June 11th 2020 – Jim Vinoski – FORBES
Recycling is one often-overlooked facet of the opportunities to break China’s current overwhelming dominance of the market for rare earth elements (REEs) and their manufactured end products. With REEs having been incorporated into everything from industrial magnets to computer hard drives for decades now, there’s a huge supply of recyclable materials on offer. They could help put a serious dent in demand for newly extracted minerals, as well as the finished goods made from them, from China.
One company in the thick of those efforts is Urban Mining Company (UMC) of San Marcos, Texas. They raised $25 million in a Series A funding round in June 2016, and have since been scaling up their processes for recovering REEs from electronic waste, then manufacturing new magnets from the recycled metals. “UMC set out to figure out an alternative or substitute to change the dynamic of [REE] supply chain risk,” said Scott Dunn, the company’s CEO. “That resulted in a process to use waste material as an abundant source for magnet raw materials.”
One of the most significant challenges in establishing alternative sources for REEs is price. China has heavily subsidized their producers in the sector, putting other producers across the world at a market disadvantage. But recycling can help overcome that “thumb on the scales.” “We have a significant cost advantage,” Dunn pointed out, “and a source that’s domestic and decentralized.”
That could help overcome the headwinds. But the reality is that the bigger challenge is simply the near-absence of U.S. producers for the manufactured REE products that high-tech and defense companies need. Dunn sees advantages there. “We’re just better magnet manufacturers,” he said. “Our magnets give better overall performance, and they’re better for high-temperature applications–things like servos, linear motors, robotics and electric vehicles (EVs).”
UMC is in full-scale magnet production. “We built a facility in San Marcos that can produce thousands of tons of magnets per year,” said Dunn. “And we have an additional 90 acres of land there for expansion. It’s a complete magnet manufacturing process. We’ve produced magnets for defense and commercial applications including for new DC power trains, using recycled materials from hard disc drives, MRI’s, and 15-year-old HEVs.”