(Reuters) -Japan’s Sumitomo and impact investment fund Builders Vision have invested in U.S.-based rare earths processing startup Phoenix Tailings, the latest move by manufacturers to boost production of the critical minerals outside of China.
Rare earths are a group of 17 metals used to make magnets that turn power into motion for electric vehicles, cell phones and other electronics.
The existing standard to refine these minerals, known as solvent extraction, is an expensive and dirty process that gradually became unpopular in the United States after it was developed in the 1950s but one that Chinese companies have mastered.
China’s exports of rare earths have ground to a halt, fueling a scramble across the West for replacements. Phoenix says its process can produce rare earths from mined ore or recycled equipment with little to no emissions.
Sumitomo’s Presidio venture arm, along with Builders Vision, Yamaha Motor, and venture capital funds Envisioning Partners, MPower and Escape Velocity, joined a $33 million tranche for Phoenix’s Series B funding round, which closed on April 25, the company said.
Phoenix declined to disclose each investor’s funding.
The company will use the funding as part of its construction of a $13 million facility in Exeter, New Hampshire, that can produce 200 metric tons of rare earths annually initially and should open later this year.
The company last December closed a first tranche of its Series B round worth $43 million, bringing the total round to $76 million.
A $10 million Series A funding round closed in August 2021.
(Reporting by Ernest ScheyderEditing by Marguerita Choy)
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