Cyclic Materials and VAC Partner to Recycle Magnet Manufacturing By-products
VAC Awarded $111 Million Tax Credit for New Magnet Factory in USA, Makes Recycling Deal with Cyclic Materials
New Power Technology
April 11, 2024
Cyclic Materials expands amid global call to secure minerals that power everything from EVs to robots.
The world's critical mineral superpower banned exports of technology used to make rare-earth based magnets in December, raising the stakes in the race to build a North American supply chain for key EV ingredients like mixed rare earth oxide (MREO).
But Kingston wants to be the new China.
It's far from the massive leaching lakes and smokestacks of Inner Mongolia, where the industry's epicentre has formed around one of the world's largest rare-earth deposits. But each day in the Ontario city of just over 130,000, workers don hard hats at a rare-earths recycling plant, nestled between an Under Armour store, a coffee roaster and a Cineplex. Operations at the pilot facility Cyclic Materials opened in December are running full-steam ahead, and the startup aims to get its new chemical factory online as soon as April, as well.
It's not the only local player. Fellow rare-earth processor Ucore commissioned a demo plant in the city after scoring $4.2 million in government funding last November for its efforts at "disrupting" China's market control.
"In my conversations with large companies, whether it's auto manufacturers or phone manufacturers, [China's] restrictions…have only heightened their concern about their supply chain coming from one country," Cyclic Materials co-founder Patrick Nee told me when I visited the pilot plant for a tour last month.
"No matter how good your cell phone is, or your motor is, if you have to go back for that one component, the magnet, and get it out of China, you won't be able to make the motor. We've gotten a lot of very open reception from the companies over the last six to nine months."
A chokepoint in the rare-earth elements supply chain could trigger a nightmare across the tech industry. The materials are used not just for electric motors but also military jets, LCD screens, LED lights, lasers, hard drives, speakers and robots. Contrary to their name, they're not actually that rare, but they are difficult to extract. Traditional mining techniques yield about 1,800 tonnes of toxic waste for every ton of rare earths.
Cyclic Materials' pilot factory churns electric motors from cars, as well as products like wind turbines and MRI machine parts, to shake out the core magnets and materials for recycling. The company, which was founded in 2021, is backed by BMW and also works with the Leonardo DiCaprio–backed EV startup Polestar.
Despite the scramble to build alternatives to China's rare-earths technology, it's a gutsy time for Cyclic Materials to expand given the struggles its peers are experiencing. Battery recycler Li-Cycle paused work at its Kingston plant this week and said it will re-evaluate operations at its other North American factories, and Vital Metals couldn't stay afloat with its Saskatoon rare-earths processing project.
Prices for battery metals like nickel and copper are whipsawing, and the EV industry is growing rapidly—but not as rapidly as many people expected. That leaves companies like Cyclic Materials depending on forces outside their control, from metals prices to how interest rates impact would-be car buyers.
Cyclic Materials CEO Ahmad Ghahreman said the company has been prepared from "day one" for a potential tightening in China, and remains confident that the sales slowdown in the EV industry is temporary. "As a recycling company, we are in the commodity business, right? Copper is copper… the price in the market will be defined by folks sitting in an auction in London or New York," said Ghahreman.
"So we have to be price competitive."
Read the full article on The Logic.
