If you're looking for exposure to the battery materials industry, then one broker thinks you should consider Calix Ltd (ASX: CXL).
Rather than pulling battery materials out of the ground, Calix develops technology to make the process better.
For example, on Wednesday, Pilbara Minerals Ltd (ASX: PLS) announced that it would be pushing ahead with the construction and operation of a Mid-Stream Demonstration Plant at the Pilgangoora Operation.
This will be through a joint venture between the lithium giant and Calix, which utilises the battery materials technology company's patented electric kiln technology.
Pilbara Minerals highlights that independent life cycle assessment studies estimate that converting spodumene using electric calcination when using 100% renewable energy has the potential to reduce calcination carbon emissions intensity by >80%. This is a big positive given that this is one of the most energy-intensive steps of the lithium battery materials production process.
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Which broker is positive on this ASX battery materials technology share?
Bell Potter is the broker in question. This morning, its analysts responded to the Pilbara Minerals news by retaining their speculative buy rating on the company's shares with a trimmed price target of $8.70.
Based on the current Calix share price of $4.24, this implies more than 100% upside for investors over the next 12 months.
Its analysts believe that Calix represents a good option for ESG-focused investors. It explains:
CXL's growing suite of CFC applications target global challenges, including decarbonisation of hard-to-abate industrial processes (lime, cement and steel making), and improvement to supply chain efficiency (lithium concentrate value adding). CXL represents a valuable sustainable investing opportunity for ESG-focussed investors. CXL is a development company with prospective operations and cash flows only. Our Speculative risk rating recognises this higher level of risk and volatility of returns.
