American Resources Corporation AREC, through its portfolio company, ReElement Technologies, has secured a $25 million investment from the U.S. Department of War to accelerate the expansion of domestic critical mineral and rare earth refining capacity.
The funding will support the expansion of capacity at ReElement's commercial refining campus in Marion, IN, reinforcing U.S. efforts to establish a secure domestic supply chain for strategic minerals used in defense, semiconductors, aerospace and advanced communications.
The investment is being provided through the Department of War's Economic Defense Unit in partnership with the Office of the Under Secretary of War for Acquisition and Sustainment, using the Industrial Base Fund. The funding is intended to strengthen America's industrial base and reduce dependence on foreign processing, particularly China, which currently dominates global rare earth refining and magnet production.
The $25 million investment will fund advanced refining equipment, new production lines and working capital to expand the Marion facility. The expanded campus will process primary mineral concentrates and recycled materials into high-purity rare earth oxides and other critical defense materials.
The expanded facility is expected to produce strategic materials such as yttrium, gadolinium, germanium and gallium using ReElement's proprietary refining technology for military electronics, secure communications, semiconductors, aerospace systems and other advanced technologies. The company has already demonstrated commercial-scale production of more than a dozen rare earth and critical mineral products.
The Marion campus is being expanded through a modular approach that supports efficient scaling based on customer demand. The Department of War investment adds to earlier strategic funding from Transition Equity Partners and Mitsubishi Materials, further advancing ReElement's expansion plans.
Shares of AREC are up 23.8% over the past year compared with the industry’s 34.6% growth.
AREC’s Zacks Rank & Key Picks
AREC carries a Zacks Rank #4 (Sell) at present.
Some better-ranked stocks in the Basic Materials space are CSW Industrials, Inc. CSW, Idaho Strategic Resources, Inc. IDR and Ternium S.A. TX. CSW, IDR and TX sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CSW’s current-year earnings stands at $12.52 per share, implying a 20.6% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average surprise being 3.8%.
The Zacks Consensus Estimate for IDR’s current-year earnings is pegged at $1.52 per share, implying a 33.3% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average surprise being 68.7%.
The Zacks Consensus Estimate for TX’s current-year earnings is pegged at $6.13 per share, indicating a 182.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, with the average surprise being 3.5%.
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American Resources Corporation (AREC): Free Stock Analysis Report
Ternium S.A. (TX): Free Stock Analysis Report
Idaho Strategic Resources, Inc. (IDR): Free Stock Analysis Report
CSW Industrials, Inc. (CSW): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).