American Resources Corporation (NASDAQ:AREC) revealed that it has forged a solid South African partnership by signing an offtake agreement to buy over 6% of lithium spodumene ores from regional operating mining concessions which will be refined by it into pure, battery-grade lithium carbonate or hydroxide.
The Fishers, Indiana-based supplier of raw materials to the rapidly growing global infrastructure market, said the lithium spodumene ores from Africa will be refined to greater than 99.9% battery-grade lithium carbonate or hydroxide using its patented ReElement Technologies refining process.
"Our relationships in Africa are expediting our ability to drive supply chain efficiency and move quickly into the continent in a way that will both benefit our domestic supply chain for the supply of ultra-pure critical and rare earth elements, while at the same point provide an economic and social benefit to the African nations where we are operating,” said American Resources CEO Mark Jensen.
“Our model is to work with the mining concessions to upgrade the value of the local feedstock sources through worldwide industry accepted processing standards using mechanized equipment, while also reinvesting back into these communities through the use of our revolutionary refining technologies, infrastructure, and job creation, thereby creating a higher tax basis for the local economies.”
The offtake agreement gives American Resources secure access to lithium spodumene ores at a port city in southern Africa. The ores will be initially shipped to the US to be processed domestically at one of ReElement Technologies' refining facilities using its patented, multi-modal chromatography process.
Initially the company will get 5,000 metric tons of lithium spodumene ore per month, while it will later receive over 20,000 metric tons of lithium spodumene ore per month from two lithium mining concessions.
The move is expected to fill a “missing piece” within the US domestic supply chain for critical and rare earth elements, noted the company.
South African refining facility
American Resources said the offtake deal is expected to begin at 60,000 metric tons per annum, then scale to greater than 240,000 plus metric tons every year. Based on 6% lithium spodumene, the company expects its high-purity lithium carbonate production from ReElement Technologies to be around 32,000 to 34,000 metric tons per year.
Additionally, American Resources is working with its partners on selecting a site next to a regional port for a South African refining facility to reduce shipping costs, carbon footprint and create local jobs.
The facility is expected to process lithium spodumene ores in a manner that yields ultra-pure, battery-grade lithium carbonate or hydroxide, which can then be used as a commercial grade feedstock for either domestic battery manufacturers in the US or local battery production in the area.
American Resources is focused on the extraction and processing of metallurgical carbon, an essential ingredient used in steelmaking, rare earth minerals for the electrification market, and reprocessed metal to be recycled.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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