Cyclic Aims to Build Domestic Rare Earths Supply Chain

Rare earth elements are a hot commodity, and the demand spike will likely continue, possibly climbing sevenfold by 2030, projects the International Energy Agency. But these metals are hard to come by in lieu of mining for them, which is an extremely energy-intensive process. Meanwhile, rare earths sit in tens of thousands of consumer products that are eventually discarded—including inside the magnets that once powered those products.

Yet only about one percent of magnets that go into these mass-manufactured wares get recycled. That’s why Ontario-based metals recycler Cyclic Materials is targeting them for their rare earth elements.

“Our goal is to capture magnets and bring them back to the beginning of the supply chain in the form of raw rare earth oxides. That is how they are traded as a commodity,” says Patrick Nee, Cyclic Materials co-founder and senior vice president of Strategic Partnerships. 

“They will hopefully make it back into magnets to go into new cars, iPhones, speakers, or other products that will also be recycled in time. So, we will be creating a circular model enabling us to build a domestic supply chain for magnets and rare earths,” Nee says.

Today that supply chain is nearly nonexistent in the U.S.; China dominates the market.

Cyclic is especially focused on feeding rare earths back to OEMs for their electric vehicle (EV) motors, but the company wants to go beyond supplying the industry at large. The ultimate goal is to return the feedstock sourced from a given manufacturer back to that same manufacturer. Required compositions change over time, even for the same application, so, the plan is to remix the raw materials at the unique ratio needed for say a new Prius or for BMW’s EV lineup.  

Going back to raw materials enables such customization because it’s a way to get maximum flexibility to make any magnet of any composition, Nee says.

Having recently launched a commercial-scale demo facility in Kingston, Ontario, the first to recycle mixed rare earth oxides in North America, Nee believes the company is in the right place at the right time.

“OEMs are trying to figure out their strategy for complying with the European Union’s Critical Raw Materials Act (CRMA), which sets minimum recycled content requirements for products.

“These manufacturers are also focused on moving some of their supply chain out of China,” he says.  

Unlike most of the world, China has the infrastructure to separate and make rare earth alloys at scale. It processes about 90 percent of global rare earths worldwide, according to Adamas Intelligence.

Nee and partner Ahmad Ghahreman started down their metals recovery path after early conversations with manufacturers about what mattered to them.

“They would say the battery is our biggest worry, but our second biggest worry is motors and the magnets inside the motors. Those need to be recycled too,” Nee recalls.

So, the partners looked at rare earths in these magnets to understand why only one percent of them were recycled.

“We realized that they were sticking to steel, and following the steel into refineries when they went on for recycling. Ultimately, they ended up landfilled.

“So, we focused on finding a way to remove magnets from motors without using low-cost labor, unsafe practices for workers, or dangerous chemicals. We needed an automated process to do this.”

Cyclic works with recyclers, e-scrap facilities, and IT asset disposition (ITAD) businesses, taking whole devices or unwanted components off their hands and paying for the magnets, which undergo a two-step process.

Step one involves separating the hardware into several streams—the magnets—but also copper, aluminum, and steel that are sold to specialty recyclers who further process them.

The magnets are then run through a chemical process to “unmix” the magnetic alloy, returning it to raw materials.

A little further down the line, chemical specialty company Solvay separates the mix to make individual rare earth oxides for specific applications.

“The biggest problem we are trying to solve is the waste of these materials. If we do not recycle them, we need to mine more,” Nee says. Today hundreds of tons of recovered discards run through the process monthly, which should be multiple times that volume by the end of 2024, Nee says. 

“The second challenge we are trying to work through is helping to start magnet production and metal refining in the U.S. and Europe by creating a domestic supply of metals for industries using magnets.”

Microsoft’s Climate Innovation Fund recently invested $3M in Cyclic’s technology to recover rare earth materials from Microsoft hard drives, something that has never been done. Cyclic’s technology separates parts of the hard drives that contain the magnets, unlocking an additional value stream.

“Microsoft is working to achieve zero waste across our direct operations, products, and packaging by 2030. This means adopting a circular economy approach,” says Brandon Middaugh, senior director, Climate Innovation Fund, Microsoft.

“As demand for rare earth elements continues to grow, we’re excited to support the creation of a sustainable supply of these materials with this investment.”

A third-party lifecycle analysis shows Cyclic’s recycled rare earth elements cut CO2 emissions by 63 percent over mining metals. The technology uses less than 5 percent of the water consumed by mining, and uses no land as opposed to mining, which is done in open pits and has been known to contribute to groundwater contamination and other damaging planetary effects.

With the Kingston demo plant off the ground, the team has set out to build full-scale facilities in the same city and will soon start construction in the U.S., followed by further global expansion.

These ventures can be a risk, but one with anticipated payoffs.

“The price of rare earths relative to other metals is more volatile, which makes starting the industry more difficult. But we are focused on building a business at today’s prices, which are at the low end the last couple of years. But we think we can make it viable,” Nee says.

“The real driver now is everyone’s desire for a second source of magnets that has a lower CO2 profile, is domestic, and secure.”