its control over the export of these critical minerals, raising global concerns about its dominance in the global supply chain. In an effort to minimize reliance on mineral imports from China, the US is considering imposing a 25% tariff on imports of numerous important minerals, including indium, tantalum, chromium, cobalt, and tungsten. This proposal from the U.S. Trade Representative’s office reflects concerns about China’s dominance over the global supply chain and the associated implications for national security and clean energy goals. Amid this shifting landscape, Masan High-Tech Materials emerges as a promising alternative supplier, leveraging its strong production capacity, sustainable practices, and commitment to innovation to support global green industries and enhance supply chain resilience. |
