American Resources Corporation (NASDAQ: AREC) announced that its subsidiary Electrified Materials Corporation has acquired a battery shredding line to process lithium-ion batteries and produce feedstock materials for refining.

The new equipment expands EMCO's existing capabilities for processing magnet materials, copper, aluminum and ferrous metals from end-of-life products and manufacturing scrap. The company will focus initially on lithium iron phosphate battery chemistry, which represents one of the fastest-growing segments in the lithium-ion battery market.

EMCO will provide disposition, shredding and pre-processing services for end-of-life, off-warranty and off-specification lithium-ion batteries. The processed materials will supply critical battery element feedstocks to ReElement Technologies Corporation for downstream separation, purification and refining.

The companies stated they have validated a recycling pathway for LFP batteries based on lithium recovery economics, rather than traditional models dependent on nickel and cobalt monetization. LFP batteries contain lower levels of nickel and cobalt compared to other lithium-ion chemistries.

"This is another important step in our strategy to build a comprehensive domestic critical mineral supply chain," said Mark Jensen, Chairman and CEO of American Resources Corporation, in a statement based on the press release.

EMCO expects to process multiple lithium-ion battery chemistries including LFP, nickel manganese cobalt, lithium cobalt oxide, lithium manganese oxide and other emerging chemistries. The expansion is supported by private capital raised at the EMCO subsidiary level and a State of Indiana recycling grant.

The acquisition follows EMCO's previous expansion of pre-processing capabilities for magnets, copper, aluminum and ferrous metals as part of American Resources' strategy to develop front-end recycling capabilities that complement ReElement's refining platform.