By Faridat Salifu
Cyclic Materials is partnering with recyclers, waste generators, and scrap yards to help build a North American supply chain for rare earth elements.
The company is targeting used permanent magnets, which are found in a wide range of products and contain valuable rare earth materials.
Over 43,000 tons of permanent magnets are expected to reach end-of-life each year in the United States, yet less than one percent are currently recycled.
Demand for the rare earths inside these magnets is projected to increase sevenfold by 2040, according to the International Energy Agency.
In the absence of a stable domestic supply, countries rely heavily on China, the world’s dominant producer of rare earth magnets.
However, even China’s output from the massive Bayan Obo mining district would need to increase nearly fivefold to meet future global demand, reports Adamas Intelligence.
Cyclic Materials, a Canadian startup, is positioning itself to help address that gap while reducing environmental impacts.
The company collects used magnet-containing materials and processes them into mixed rare earth oxide, which can be reused in new magnets.
Permanent magnets are considered premium-grade, accounting for about 30 percent of global rare earth usage and powering everything from EV motors to MRI machines.
Cyclic’s first commercial facility, a $25 million plant in Kingston, Ontario, is scheduled to begin operations in early 2026.
A second, larger $20 million facility in Mesa, Arizona, will follow and is expected to handle 25,000 tons of material annually.
The Mesa plant will recycle end-of-life components from EVs, e-bikes, robotics, scooters, and medical equipment.
Materials will be sourced through established recycling networks, scrap yards, and industrial waste generators.
Solvay in Europe and Quebec-based Glencore are among early offtakers that will further process the recovered rare earth materials.
“Establishing new sources of critical materials is vital to support electrification of the global economy,” said Ahmad Ghahreman, CEO and co-founder of Cyclic Materials.
He said recycling can meet the needs of key industries like defense, clean energy, and tech manufacturing without depending on new mining.
Kunal Phalpher, the company’s senior vice president of Corporate Development, noted that recycling facilities can be built faster than new mines.
He acknowledged some companies are exploring primary rare earth production in North America, but said permitting and development remain lengthy.
When fully operational, Cyclic’s two plants could offset the need for up to four new rare earth mines, Ghahreman said.
That shift could significantly reduce environmental harm associated with traditional mining, including radioactive waste.
According to the University of Pennsylvania’s Kleinman Center for Energy Policy, each ton of mined rare earths typically generates about one ton of radioactive waste.
Permanent magnets also offer performance benefits in electric motors, converting more than 85 percent of electrical energy into motion, compared to less than 40 percent for gas engines.
Cyclic employs a two-step process to recover rare earths, starting with mechanical separation of motor components, known as the “spoke” phase.
The “hub” phase involves chemical refining to produce mixed rare earth oxide suitable for use in new magnets.
Auto manufacturers, defense agencies, and high-tech firms are watching supply trends closely as tariffs and resource shortages create uncertainty.
Lime Micromobility, which operates a fleet of over 270,000 e-bikes and scooters, is among Cyclic’s newest suppliers.
Lime will send decommissioned motors to Cyclic, expected to yield at least 500 tons of recoverable materials annually.
The partnership supports Lime’s target of net-zero emissions by 2030 and its push for circular business practices.
“Cyclic Materials will help us recover rare earth magnets from end-of-life motors and reinject those critical materials back into the supply chain,” said Andrew Savage, vice president of Sustainability at Lime.
He said the collaboration will help reduce reliance on virgin materials and cut emissions from raw material extraction.
Cyclic executives say the magnet supply crunch echoes past bottlenecks in battery recycling and rare metal access.
“Companies are looking at how they can have less volatility and a more secure supply chain,” said Phalpher.
He added that specialized recyclers are seeing new challenges, including more complex electrical components that traditional scrap partners can’t handle.
As electrification expands, Cyclic aims to fill those supply chain gaps and scale operations to meet surging demand.
Ghahreman believes companies like Cyclic have the capacity to meet rare earth needs while reducing foreign dependence.
“And this will reduce our dependence on foreign sources and foster a resilient supply chain domestically,” he said.
