5 ASX Water Treatment Stocks to Watch

Canaccord highlights five ASX-listed companies providing innovative water treatment solutions to help address the water scarcity issue.

Fresh water is essential for life, but it is a scarce resource, with less than 1 percent of the world’s water supply estimated to be fresh water readily available for humans.

Increased demand from a rising global population, climate change and associated water pollution are likely to see already scarce freshwater resources become even more stretched in the near future.

For Canaccord Genuity, these water quality trends are likely to continue, and will underpin large addressable global markets for water treatment solutions, which are key to help offset clean water scarcity by treating and ultimately reusing more water.

“Treated wastewater is increasingly seen as a reliable alternative to conventional water resources,” analysts at the firm told their investor audience in a note. “There are now many processes that can treat wastewater to almost any standard, whether it be to produce drinking-water quality, or to a standard necessary for re-use in industry, or to a level required for safe disposal.”

In the report, the firm highlights five micro-cap ASX-listed water treatment stocks to watch that are providing innovative solutions to help address the water scarcity issue.

Here, the Investing News Network takes a look at what these five companies are all about. All data was current as of June 18, 2020, and companies are listed in alphabetical order.

1. Calix (ASX:CXL)

Current stock price: AU$0.76; market cap: AU$112 million

Calix’s core technology is being used to develop more environmentally friendly solutions for advanced batteries, crop protection, aquaculture, wastewater and carbon reduction. The company has operations in Australia, New Zealand, the US, Europe and Asia, and currently generates sales from commercialised products for water treatment and sewer protection.

According to Calix, its technology provides benefits such as a safe and cost-effective way to manage odour and remove contaminants in wastewater, greater yields in aquaculture and agriculture, improved batteries at lower costs and an enhanced ability to meet emissions targets.

“Subject to exchange rates, Calix expects total sales revenue for FY20 to be within the range of AU$12.5 million to AU$14 million , representing a 3.8 to 4.2 times uplift from FY19,” the Canaccord analysts said. “The watchpoint on sales is the SE Asian region, where the impact of COVID-19 is yet to be determined.”

2. De.Mem (ASX:DEM)

Current stock price: AU$0.16; market cap: AU$26.3 million

An Australian-Singaporean decentralised water and wastewater treatment business, De.Mem designs, builds, owns and operates turnkey water and wastewater treatment systems for its clients.

Operating in the industrial segment, it provides systems and solutions to municipal and residential customers from the mining, oil and gas, electronics, chemicals and food and beverage industries.

“With about 60 percent of revenues currently sourced from Queensland, the company is initially focused on expanding its presence throughout the Australian market,” the report notes. “The company believes the size of the addressable market for its offering in Australia is around $200 to $300 million.”

3. Fluence (ASX:FLC)

Current stock price: AU$0.26; market cap: AU$156.21 million

Fluence is focused on the decentralised water, wastewater and reuse treatment markets. It offers low-cost, fast-to-deploy water and wastewater treatment products that solve local water shortages.

The market for decentralised systems utilising pre-engineered water and wastewater treatment/reuse products is estimated to be worth $13 billion, according to Global Water Intelligence, with demand for smart packaged water plants growing globally.

“Fluence is targeting geographies that urgently need wastewater treatment solutions and/or are urgently addressing extreme water shortages,” the Canaccord analysts said.

Fluence has established operations in North America, South America, the Middle East, Europe and China, and has experience operating in over 70 countries.

4. Phoslock Environmental Technologies (ASX:PET)

Current stock price: AU$0.36; market cap: AU$215.63 million

Phoslock Environmental Technologies is an international environmental company specialising in engineering solutions and water treatment products to remediate polluted lakes, rivers, canals and drinking water reservoirs.

Its leading product, called Phoslock, was developed by the Commonwealth Scientific and Industrial Research Organisation to significantly reduce excess phosphate safely from the environment and in turn reduce the growth of harmful algae. Phoslock is certified to be used in drinking water in North America, Europe, the UK, Brazil, Australia and China.

