Rare Earth Exchanges

Phoenix Tailings Secures $43m from VCs and Strategic Investors – Next Generation Rare Earth Processing in USA

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Highlights

  • Phoenix Tailings develops a groundbreaking low-emission process to extract rare earth metals from mining waste without toxic byproducts.
  • The company secured $43 million in Series B funding from strategic investors like BMW and Yamaha.
  • Plans to build a $13 million processing facility in New Hampshire.
  • Aims to produce 3,000 tons of rare earth metals by 2026.
  • Phoenix aims to challenge Chinese market dominance through innovative extraction technologies.

Recently, Rare Earth Exchanges reported on MIT-spinoff Phoenix Tailings (opens in a new tab), a startup that has developed a groundbreaking process to extract rare earth metals from mining waste without toxic byproducts or carbon emissions.  The company aims to produce over 3,000 tons of rare earth metals by 2026, representing 7% of total U.S. production, using an electrochemical extraction method.  Phoenix Tailings currently produces neodymium, dysprosium, nickel, and magnesium. Applications of their products include wind turbines, electric cars, and defense technologies.  At the onset of the launch, the team bootstrapped with loans to start. The company has also received two grants from the U.S. Department of Energy’s ARPA-E program(opens in a new tab) totaling more than $2 million. Specifically, the 2023 grant supports the development of a system to extract nickel and magnesium from mining waste in a way that uses carbonization and recycled carbon dioxide. Now more, strategic investors have joined including BMW and Yamaha Motor with $43 million Series B funding round.

As discussed above,  Phoenix Tailings claims to have developed a cleaner, low-emission method for producing rare earths from both mined ore and recycled equipment.

The funding, which also includes investments from venture capital funds Envisioning Partners, MPower, and Escape Velocity, will support the construction of a $13 million processing facility in Exeter, New Hampshire. Expected to open by mid-2025, the facility will have an annual production capacity of 200 metric tons, as reported by Reuters.

Phoenix plans to allocate the remaining funds to research, engineering, and business development. If successful, the Exeter facility could pave the way for larger facilities across the U.S. and bolster the company’s goal of going public within the next three to five years.

Phoenix’s CEO, Nick Myers, highlighted the company’s unique position in avoiding the complexities of mining while focusing on processing, which he believes positions them for success against Chinese competition. The company has already secured over $100 million in supply contracts, though it declined to disclose specifics. Additionally, Phoenix is pursuing U.S. government loans and grants to further its initiatives.

Despite the promising outlook, potential investors might question the scalability of Phoenix’s technology, the company’s ability to compete against established players like MP Materials and Lynas Rare Earths, and the risk posed by continued Chinese dominance in the rare earths market.  As we have articulated at Rare Earth Exchanges, a hybrid approach will be necessary to help the U.S. overcome the significant rare earth element ramparts the Chinese have constructed.

Moreover, while Phoenix has raised significant funding, achieving profitability and scaling production to meet global demand will be critical benchmarks, but they appear off to a very good start.   The company’s optimism about the upcoming Trump administration’s policies could also face uncertainty depending on future political and regulatory developments.

As Phoenix Tailings seeks to reshape the rare earths landscape with cleaner technology and domestic production, its ability to deliver on these ambitious plans will be closely watched by both investors.

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