RENO, Nev. - Aqua Metals (NASDAQ: NASDAQ:AQMS) and 6K Energy have entered into a strategic supply agreement to create North America's first sustainable circular supply chain for minerals critical to lithium-ion battery production. This collaboration is set to support the growing electric vehicle and energy storage markets, aligning with U.S. initiatives to strengthen domestic manufacturing and reduce carbon emissions.
Under the agreement announced today, Aqua Metals will supply recycled battery materials from its Sierra ARC facility in Reno, NV, to 6K Energy's PlusCAM™ plant in Jackson, TN. These materials, essential for manufacturing cathode active material (CAM), are valued at over $50 million annually at current metal prices once both facilities are fully operational.
Steve Cotton, President and CEO of Aqua Metals, highlighted the significance of this partnership, stating that it represents a critical step in establishing a sustainable battery ecosystem in North America. The agreement is designed to meet the requirements for domestic content incentives under the Inflation Reduction Act.
Starting in 2024, Aqua Metals plans to provide 6K Energy with 30% of the nickel and lithium carbonate required for the PlusCAM facility. This move enables the incorporation of recycled feedstock into battery materials, offering a low-carbon, cost-effective, and domestically-produced option for the first time.
Sam Trinch, President of 6K Energy, emphasized the partnership's goal to set new industry benchmarks for environmental responsibility and cost-efficiency. 6K Energy's UniMelt® manufacturing process is recognized for its low-carbon footprint in battery material production.
The United States is on track to expand its lithium battery manufacturing capacity to nearly one terawatt-hour by 2030. The Aqua Metals and 6K Energy alliance is poised to create the only sustainable closed-loop supply chain for critical battery materials in North America. This initiative is particularly timely as the demand for recycling manufacturing scrap and end-of-life batteries grows.
Both companies are pioneering the use of electrified processes that can be powered entirely by clean energy. They aim for net-zero operations in the future and have developed patented processes that eliminate the production of thousands of tonnes of sodium sulfate waste, a common byproduct in traditional cathode production and recycling methods.
This information is based on a press release statement from Aqua Metals and 6K Energy.
InvestingPro Insights
In the wake of the strategic supply agreement between Aqua Metals (NASDAQ: AQMS) and 6K Energy, investors may be curious about the financial health and market performance of Aqua Metals. According to InvestingPro data, Aqua Metals currently holds a market capitalization of approximately $50.36 million. Despite being a niche player in the battery recycling industry, the company's financials reveal some challenges. The last twelve months as of Q3 2023 show a significant revenue decline of 85.88%, with gross profit margins deeply in the negative at -20896.0%. This indicates that the company is not just failing to turn a profit but is also spending more to produce its goods than it earns from sales.
InvestingPro Tips suggest that while Aqua Metals holds more cash than debt on its balance sheet, a positive sign for financial stability, analysts do not expect the company to be profitable this year. Additionally, the company's valuation implies a poor free cash flow yield. These insights might be crucial for investors considering the long-term viability and growth prospects of Aqua Metals, especially in light of the new partnership aimed at revolutionizing the battery material supply chain.
For those looking to delve deeper into the financials and future outlook of Aqua Metals, InvestingPro offers a wealth of additional tips. Currently, there are 15 more InvestingPro Tips available for AQMS, which can be accessed at https://www.investing.com/pro/AQMS. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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