PHOENIX TAILINGS: Engineering Innovation to Meet Demand with Domestic Supply

From a global innovation city behind so many modern startups, Cambridge Massachusetts-founded Phoenix Tailings is growing quickly as it takes steps on its journey towards being the world’s most sustainable precious metals business. Perhaps it’s the proximity to Harvard University or Massachusetts Institute of Technology, or maybe there is something in the water, but from here innovation thrives.

Established in 2019 by an ambitious group of founders, Phoenix Tailings is scaling fast. Core services include the production of rare earth metals from mining waste. It’s a treasure from trash story, and CEO Nicholas Myers tells Energy Focus that it has been tough ride. Sticking to the mission has been essential in a fluid startup environment as the business has journeyed through innovation and funding rounds, desperate to get its pioneering ideas out of the ground.

“It was a personal challenge – I was competing against people twice my age with twice the experience and I had to be better and more knowledgeable – that is tough, double the work in half the time,” he says.

A physics graduate of the University of Vermont, and a MBA holder from Northeastern, this busy US entrepreneur is no stranger to the startup world. He worked in manufacturing for 10 years before switching focus to finance. In the banking space, he realised his passion was for young, agile businesses with fresh ideas, but to achieve his own goal of significant impact, he knew he must start his own business to tackle a long-standing issue.

“Things have gone well, we have a lot to do yet, but it has been successful so far,” he smiles.

NEW IDEA NEEDED

A chance meeting with his Co-founder, Dr Thomas Villalón, led to the discussion around what Myers calls ‘the big problems in the world today’.

“As we shift away from fossil fuels, we are not moving away from natural resources – we are shifting to using more specialty metals that have never been heard of before – neodymium, praseodymium, dysprosium, terbium, lithium, cobalt etc. We realised we needed to find a way around the challenge of accessing these materials because the way we do it today is very hazardous, toxic, and detrimental to the environment – but we need these materials,” says the CEO.

He adds that the discussion ended up pinpointing sustainability as an overlooked key focus area. If a business could be based around sustainability, with a moral and ethical culture running through its core, then it could potentially catalyse change globally.

Rare earth metals are used in almost all high-end technologies – computers, phones, chips etc. 17 metals make up the classification, and they can be worth around £4000 per kg. But the majority of the supply comes from China.

“We said instead of destroying a new mountainside or community to access the materials, harvesting them in a toxic way, we should go after the waste that our ancestors already produced and harvest that – cleaning that up while creating raw materials from that waste. It’s sitting there, we just need to process it in the right way,” says Myers.

Taking the waste from mining or quarrying operations – often dumped in landfill, labelled tailings ponds – and refining to extract valuable mineral deposits left behind after traditional processing is where the company is built strong. These materials are often rare earth minerals used across multiple consumer and industrial applications.

Some estimates suggest that mining produces 84 billion tons of hazardous waste material annually, with land, water, and air all included in the fallout.

Myers, Thomas Villalón (CTO), Michelle Chao (COO), and Anthony Balladon (VP Partnerships) Co-founded the business, building the first prototype in a backyard in Cambridge, Massachusetts with help of the University of Connecticut’s Wolff New Venture competition which Phoenix Tailings won a $20,000 prize fund to invest in proprietary technology.

“Initially, we were processing bauxite residue as a by-product from alumina production, pulling out a little bit of iron and other rare earth metals that are needed to power wind energy and electric vehicles. We moved away from bauxite residue, although we do still work with some bauxite tailings, and we now focus on iron ore, nickel, copper, and other tailings. Our mission is to be the world’s first fully clean metals and mining company, with zero waste, zero carbon emissions, entirely sustainable all the way through.”

The popularity of this idea, and the culture developed by the leadership team was clearly appealing to investors. Funding from the National Science Foundation helped Phoenix Tailings to expand to aa point where it could talk to corporate clients and understand their needs. A capital raise through pre-seed investment firm Techstars in 2020 helped achieve further scale.

SOLD OUT

In January, the company officially announced the start of commercial scale refining of critical rare earth metals – a first for the USA. Product viability was proven through the pilot stage and world-class R&D is helping to meet growing demand.

“At Phoenix Tailings, we are solving this critical gap with our technology in order to reduce America’s dependence on foreign governments. That’s one of the reasons we are so excited about the commercial production capacity at our facility,” says Myers.

Demonstrating the hunger in the market, he highlights that the company had sold its entire 2023 neodymium production by the end of January. Currently selling heavily in Europe, capitalising on the booming EV market, Phoenix Tailings is busy planning for new products. “Processing is where we are the best in the world,” smiles Myers.

“European auto manufacturers are key clients, but we are also looking to scale up our market in the USA. We know of a few specialist producers that are starting up here, and we are looking to supply them in the near future,” he suggests. “We started off with neodymium metal cells which is a commodity-based product and we are shifting, because of the deposits that we have, into terbium and dysprosium. Terbium in particular will be one of the major metals that we will offtake as it is key as almost 100% of supply comes from China today.”

The challenges in this fast-growth sector surround the supply chain. Here, there has been a need for constant review and micromanagement, with Myers praising the leadership team for developing a robust system from the ground up. To process at scale, valuable inputs are needed, and this requires planning. “Sourcing materials can be a challenge,” he admits. “We are sometimes looking at between six weeks and six months for certain chemicals. In a start up environment, that is an eternity. The company will be totally different in six months. Our supply chain is really helpful in that, and we have been deliberate in the way we source and procure.”

BUILDING BRAND

By partnering with the very best across all disciplines, the company’s reputation is growing. In 2022, Phoenix Tailings received $1.2 million from the US Department of Energy as part of the Advanced Research Projects Agency-Energy Mining Innovations for Negative Emissions Resource Recovery program. The funding is powering pioneering innovation within the business and Myers hopes more will be encouraged to enter the market.

“Innovation is important in critical minerals production, and moving fast and scaling up in the right way is absolutely essential,” he explains. “Rare earth processing is a big gap in the world today and that is what we are honing in on but we do need others in the market – it can’t just be us. Working with the right players and partners is vital in growth.

“There will be others that come to the market, but the key is to do it sustainably and that is our mission. We want to make sure that by being the first ones to do it, and doing it in a sustainable way, others will come in with sustainability in mind.”

If the company can continue on its strong growth path, and the industry can follow while opening up fresh opportunities for US-businesses, Myers and Phoenix Tailings will be on track to achieve visions. His advice for others is to remain, or learn to be, versatile.

“My whole mission in life has been to build a technology company that can have a deep impact across the world at a fundamental level,” he smiles. “I would certainly recommend that every executive takes some time at some point to work in a startup environment as it allows for a different way of thinking, without the imagined barriers and structures that have been perceived to exist before. With that, we would see a lot of change.”

Perhaps it’s the pioneering nature in the region. Perhaps its in the water. What we know for sure is that with Phoenix Tailings it is what has already been taken from the ground that brings progress. Sustainable engineering and reimagination of existing processes will help to design the companies and industries of the future.

“A reliable, sustainable domestic supply chain of critical materials that power longer-lasting batteries and other next-generation energy technologies is crucial to reaching our clean energy future,” said US Secretary of Energy Jennifer M. Granholm.