ABTC secures $150m for new battery recycling plant

RENO, Nev. - American Battery Technology Company (NASDAQ: ABAT), a leader in battery materials and recycling technology, has been awarded a $150 million grant by the U.S. Department of Energy. This federal investment will support the construction of ABTC's second commercial-scale lithium-ion battery recycling facility, aimed at bolstering the North American supply chain for battery metals essential to the electrification transition.

The new facility, which follows ABTC's first recycling plant commissioned near Reno, Nevada in Fall 2023, is expected to process around 100,000 tonnes of battery materials annually. The plant is part of a strategic expansion to meet increasing demand from battery manufacturers, automotive OEMs, and community recycling programs.

ABTC CEO Ryan Melsert expressed gratitude for the government's support and confidence after a rigorous year-long evaluation process. The project will draw on a diverse set of partners, including BASF for feedstock supply and critical mineral product off-taking, Siemens for global engineering, and various educational and research institutions for workforce development and technology advancement.

This facility is set to create approximately 1,200 construction jobs and 300 operational jobs, focusing on community engagement and sustainable manufacturing practices. The initiative also aims to provide equitable opportunities in underserved communities and establish career pathways in the burgeoning battery recycling industry.

ABTC's innovative approach to battery recycling diverges from traditional high-temperature smelting or shredding methods, instead utilizing strategic de-manufacturing and chemical extraction processes. These methods are designed to produce battery-grade materials cost-effectively and with a lower environmental impact.

The company's efforts are part of a broader push to establish a circular supply chain for domestically-sourced battery metals. ABTC has previously received multiple awards and tax credits for its recycling technologies and lithium hydroxide manufacturing processes, underscoring the federal government's commitment to advancing domestic energy projects.

With the technical and economic evaluations complete, ABTC is poised to enter the contracting phase for the grant, with the project's commencement slated for 2025. This development is based on a press release statement from American Battery Technology Company.

In other recent news, American Battery Technology Company (ABTC) has announced significant strides in its operations. The company has successfully produced lithium hydroxide using proprietary technologies, marking a critical step toward reducing U.S. reliance on foreign lithium sources. Furthermore, ABTC plans to construct a refinery capable of producing 30,000 tons of lithium hydroxide annually, supported by a $57.5 million U.S. Department of Energy grant.

ABTC has also secured a binding purchase agreement with a domestic customer for its recycled black mass material, a significant commercial achievement. This development comes as the company initiates the commissioning phase of its lithium hydroxide pilot plant, furthering its strategy to commercialize lithium extraction from domestic resources.

In terms of personnel changes, ABTC has appointed Steven Wu as its new Chief Operating Officer, who will be responsible for scaling up the company's operations. This follows the departure of Andrés Meza, the outgoing COO. Additionally, the company has appointed Scott Smith, a former Tesla (NASDAQ:TSLA) executive, as its Vice President of Financial Planning and Analysis.

Lastly, ABTC has secured an additional $40.5 million in tax credits for the development of a new commercial battery recycling facility in the United States. These recent developments underscore ABTC's progress in both lithium production and battery recycling.

InvestingPro Insights

As American Battery Technology Company (NASDAQ: ABAT) gears up for its second commercial-scale lithium-ion battery recycling facility, bolstered by a significant federal grant, the financial metrics from InvestingPro provide a snapshot of the company's current market position. ABAT's market capitalization stands at $60.94 million, reflecting the market's valuation of the company's equity. Despite the challenges in the industry, ABAT's P/E ratio (adjusted) for the last twelve months as of Q3 2024 is -1.68, indicating that the market currently does not attribute earnings to the stock price, which is not uncommon for companies investing heavily in growth and expansion.

InvestingPro Tips suggest that ABAT's Price / Book ratio for the same period is 0.87, potentially signaling that the stock is undervalued relative to the company's book value, which could attract investors looking for assets at a price less than their intrinsic value. Additionally, the EBITDA Growth rate has seen a significant decline of -53.72% in the same timeframe, highlighting the need for the company to stabilize and potentially improve its earnings before interest, taxes, depreciation, and amortization.

For investors considering ABAT as part of their portfolio, it's worth noting that the company's stock has experienced a 1 Year Price Total Return of -90.41% as of the same date, which may raise concerns about its short-term performance. However, with the new facility in the pipeline and the support of the U.S. Department of Energy, ABAT is positioning itself for future growth in the battery recycling sector. For a more comprehensive analysis, there are additional InvestingPro Tips available, offering deeper insights into ABAT's financial health and future prospects.

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