Even in the throes of a global supply chain crisis, the electric vehicle boom continues to dominate. This trend points toward a profitable future not just for automakers, but for firms making the many necessary components. One of the most important of these components is the battery — and demand for its production has fueled a boom that has lifted a wide swath of companies. Today, American Resources (NASDAQ:AREC) is catching a lift for its own role in the EV race. And, as a result, AREC stock has spiked.
What’s Happening With AREC Stock
So what exactly happened?
American Resources announced this morning that it had succeeded in achieving greater than 99.5% purity of lithium, nickel and cobalt from recycled NMC batteries sourced from the manufacturing process of electric vehicles. This is a technology for which the company holds all exclusive licenses and patents. This development was accomplished through the use of displacement chromatography.
AREC stock has been steadily climbing since the news broke this morning and as of this writing, has risen by just over 23%. Shares declined early last week and primarily flatlined between $5 and $7 until markets opened today. Despite some steep declines throughout the month of September, the stock is beginning October on a better note.
Why It Matters
The basic materials sector doesn’t typically receive as much coverage as electric automakers, but that doesn’t mean it isn’t worth paying attention to. This development could help propel a little-known company to the top of a market that is growing up.
This development is a clear victory for American Resources. According to the issued statement, it provides it with a way to isolate lithium, nickel and cobalt for the production of batteries, creating a way to fill market need that is both effective and economical.
As CEO Mark Jensen stated, “Our technology is unique in that it utilizes a cost-effective solution for the final stage of recycling battery metals all the way to the end isolated metals.”
What’s Next for AREC Stock?
There’s one other detail that’s worth paying attention to as you evaluate the future of AREC stock. This development isn’t just innovative and cost effective, it’s a step forward for clean technology.
The EV boom was born out of the need for sustainable technology and building anything, even in part, with recycled materials sounds like progress as the U.S. works toward a future shaped by green energy and clean tech.
Companies that operate in both areas, even those not specifically tied to EV production, have been enjoying an overall very good year, with noticeable gains last month. Things look good for AREC stock right now, which is still trading at only a few dollars per share. If you’re looking for a bullish clean energy play, it is absolutely worth watching.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
