May 11, 2023

The Kingston Ont.-based rare earth elements recycler will use the funding to scale up its capacity, creating a hub-and-spoke network for commercial operations Cyclic Materials, a Kingston, Ont.-based advanced metals recycling startup, has raised $27 million in series A funding to begin commercialization of its plans to create a circular supply chain for rare earth elements (REE) and critical materials in Canada. BMW Group’s venture capital arm, BMW i Ventures (BiV), along with Energy Impact Partners led the funding round last month. “We are an early-stage company. We have been working hard on this funding and this has been one of the major milestones for us,” says Ahmad Ghahreman, CEO of Cyclic Materials, in an interview with Electric Autonomy. In 2021, Cyclic Materials began developing a recycling process for rare earth permanent magnets. Its proprietary technology enables it to reclaim raw materials to be fed back into the supply chains of electric vehicles and other renewable technologies. The new funding will enable Cyclic to move beyond its existing pilot plant phase and establish a hub-and-spoke model for commercial-scale operations in Kingston by the end of 2026. Earlier this year, Cyclic also received $3.6 million in federal funding through the Sustainable Development Technology Canada Foundation. To date, the company has raised over $30 million in capital investments. BMW’s recycling interest aligns Cyclic’s involvement with the BMW Group marks its second relationship with a major global automaker. Last December, Polestar chose Cyclic to build a closed-loop recycling pathway for REEs for the Swedish automaker’s future vehicles. What’s particularly noteworthy about BMW is its strong focus on recyclability. The automaker has previously said that the aim of its recycling philosophy is to efficiently reclaim resources and materials from vehicles to minimize resource use. In March, the company’s chief financial officer, Nicholas Peter, reiterated this view in an interview with Reuters, stressing that BMW is prioritizing recycling over investments in mining. At present, BMW Group currently manufactures around 30 per cent of its vehicles using recycled and reused materials. Rare earth elements are essential components of electric vehicle motors, but they are among the least recyclable metals. This is because of the difficulty in separating various magnetic materials in end-of-life products. As a result, the majority of REEs end up in landfills, says Cyclic’s Ghahreman. Through its recycling technology, Cyclic Materials aims to develop a domestic supply chain of high-quality REEs. While seeking out investors, Cyclic found its goals aligned with BMW’s. “We started communication with BMW several months ago. We share the same idea that [REEs] are really too important — too valuable — to go to waste. That is the backbone of how we built a relationship with BMW,” says Ghahreman. “The vision is that [BMW] would also love to be a part of this story of recycling these critical rare earth elements, so that industry, as a whole, could use [them] again in the materials that they produce and put into the new cars and new applications.” In an email to Electric Autonomy, a BMW spokesperson declined to speculate on where this investment in Cyclic might lead. They state that BMW i Ventures (BiV) makes investments independently of BMW Group. “[A] relationship with BiV does not necessarily indicate a larger relationship with the parent company,” says the spokesperson. Cyclic’s scale-up of hub-and-spoke model Cyclic’s planned production model consists of a two-step process for recycling rare earth elements from magnets. It begins at a spoke plant where magnets from end of life products are separated. The material is then moved to a hub facility. There, Cyclic’s chemical hydrometallurgical process is used to produce raw materials for making new magnets. The end product sold back into the market is recycled mixed rare earth oxides (rMREO). The process will also enable Cyclic to recycle copper, aluminum, steel, cobalt and nickel. Over the last year, Cyclic has made significant progress towards commercializing this model. It is piloting its hydrometallurgical technology, distributing REE samples to potential clients, and securing an international supply chain agreement for its rMREO materials with Solvay , a French chemical company. Now, with the latest cash infusion, Cyclic needs to complete one more pilot to test out the proprietary technology that the company has developed to remove the magnets from the end-of-life products at its spoke facility in Kingston. This testing is crucial in order for the magnets to move on to the hydrometallurgical stage of the process. The startup is also looking to build a hub facility in Kingston, where Cylic will produce rMREO materials. The hub is expected to be fully operational by 2025-2026. Beyond 2025, Cyclic plans to invest heavily in growing its operations in North America, Europe, and Asia in the coming years, says Ghahreman.