The first quarter of the new decade was obviously marred by corona and the financial turmoil in the world economy that followed in its wake. These developments affect all of us on several levels, including the operations of Swedish Stirling. However, we rapidly took several measures that will put us on good footing in case the effects last for a long time. The measures are likely to somewhat delay certain projects but strengthen our financial sustainability.
The quarter was marked by a number of important events that will be crucial to the Company’s continued development. In mid-February, we signed an agreement with Glencore for an installation of up to 25 PWR BLOK units at the smelter in Lydenburg. As a result, we now have commercial agreements in place with the two largest South African ferrochrome producers, Glencore and Samancor. Together, these account for over 90 percent of the entire market in the country. This gives us a solid base for a wider-scale roll-out of the PWR BLOK in South Africa in the coming years.
In February, we arranged an on-site visit and demonstration of the PWR BLOK at Afarak Mogale’s smelter in South Africa for a number of select investors, analysts and customers, which was highly appreciated. Attendees also had a unique opportunity to visit Samancor’s TC Smelter facility. This facility is considerably larger and more modern than the smelter at Mogale, and I believe that it is only when seeing these facilities first hand that you fully understand the enormous potential of the PWR BLOK. According to the company’s own figures, Samancor Chrome accounts for about 10 per cent of South Africa’s total electricity consumption and has monthly electricity costs of about SEK 1 billion. PWR BLOK 2 will be installed at TC Smelter, one of Samancor’s five ferrochrome production facilities in South Africa. The unit shipped from Sweden at the end of February. It arrived on schedule in Durban but remained stuck on board the ship for a period of time due to the local restrictions. The unit was not unloaded until early May, but despite the delay, we hope to be able to install and commission the facility at TC Smelter during Q2 as planned.
In March we conducted targeted share issues totalling SEK 147 million. One of the new investors in Swedish Stirling is Daniel Ek, CEO and founder of Spotify, a development that obviously sends a signal of strength. The Company also received its first institutional investors, both Swedish and foreign. While it is true that we have been in talks with several of these new investors for some time, I am convinced that the site visits in South Africa were an important reason that swayed their investment decisions.
At the end of the quarter, we started operations in our new Stirling laboratory in Gothenburg. The idea was for all shareholders to be invited to an inauguration and demonstration to be held directly after the Annual General Meeting in April, but for obvious reasons we will have to postpone this until a later date. Having a new modern laboratory directly adjacent to the headquarters is a strength not to be underestimated. During the quarter, we continued to receive more inquiries and notifications of interest related to our PWR BLOK technology. Thanks to the new laboratory, we can further increase the pace of our development work and be able to respond to the high interest faster as soon as restrictions ease. The market obviously wants lower electricity costs while at the same time reducing its CO2 emissions. The market wants the PWR BLOK.
Swedish Stirling AB