FISHERS, IN – ReElement Technologies Corporation, a subsidiary of American Resources (NASDAQ:AREC) Corporation (NASDAQ:AREC), has announced a commercial partnership with a prominent U.S. auto manufacturer to recycle electric vehicle (EV) motor components. This deal, which follows a successful trial program, aims to create a sustainable circular economy for rare earth magnets in the United States.
The agreement involves recycling rare earth elements from EV motors and refining them into ultra-pure, magnet-grade rare earth oxides (REO), which are essential for new magnet production. This process is expected to keep these critical materials within the domestic supply chain for both commercial and defense applications.
Mark Jensen, CEO of ReElement Technologies, expressed optimism about the partnership's potential to provide a resilient supply of rare earth elements in the U.S. He emphasized the profitability, high-purity, and scalability of their recycling and refining process, which aligns with the growing demands of the energy transition.
ReElement Technologies has previously demonstrated its capability to produce 99.5% pure neodymium oxide from end-of-life magnets and can now recycle, separate, purify, and refine other magnet metals to commercially supply the domestic magnet supply chain. The company has also partnered with Advanced Magnetic Labs Inc. and USA Rare Earth Magnets LLC and is in discussions with additional domestic magnet producers.
The company's patented chromatographic separation and purification technology is touted as a cost-effective, scalable, and environmentally safe alternative to current methods used globally for rare earth and critical element separation and purification. As production scales up, this technology is expected to reduce U.S. dependency on foreign nations for these critical materials, while creating a circular life-cycle solution.
This news is based on a press release statement and reflects the steps taken by ReElement Technologies to support the domestic supply chain for rare earth and battery elements in the electrified economy.
InvestingPro Insights
As ReElement Technologies Corporation, a subsidiary of American Resources Corporation (NASDAQ:AREC), forges ahead with its commercial partnership to recycle electric vehicle (EV) motor components, investors may find the company's financial health and market valuation to be of interest.
InvestingPro Data provides real-time metrics indicating that AREC has a market capitalization of $109.58M and is trading at a price-to-earnings (P/E) ratio of 12.22. Despite the company's profitability over the last twelve months, with a basic and diluted earnings per share (EPS) of $0.11, analysts are anticipating a sales decline, with revenue growth down by 45.68% for the same period. This reflects a challenging environment for AREC, as the company also faces a high Price / Book multiple of 7.46, suggesting that the stock may be trading at a premium compared to its book value.
InvestingPro Tips highlight that AREC's stock has recently taken a significant hit, with a one-week price total return of -17.16%. This may be due to concerns over the company's short-term obligations exceeding its liquid assets, which could pose liquidity risks. However, the company's low P/E ratio relative to near-term earnings growth could indicate that the stock is undervalued if the company can maintain its profitability.
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