Summary:
BMW and Yamaha invest in U.S. rare earths startup Phoenix Tailings.
Phoenix's process aims for low-emission production of rare earths from both mined and recycled sources.
The startup secured $43 million in Series B funding to establish a new facility in New Hampshire.
Contracts worth over $100 million signed, showcasing strong market demand.
CEO Nick Myers optimistic about the impact of the incoming administration on domestic manufacturing.
Major Investments in Rare Earths
BMW and Yamaha Motor have made significant investments in Phoenix Tailings, a U.S.-based startup focusing on rare earths processing. This move is part of a broader strategy by manufacturers to enhance the production of these strategic metals outside of China.
Understanding Rare Earths
Rare earths consist of a group of 17 essential metals used primarily to create magnets that convert electrical energy into motion, crucial for powering electric vehicles, cell phones, and various electronics.
The Challenge of Current Refinement Methods
The traditional method for refining these minerals, known as solvent extraction, is not only costly but also environmentally damaging. This process, developed in the 1950s, has seen declining popularity in the U.S. as Chinese competitors have mastered it over the last three decades. With recent export restrictions from Beijing, there’s a growing urgency in the West to develop alternative technologies.
Phoenix Tailings' Innovative Approach
Phoenix Tailings claims to have developed a process that can produce rare earths from both mined ore and recycled materials with minimal emissions. Their recent $43 million Series B funding round, which closed on December 20, has attracted various investors, including venture capital firms like Envisioning Partners, MPower, and Escape Velocity.
Future Plans and Growth Potential
The funds will be allocated to construct a $13 million facility in Exeter, New Hampshire, with an expected annual production capacity of 200 metric tons of rare earths by June 2025. Additionally, Phoenix has signed supply contracts exceeding $100 million. If successful, they plan to expand their processing capabilities across the U.S.
Industry Landscape
While MP Materials and Lynas Rare Earths are among the largest non-Chinese miners and processors, they have faced challenges due to stiff competition from Chinese firms. However, Phoenix believes that its unique model—operating without a mine—positions it well for success. The company is actively seeking U.S. government loans and grants to support its growth.
The Political Climate
Phoenix's CEO, Nick Myers, expressed optimism about the incoming administration under Donald Trump, anticipating that it will favor domestic manufacturing and critical mineral companies.
Phoenix Tailings previously closed a $10 million Series A funding round in August 2021, setting the stage for its ambitious plans to go public within the next three to five years.
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