Bloom Energy NYSE:BE, a U.S. fuel-cell manufacturer whose systems are used to power data centers, has pushed back against claims that it remains dependent on Chinese scandium despite telling investors otherwise. Hunterbrook Media, which works alongside short-selling hedge fund Hunterbrook Capital, published a report alleging that Bloom continues to rely on Chinese supplies of the critical mineral. Hunterbrook said its conclusions were based on global trade data, Chinese corporate records, satellite imagery, and discussions with Bloom's suppliers in China. Bloom described the report as false and misleading, while its shares closed 5.7% lower at $254.29 on Wednesday before recovering roughly 3.1% on Thursday. The stock had gained almost 1,000% over the previous year as demand increased for Bloom's fuel-cell products used to power data centers.
Bloom uses scandium to improve the performance and durability of its fuel cells while allowing them to operate at lower temperatures. The company said it purchases scandium oxide from several suppliers across multiple countries and has enough material to meet its current fuel-cell demand and backlog. Bloom also stated that its supply is not dependent on China and that its sourcing network could support annual production of 25 gigawatts of fuel cells, with further capacity expansion planned. Chief Operating Officer Satish Chitoori said no single supplier or country determines Bloom's supply position, although the company has not disclosed the exact locations of its scandium sources because it considers that information important to protecting supply-chain resilience.
The dispute may matter to investors because scandium remains one of the world's smallest critical-mineral markets, with annual global consumption estimated at only 30 to 40 metric tons. China has spent years expanding scandium recovery and refining capacity, while Hunan Oriental Scandium, a Chinese scandium supplier, says it now provides more than half of the world's fuel-cell-grade scandium oxide. Beijing has also added scandium to a list of strategic minerals requiring export licenses, increasing attention on alternative supplies from countries including Russia, the Philippines, Canada, and Australia. Rio Tinto Group NYSE:RIO, a global mining company recovering scandium from titanium dioxide operations in Canada, and Sunrise Energy Metals, an Australian developer seeking to expand scandium supply, are among the companies pursuing non-Chinese production. NioCorp Developments, the developer of a proposed Nebraska critical-minerals project, received $10 million from the Pentagon last year, although most projects remain years away from significant output. Baird Equity Research analyst Ben Kallo recommended buying Bloom shares on weakness, arguing that the scandium issue raised in the short report may not represent a major risk because the supply chain has been working to address the constraint for years.