Ernest Scheider
(Reuters) – BMW and Yamaha Motor have invested in U.S.-based rare metals processing startup Phoenix Tailings, the latest move by the makers to increase production of strategic metals outside of China.
Rare earths are a group of 17 metals used to make the magnets that convert power into motion for electric vehicles, cell phones and other electronics.
The existing standard for purifying these minerals, known as solvent extraction, is an expensive and dirty process that gradually became unpopular in the United States after it was developed in the 1950s, but Chinese rivals have spent the last 30 years mastering it.
Beijing has taken steps in recent months to curb exports, a move that has fueled a rush across the West for replacement technologies. Phoenix says its process can produce rare earths from mined ore or recycled equipment with little or no emissions.
BMW and Yamaha’s venture capital investment divisions are among several investors — including venture capital funds Envisioning Partners, MPower and Escape Velocity — in Phoenix’s $43 million Series B funding round, which closed Dec. 20, the chief executive said Phoenix’s Nick Myers in an interview with Reuters.
Phoenix declined to disclose each investor’s funding.
The company will use the funds to build a $13 million facility in Exeter, New Hampshire, which can produce 200 metric tons of rare earths annually and is slated to open by June 2025, Myers said.
The remaining funds will be used for research, engineering and business development.
The Massachusetts-based company, which has 33 employees, says it has signed more than $100 million worth of supply contracts, though it would not say with whom. If the Exeter facility is successful, Phoenix plans to build larger processing facilities elsewhere in the US
That could help the company reach its goal of going public within three to five years, Myers said.
MP Materials and Lynas Rare Earths are two of the largest non-Chinese miners and processors of rare earths, although both have struggled with Chinese competition.
Myers said he believes Phoenix can succeed because it does not operate the mine. The company is applying for loans and grants from the US government.
Myers added that he believes Donald Trump, who will become US president on January 20, will be a “very strong boon for onshoring production” and key minerals companies.
Phoenix closed a $10 million Series A funding round in August 2021.
(Reporting by Ernest Scheyder; Editing by Susan Fenton)
