A US$53-million Series B fundraise (approximately C$71.8 million) will set the stage for the expansion of Toronto-based Cyclic Materials’ rare earth metals recycling infrastructure into the U.S. and Europe.

The company’s technology can recover rare earth metals (neodymium for example) and other valuable metals (copper, aluminum and steel) from the magnets inside vehicle motors, wind turbines, MRI machines and hard drives.

The goal is to promote a circular economy and build a domestic supply chain, Cyclic’s senior vice-president of corporate development Kunal Phalpher told Sustainable Biz Canada in an interview.

Such metals are crucial to the clean energy transition, used to make power-generating technologies like wind turbines and solar panels, electric vehicles, and the batteries that store clean energy.

Having commercial demonstration facilities in Kingston, Ont. but none yet ready for commercialization in Canada, the recent fundraise means “now we have the capital to do what we’ve been talking about,” Phalpher said, referring to plans for expansion and commercial sites.

The fundraise was led by Toronto-based clean energy venture capital firm ArcTern Ventures, with involvement from existing investors Fifth Wall, BMW i Ventures, Energy Impact Partners and Planetary Technologies, and new supporters BDC Capital’s Climate Tech Fund, Hitachi Ventures, Zero Infinity Partners, Climate Investment, and Microsoft’s Climate Innovation Fund. 

In an August interview with Sustainable Biz Canada, Phalpher previewed the fundraise. 

Overseas expansion, more hiring

Though specific locations are not yet finalized, according to the Cyclic senior vice-president, the key factors will be whether the facilities are close to feedstock sources, the logistics, population size and if there are incentive programs.

The international facilities would operate the two technologies the company has developed: Mag-Cycle, which shreds the electronics; and REEPure, that refines the rare earth metals from the processed electronics into a chemical raw product such as mixed rare earth oxides or cobalt-nickel hydroxides.

A commercial-scale facility that performs the shredding of electronics using Mag-Cycle is aimed at being scalable up to 25,000 tonnes of material processed per year, Phalpher said.

By using Mag-Cycle and REEPure, environmental harm is minimized as recycling uses less carbon, energy and water compared to mining for more metals, the company says.

The Series B fundraise prioritizes capital on Mag-Cycle, with REEPure being a longer-term goal.

As sites are still being chosen, Phalpher could not disclose a timeline for when projects could be completed. But he is optimistic that “we’re not gonna take 10 years to build these,” saying the public should expect the facilities to be finished in 18 to 24 months.

To bolster its anticipated growth, more engineers and operations staff will be hired. Cyclic already has over 10 positions opened, Phalpher mentioned.

He said to expect a “flurry” of activity in November as it deploys the funds.

The oversubscribed fundraise, Phalpher noted, is mostly comprised of previous investors that were participants in the $27-million Series A round in April 2023.

“Microsoft obviously runs a lot of data centres and have a net-zero plan so they’re very interested in such technology. Hitachi makes all sorts of machinery and also MRIs, so they have an interest in this circular economy space.”

Circling back to Canada

When asked why Cyclic is not prioritizing Canada to host its full-scale facilities, Phalpher cited the smaller Canadian population as a reason.

“Material is also driven by population, and (Canada) is a smaller country. Bit more materials somewhere else.”

But that is not to say Canada will never house such projects. Though it only has commercial demonstration sites in Canada, Cyclic is discussing the next phase of scale-up in Canada, Phalpher said. The Kingston pilot facilities can be adjusted to meet higher demand.