BMW and Yamaha Motor have made strategic investments in Phoenix Tailings, a U.S.-based startup focused on rare earths processing, marking a significant effort by manufacturers to enhance production of these crucial metals outside of China. Rare earths, a group of 17 metals essential for manufacturing magnets used in electric vehicles, cell phones, and various electronics, are at the forefront of global demand.
The conventional method for refining rare earth minerals, known as solvent extraction, is not only costly but also environmentally detrimental. Despite its origins in the United States in the 1950s, this process has fallen out of favor domestically while Chinese competitors have honed their expertise over the past three decades. In response to China’s recent restrictions on exports, Western countries have been actively seeking alternative sources for these vital materials.
Phoenix Tailings has introduced a breakthrough processing technique that boasts minimal to zero emissions, offering a cleaner and more efficient solution for extracting rare earths from both mined ores and recycled equipment. In a recent development, BMW and Yamaha’s venture capital arms joined other investors, including Envisioning Partners, MPower, and Escape Velocity, in Phoenix’s successful $43 million Series B funding round that concluded on December 20. According to Phoenix CEO Nick Myers, the funding will fuel the establishment of a state-of-the-art $13 million facility in Exeter, New Hampshire, capable of producing 200 metric tons of rare earths annually, with an anticipated launch date set for June 2025.
Beyond facility construction, the funding will support ongoing research, engineering efforts, and business expansion initiatives. Phoenix, headquartered in Massachusetts and currently employing 33 professionals, has secured supply agreements exceeding $100 million, although specifics remain undisclosed. With plans for potential expansion to larger processing facilities nationwide, Phoenix aims to position itself for a future public offering within the next three to five years.
While MP Materials and Lynas Rare Earths stand as major non-Chinese players in the rare earths sector, they have encountered challenges due to intense competition from Chinese counterparts. Myers remains optimistic about Phoenix’s prospects, emphasizing the company’s non-mining operational model. In pursuit of additional financial backing, Phoenix is pursuing government loans and grants.
Looking ahead, Myers expresses confidence in the leadership of President-elect Donald Trump, anticipating favorable conditions for domestic manufacturing and critical mineral industries under the incoming administration. Notably, Phoenix recently concluded a $10 million Series A funding round in August 2021, underscoring growing investor interest in the company’s innovative approach to rare earths processing.
