American Resources Corp (NASDAQ:AREC) earlier this week announced that its subsidiary Electrified Materials Corporation has procured its first battery shredding line as part of an expansion into lithium-ion battery recycling focused on lithium iron phosphate (LFP) chemistry.
Speaking with Proactive, CEO Mark Jensen said Electrified Materials is designed to complement the company’s ReElement refining platform by preprocessing recycled materials and supplying feedstock for downstream recovery operations.
Proactive: News came out from the company dealing with your Electrified Materials Corporation, which is another subsidiary that you have. Before we go to the news, maybe just explain to everyone about that subsidiary.
Mark Jensen: Electrified Materials Corporation is 100% owned by American Resources. Since the divestitures of all the other businesses, American Resources is laser focused on investing and taking minority stakes in mining assets throughout the world, while Electrified Materials is on the other spectrum, where the recycling division is preprocessing recycled components to feed into the ReElement platform. Both are designed to feed ReElement with feedstock — one from recycling and one from mined ore. Electrified Materials is focused not only on magnet materials, but also germanium and other feedstocks, as well as batteries.
The news is that you've procured your initial battery shredding line as part of a big expansion. Tell us what you have right now and what this will lead to.
We've been aggregating lithium-ion batteries, mostly focused on LFP. There’s a strategic reason for that. The NMC market is a little crowded, and we believe we're the only ones that can economically monetize the entire value stream of LFP. We spent about five years looking at technology. People say the battery recycling space is crowded right now with a lot of DOE-funded projects, but the difference between us and them is that we can go all the way through the lifecycle. We also cared about using best-in-class technology and processes while doing it safely. There have been a lot of disasters in the battery recycling space, including explosions and facilities burning down. We wanted to wait until the technology matured before buying our first shredding application.
Explain why you focus on lithium iron phosphate battery chemistry specifically.
We recycle and produce black mass at Electrified Materials. We sell the copper, aluminum, ferrous and other materials in the battery itself. LFP doesn’t contain cobalt or nickel, so many battery recyclers can’t refine those materials and instead sell them as an intermediate product. For us, we can go all the way through to high-purity lithium carbonate. We know a number of commercial partners that need it for technical and commercial reasons. Given our partnership with ReElement and the sister relationship between the companies, we can monetize the black mass and produce lithium carbonate. We can make money not only by offering lower tolling or tipping fees to battery customers, but also by sharing in the economics of the lithium carbonate produced by ReElement.
How big is this sector, and is it growing rapidly?
Over the last few years you've seen a massive transformation in the battery space. A lot of people were looking at NMC batteries, but now everybody's moving to LFP. It’s a safer battery, much lower cost and doesn’t contain conflict minerals. Every data center has battery storage, EVs are switching to LFP, and energy storage systems are using LFP as well. With grid disruptions and alternative energy growth, batteries are needed to smooth out the grid. You're seeing a huge influx in the use of LFP batteries globally.
As part of this expansion, what timing are we looking at?
It’ll definitely start happening this year. We bought the equipment and it should be delivered in the next few months. It will be relatively small scale in 2026 and then continually ramp into 2027. We’re already collecting multiple tons of batteries weekly. We didn’t want to buy the shredding equipment until we had at least a year’s worth of supply on the ground, and we have that now. We continue taking batteries every day while waiting for the equipment and are expanding our collection footprint through partners and potential JV relationships.
Quotes have been lightly edited for style and clarity