American Battery Technology Co (ABAT) saw its stock price surge in premarket trading on Monday, climbing 29.58% to $4.03, following news that the U.S. Department of Energy (DOE) has fully reinstated a $115 million grant for the company's planned lithium refinery in Tonopah Flats, Nevada. The stock closed Friday at $3.11.
The decision reverses a previous termination of the grant last October, which had cut $57.7 million in federal funding. The DOE has now restored the full amount with no changes to the awarded funds or technical milestones, though the project timeline has been adjusted to account for the review period.
Ryan Melsert, CEO of American Battery Technology, stated that the DOE determined continued federal support is warranted, noting that few grants terminated last fall have successfully won their appeals. The company's first phase aims to produce 5,000 tonnes per year of battery-grade lithium hydroxide, a key material for electric vehicle and energy storage cathodes.
Despite the positive news, ABAT shares remain highly volatile, with a 52-week range of $1.20 to $11.49. Trading volume on Friday reached 20.65 million shares, well above the average of 5.71 million. The broader market context includes a recent sharp decline in U.S. stocks, with the Nasdaq Composite falling 4.18% on Friday, its steepest one-day drop since April 2025, amid renewed rate-hike fears.
American Battery's financial picture has improved, with fiscal third-quarter revenue of $7.8 million, a 64% increase from the previous quarter, and its first positive gross margin of $0.7 million. However, the business remains small, and the company faces significant risks from permitting, financing, construction, and volatile lithium prices.
The lithium sector has seen a recovery in sentiment, with Albemarle (ALB) posting strong profits and lithium prices rebounding. However, analysts warn that prices could slide again if sidelined supply returns. CME lithium hydroxide contracts are up 86% year-to-date, trading above $20,000 per metric ton, but forecasts from Benchmark Mineral Intelligence, BNP Paribas, and Citi suggest potential downside.
For ABAT, the reinstated grant is a major milestone, but the path forward remains uncertain. The company has flagged regulatory approvals, investment decisions, and financing as key uncertainties. Investors will be watching whether the premarket gains hold and whether the grant translates into tangible construction progress, customer agreements, and improved cash flow.
