US rare earths start-up Phoenix Tailings has closed a $43mn Series B funding round — which included the investment arms of German carmaker BMW and Japanese motorcycle manufacturer Yamaha Motor — to ramp up production to 200 t/yr.
The round was led by Envisioning Partners, with participation from US venture capital firms Escape Velocity and In-Q-Tel (IQT), as well as Yamaha Motor Ventures and BMW i Ventures.
Phoenix Tailings started producing heavy rare earths dysprosium and terbium, as well as neodymium-praseodymium, in 2023 at its pilot refining facility in Burlington, Massachusetts. The company previously raised $30mn in funding and an additional $5mn in grants from US government agencies, including the Department of Energy and the Department of Defense. Phoenix initially planned to produce 120 t/yr at full capacity, but with this new financing it intends to ramp up output further.
The US government has placed an emphasis on building a domestic supply chain for rare earths given its importance in the production of electric vehicles, electronics, wind turbines and military equipment. The impetus has grown since China banned the export of rare earth extraction and separation technologies in December 2023, and restricted the export of rare earth magnet production technologies.
While there have been efforts to establish mining, extraction and separation operations outside China, international ore producers have still had to send material to China for refining and magnet production as it has a near monopoly. A growing number of companies, such as Phoenix Tailings, are developing refining capacity in the US and other western countries to provide alternative sources of supply.
The refining process Phoenix is developing extracts and refines rare earth metals from mining waste or recycled equipment using recyclable solvents and water. The oxidised metal is placed into molten salt and electricity is applied. This produces less carbon emissions than traditional highly-polluting solvent extraction processes.
The company plans to build a new facility in Exeter, New Hampshire which would start operating in June. If the plant is successful, Phoenix would then build larger processing facilities in other locations in the US.
