BMW Group’s investment arm BMW i Ventures announced an investment in Cyclic Materials, a Canadian company focused on recycling rare earth elements (REE). Regarding e-mobility, Cyclic Materials already cooperates with Polestar to recover magnets for electric motors.

The $27 million Series A funding was led by BMW i Ventures (BiV) and Energy Impact Partners (EIP). In addition, it included participation from Fifth Wall, Bioindustrial Innovation Canada (BIC), and existing investor Planetary Technologies. Cyclic Materials wants to use the fresh capital to establish a hub and spoke network for its commercial-scale operations.

Founded in 2021, Cyclic Materials is creating a sustainable, domestic supply chain for REE (and other metals like copper, aluminum, steel, cobalt, and nickel) necessary for the energy transition and decarbonization. As global market demand for REEs is forecasted to increase threefold by 2030, establishing new sources of REEs is critical.

“Cyclic Materials’ efficient, proprietary technologies enable them to change the status quo by cost-efficiently recycling these materials from a diverse supply of end-of-life products,” states BMW’s press release. Cyclic Materials is based in Kingston, Ontario, Canada.

Separating magnetic materials

One of these companies is Polestar, which signed a Memorandum of Understanding (MoU) to collaborate in late 2022 to explore ways to recycle existing magnets efficiently. Instead of sourcing raw materials from mines for new drive units, the Swedish Geely brand wants to reclaim all rare earth metals from old motors.

“Polestar approached us with a vision of using 100% recycled materials in its electric traction motors and ensuring that all its cars are recycled at the end of their life,” said Ahmad Ghahreman, CEO of Cyclic Materials.

Sander Jahilo, Circularity Lead at Polestar, added that Cyclic Materials were “unique in the way that they are tapping into materials that have previously been overlooked in the recycling industry due to technical limitations.”

Economic and environmental benefits

REEs are among the least recycled metals due to the difficulty of separating the various magnetic materials in end-of-life products. So, since its inception in 2021, Cyclic Materials has been creating recycling processes for REE and other metals like copper, aluminum, steel, cobalt, and nickel from a diverse supply of end-of-life products.

REE and metal recycling have many economic and environmental benefits over mining, such as a shorter development timeline, lower consumption of reagents and water, reduced waste, and a significantly smaller carbon footprint. While new mines are also necessary to meet projected demand, developing a domestic supply chain of high-quality REEs reduces the need for virgin material.

“REEs are critical for many applications from small electronics to large wind turbines but are very challenging to produce,” said Kasper Sage, Managing Director of BMW i Ventures. “The Cyclic team has developed a novel process to create a sustainable, secondary supply source. We are excited about the company’s plan to scale this technology, helping secure the metals supply chain of the future.”

At the moment, there is little information on the actual processes the company applies other than that it is “proprietary technology”.