The company has a purpose-built production facility in Changxing, China, with a capacity of 20,000 tonnes per year and expansion plans in the works.

“The addressable market for PET is significant,” Canaccord’s report reads. “In China, the government has allocated over US$1 trillion in the latest five-year plan to address water, air and soil pollution.”

5. SciDev (ASX:SDV)

Current stock price: AU$0.58; market cap: AU$89.45 million

SciDev is focused on the separation of solids from liquids in a variety of industries, including mining, water treatment, oil and gas and construction.

“SDV has stated that it has a strong growth pipeline and believes it is well positioned to deliver sustainable growth,” Canaccord said. “SDV also could expand into adjacent industries that have a need for solids-liquid separation, including dairy, food & beverage, paint, waste management and cosmetics.”

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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General Manager Matt Herbert described Ontario as an “undiscovered gem,” and spoke about the company’s work on its lithium projects in the province.


After making its ASX debut this past November, Green Technology Metals (ASX:GT1) has been hard at work in Ontario, Canada, where it holds three projects covering 35,000 hectares.

Speaking to the Investing News Network at the Prospectors & Developers Association of Canada (PDAC) convention, General Manager Matt Herbert described the province as an “undiscovered gem” with the potential to contribute to the lithium supply chain in an environmentally conscious manner.

“I think the opportunity there is to create some very, very green lithium,” he said.


“At the moment, a lot of lithium is mined in Western Australia, (then) shipped to China for processing; from China it goes to European battery markets. I think by the time that lithium arrives where it’s supposed to arrive it’s left itself a bit of a carbon footprint,” Herbert explained during the conversation. “We have a real opportunity here to leverage low-carbon lithium in a place that is really screaming for security.”

Green Technology Metals has already seen support from members of the Ontario government, including recently re-elected Premier Doug Ford, and Greg Rickford, who is the province’s minister of northern development, mines, natural resources and forestry, as well as its minister of indigenous affairs.

“Both are massive supporters of critical minerals,” said Herbert. “Those things are important when you’re at the permitting and approval stage, and that’s exactly where we’re at. We’re able to leverage those relationships really well, and there’s just no better place to be at the moment.”

Watch the interview above for more from Herbert on Green Technology Metals and its plans for the next six months. You can also click here for our recap of PDAC, and here for our full PDAC playlist on YouTube.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Green Technology Metals is a client of the Investing News Network. This article is not paid-for content.

The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

Housing the world’s largest deposits of lithium, Chile’s unique geological landscape and climate make it ideal for lithium brine extraction

As the world continues on the path towards a future dominated by clean energy, lithium’s importance only continues to grow. Demand for the battery metal has already reached an all-time high, increasing by 400 percent in 2021. What’s more, there is every indication that this growth will continue in 2022, with prices increasing by 126 percent in just the first quarter.

Currently, Australia and Chile are the two leading producers of lithium, respectively accounting for 46.3 percent and 23.9 percent of worldwide production. Both countries are jurisdictionally inclined to support the mining sector. However, Chile’s potential could one day see it outstrip even Australia where investment is concerned.

Housing the world’s largest deposits of lithium, Chile’s unique geological landscape and climate makes it ideal for lithium brine extraction. The country thus has a pivotal role to play in meeting demand and establishing a stable global supply chain.


A critical component of sustainability

Climate change is an undeniable problem, one which requires a collaborative effort to address. It is for this reason that governments around the world have all agreed to pursue full climate neutrality by 2050. Because combustion engines represent an inordinate percentage of greenhouse gas emissions, replacing them with electric vehicles (EV) is essential if any nation is to achieve their sustainability goals.

Lithium is used extensively in both consumer and professional electronics. It is also a staple metal in multiple other sectors, including mining, manufacturing and energy storage.

Given its cross-sector industrial importance, the battery metal was already in high demand.

