The EV revolution has driven growth in companies directly benefiting from this secular catalyst. However, companies like American Resources (NASDAQ:AREC) are sneaky, indirect plays. Indeed, such plays are recommended options for investors seeking to capitalize on the growth in this sector. Investors in AREC stock have been well-rewarded this year, with shares more than doubling YTD.
Today, shares of AREC stock are up more than 9% at the time of writing on a pretty important announcement. Let’s dive into what this announcement is. Let’s also look at why more upside could be on the horizon for AREC investors.
AREC Stock Moving Today on Announcement
American Resources is an interesting company in the EV space. The production increase in EV options will require batteries. A lot of batteries. It turns out, battery development requires rare earth materials which are very difficult to find. Indeed, the word “rare” is used for a reason.
The value in AREC stock is its socially responsible approach to providing rare earth elements (REEs) to the marketplace. The company uses a novel process to revalorize coal, coal waste and coal byproducts such as fly ash into REE concentrate, carbon, fly ash, and hydrogen, all core elements used in battery design.
Today, the company announced it’s moving forward with the commercialization of a 2-kilowatt REE processing electrolysis facility. An exclusive license with Ohio University was previously signed in February, but the announcement today lays the foundation for investors to begin to factor this growth prospect into AREC stock. Previous research noted some impressive initial results. The company noted that its successful electrolysis of fly ash led to “the production of hydrogen in the cathode of the cell and the extraction of 65% Yttrium (Y), 59% Dysprosium (Dy), and 76% Ytterbium (Yb).”
With most of the world’s REE residing in China, American manufacturers are seeking more domestic production to support the EV supply chain. Investors in AREC stock are likely betting on a continued surge in the Buy America program President Joe Biden has put in place.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.
