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BMW and Yamaha Motor Invest in U.S. Rare Earths Startup Phoenix Tailings

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BMW and Yamaha Motor have joined several other investors in backing U.S.-based rare earths processing startup Phoenix Tailings. The $43 million Series B funding round, which closed on December 20, will help Phoenix scale its operations to meet the increasing demand for rare earths outside of China. These metals, crucial for the production of magnets used in electric vehicles, electronics, and other technology, are essential to the transition to clean energy.

Rare earths are primarily refined using the solvent extraction method, which has become outdated in the U.S. due to its environmental costs. Chinese companies have dominated this process for decades, but recent actions by Beijing to limit exports have led to a global scramble for alternative sources and technologies. Phoenix Tailings claims its innovative process can produce rare earths from mined ore or recycled equipment with little to no emissions, offering a cleaner solution to the existing industry standards.

The investment round includes venture capital funds such as Envisioning Partners, MPower, and Escape Velocity, alongside BMW and Yamaha’s venture arms. Phoenix plans to use the funds to build a $13 million facility in Exeter, New Hampshire, scheduled to open by June 2025. The facility will have the capacity to produce 200 metric tons of rare earths annually.

Phoenix has already signed over $100 million in supply contracts but has not disclosed the partners. The company’s plans also include scaling its operations with larger processing plants in the U.S. if the Exeter site proves successful. With 33 employees, Phoenix aims to go public within three to five years.

The company’s approach of focusing on rare earths processing rather than mining sets it apart from competitors such as MP Materials and Lynas Rare Earths. Phoenix is also applying for U.S. government loans and grants to support its growth.

 

China’s Exports Surge by 8.7% in August, Exceeding Expectations

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China’s exports witnessed a significant increase of 8.7% year-on-year in August, surpassing the 6.5% growth predicted by a Reuters poll, according to data from the country’s customs agency. Imports, on the other hand, grew by only 0.5%, falling short of the 2% growth expected. In July, China’s exports rose by 7%, while imports outpaced predictions with a 7.2% increase.

China’s exports to its key trading partners—the U.S., the European Union, and the Association of Southeast Asian Nations (ASEAN)—also showed growth in August, with exports to the EU rising by 13%, the highest among these partners. The U.S. saw a 12% rise in imports from China, while imports from the EU fell. Meanwhile, imports from ASEAN increased by 5%.

In trade with Russia, China’s imports declined by 1%, whereas exports to Russia grew by 10%. The month also saw China’s exports of cars and ships surge by nearly 40%, while smartphone exports rose by 6.7%. Other sectors, like suitcase exports, saw a growth of 9%, and integrated circuits showed an 18% rise in exports, with imports climbing by 11%.

Despite this growth, the rare earths trade exhibited a decline, with rare earth exports falling by 1% and imports dropping by 12% in August. This decrease followed China’s recent policy to increase oversight of its rare earth industry for national security reasons. China also announced export controls on antimony, set to take effect later in September. Additionally, crude oil imports fell by 7% in volume during August.

In yuan terms, year-to-date exports increased by 6.9%, while imports grew by 4.7%. Exports have been a strong point for China amidst ongoing struggles to stimulate domestic demand. However, China faces growing trade tensions with the U.S. and EU, with tariffs on Chinese electric cars and other goods adding pressure.