US based Phoenix Tailings has attracted investment from BMW and Yamaha Motor as part of a US$43M Series B funding round. The company plans to construct a US$13M facility in New Hampshire, USA, aiming to commence operations by June 2025.

Rare earths elements such as neodymium (Nd) and dysprosium (Dy) form key components of electric motors and generators enabling energy transition, energy efficiency, and advanced technologies. Over the coming years, the supply demand balance for Dy and Nd will fluctuate widely based on mining for heavy rare earth elements (HREE) such as Dy in Myanmar, leading to volatility in future prices. Myanmar is expected to remain a crucial source for Dy compounds, with more than 40% of global supply forecast to be extracted from Myanmar over the next few years.

Away from rare earths, several other supply chains such as gallium and germanium have been shocked by the introduction of stringent export regulations by China. While rare earth elements are not impacted by recent trade restrictions beyond those falling within military-related dual-use regulations, supply chains for electric motors outside of China will need to evaluate future risks to existing status quo sources of rare earth products and components containing them.

BMW previously opted to use non-rare-earth-bearing motors in its EVs, however, as with all automotive OEMs, a switch to using rare earth permanent magnet motors allows an improvement in motor efficiency, particularly in urban driving settings.  Improved efficiencies translate to a reduced battery cost when equivalent driving ranges are considered, as well as to higher performance. Future access to feedstock will be key for rare earths markets, as volatile prices present a difficult financing environment for the successful commissioning of rare earth projects. Phoenix Tailings is looking to target mine tailings to circumvent some of the high investment CAPEX required for a new mine and compete for the required diversification of rare earth sources to the industry.