BMW and Yamaha Motor have invested in the U.S.-based rare earths processing startup Phoenix Tailings, to enhance the production of rare earth metals outside China, according to Reuters. Rare earths are critical components in a wide range of modern technologies including electric vehicles and smartphones, necessitating innovative solutions to diversify supply chains.

The Massachusetts-based startup secured $43 million in Series B funding, with heavyweights like BMW and Yamaha contributing through their venture capital divisions. Phoenix plans to utilize the funds to construct a $13 million facility in Exeter, New Hampshire, projected to produce 200 metric tons of rare earths annually and slated for completion by June 2025.

IndexBox data shows that the global demand for rare earth elements continues to rise sharply, driven by their extensive application in green technologies and electronics. Despite this surge, the traditional solvent extraction method for refining rare earths remains both costly and environmentally taxing.

Phoenix Tailings offers a potentially groundbreaking solution, claiming that their process can generate rare earths with minimal emissions. The company’s efforts align with the broader Western objective to develop sustainable rare earth processing technologies amidst China’s tightening export restrictions.

Already with contracts surpassing $100 million, Phoenix envisions expanding with larger processing facilities across the United States post the Exeter project and has aspirations of going public within three to five years. CEO Nick Myers emphasized that Phoenix’s non-mining approach differentiates it from competitors like MP Materials and Lynas Rare Earths, which traditionally face challenges against Chinese competition.

With the new funding round, Phoenix intends to accelerate its research, engineering, and business development, as it seeks to capitalize on supportive U.S. policies under President Donald Trump’s administration that favor domestic manufacturing and critical mineral production.

Source: IndexBox Market Intelligence Platform