The large-scale manufacturing of electric vehicles has caused this demand to increase exponentially. As multiple automotive manufacturers construct gigafactories to ramp up EV distribution, the need for lithium is growing well beyond our current production capacity.

Investors and mining companies can benefit by turning to jurisdictions like Chile to ramp up supply. The world’s migration towards a sustainable future simply cannot occur without lithium.

Lithium: Australia versus Chile

Although Australia houses impressive lithium reserves, the majority of the country’s stores occur in hard rock deposits. Mining these deposits is relatively inexpensive, but hard rock lithium operations also tend to have narrow margins compared to other methods. In particular, lithium brine extraction offers higher yields, greater efficiency and a lower overall environmental impact.

Currently, the largest lithium producer in Australia is Pilbara Minerals (ASX:PLS,OTC Pink:PILBF). Its flagship project, the Pilgangoora operation, is situated atop one of the world’s largest hard rock lithium deposits. It also jointly owns a pegmatite lithium project with Atlas Iron (ASX:AGO), the Mt Francisco project.

Geography represents Chile’s first major advantage over other jurisdictions. Alongside Bolivia and Argentina, Chile lays claim to a geographic region known as the Lithium Triangle. Located in the Andes in South America, it contains an estimated 68 percent of the world’s identified lithium resources.

The Lithium Triangle is home to a series of vast salt flats, beneath which sit incredibly lithium-rich brine pools. More promising still is the climate of the region, which is known for being incredibly hot and dry. This represents a considerable boon for extraction operations, which typically rely on evaporative processes.

A powerful investment opportunity

Chile’s mining sector has leveraged its arid geography to great effect. The country’s Salar de Atacama salt flat is the largest-producing brine deposit in the world. It is also home to several major lithium brine operations.

One of these is owned and operated by Albemarle (NYSE:ALB). Currently the largest business provider of lithium for electric vehicle batteries, Albemarle also operates a lithium carbonate plant at La Negra. According to an Albemarle spokesperson, the company has a long history in Chile backed by a unique contract.

SQM (NYSE:SQM) operates another major lithium brine operation in the salt flat. As the world’s largest lithium producer overall, the company recently announced plans to reduce brine extraction in the region by 50 percent by 2030. This announcement came in tandem with a commitment to reduce water usage across all its operations by 40 percent.

Finally, just south of Salar de Atacama is situated the highest-quality lithium pre-production project in Chile. Maricunga is jointly owned by Lithium Power International (ASX:LPI), Minera Salar Blanco and Li3 Energy. Situated just 250 kilometers from Chile’s coast, and 170 kilometers from the mining town of Copiapo, it’s said to possess characteristics directly comparable to Atacama. Maricunga is also adjacent to Highway 31, which connects Northern Chile to Argentina.

The most significant challenge to Chile’s growth, from an investment perspective, is sociopolitical. Although the country has a history of being relatively friendly towards the mining sector, its current government is exploring new legislation that could nationalize both copper and lithium. A new mining royalty bill is also in the works, which could increase tax rates by up to 80 percent.

It’s worth noting that not every investor considers the current political climate to be a risk. South32 (ASX:S32), a spinoff of BHP (ASX:BHP), recently invested US$1.55 billion to purchase a 45 percent stake in the Sierra Gorda copper mine, and a lithium auction held by Chile earlier this year saw Chinese manufacturing company BYD acquire extraction rights for 80,000 metric tons of lithium.

Takeaway

Chile is home to the largest, richest and most valuable lithium deposits in the world. For many investors, the high margins and low cost of lithium extraction in Chile more than make up for the potential of a few political speed bumps.

This INNSpired article is sponsored by Lithium Power International (ASX:LPI). This INNSpired article provides information that was sourced by the Investing News Network (INN) and approved by Lithium Power International in order to help investors learn more about the company. Lithium Power International is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNSpired article was written according to INN editorial standards to educate investors.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Lithium Power International and seek advice from a qualified investment advisor.

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