Episode 94: Ahmad Ghahreman: Recycling rare-earth metals, America's only back-up plan

Molly Wood Voice-Over: Welcome to Everybody in the Pool, the podcast where we dive deep into the innovative solutions and the brilliant minds who are tackling the climate crisis head-on. I'm Molly Wood. 

This week let’s dig into a technology with big environmental implications and a whole lot of geopolitical ones also. We’re going to talk about recycling rare earth metals that are used to make magnets that are part of electric motors and wind turbines, on the clean tech side, but also kind of everything else electronic, including things like laser guidance systems, missiles, and jet engines on the military side. 

These are a big deal China controls pretty much the entire market and since April China has stopped almost ALL shipments of seven rare earth metals AND batteries made from them. The US currently has pretty much no backup plan. 

But on top of the applications for some really important clean technologies the actual mining and separation and then of course transportation of these metals is extremely environmentally damaging and emissions-producing. 

And currently less than one percent of rare earth metals are recycled meaning there’s a big deposit of these metals sitting around in dead electronics of all sorts. Enter today’s guest. 

Ahmad Ghahreman

My name is Ahmad Ghahreman. I am the CEO and co-founder of Cyclic Materials. 

Cyclic Materials is a clean tech startup on the circularity side of companies with focus on recycling of the most critical metals that we know of in our planet. Those are called rare earth elements. Those metals often are used in magnets to make really strong magnets and those magnets are put into electric motors to make really efficient electric motors and we do recycle those ones for the metal values in those products.

Molly Wood 

Great, I'm gonna ask you to tell us a little more about the problem and why this is so necessary in a minute. But first of all, how did you come to be doing this? What is your background?

Ahmad Ghahreman 

Thanks.

Ahmad Ghahreman 

Oh, I am a technical person by training. Did my PhD on hydrometallurgy at the University of British Columbia in Vancouver, BC. Hydrometallurgy is a fancy word for a chemical extraction of metals, how to make metals. So I did that for a few years. Then after that, worked for a gold mining company at the time, largest gold mining company in the world. My job actually was quite interesting. I used to fly to different mine sites and projects of that company to find problems in those operations and come back to the metallurgy lab, to the technical lab and solve those problems. And it's amazing, half a percent increase in gold recovery in a mine is 20, 30 million, 40 million dollars cashflow a year. that's, I reference it as my second PhD, although it was job, it was not a university.

Molly Wood

Thanks

Ahmad Ghahreman 

After that I joined Queens University in Kingston, Ontario, Canada as a professor. I actually did build largest and most funded research team on extraction of metals. So you can see a lot of technical background in years and 10, 15 years of my last basically timeline. And then with that knowledge in 2021, I came to learn and realize that recycling of rare earth elements is going to be a next bottleneck in our industry and I stepped away from university and started Cyclic Materials. Throughout those years I created multiple other technologies. Some of them are at the core of some of the really nice startups today. One in copper side, another one on lithium-ion battery recycling side and on some other industries as well.

But I'm going to say cyclic materials is my finest work yet.

Molly Wood 

Amazing. So what was it that you saw that made you realize that this was going to be a growth industry and a necessary climate action?

Ahmad Ghahreman 

Oh, I will give you a little bit of story in there. So in 2017, while I was helping a different company in one of the conversations, and back then I was a professor in university. So someone in a car manufacturing company told me that the rare earth elements in the electric motors of EVs, electric cars, electric vehicles is becoming a bottleneck.

Molly Wood 

Mm-hmm.

Ahmad Ghahreman

They asked me, am I focusing my research on that? And my response was no at the time. But that question stayed with me until 2020, 2021. Two things I observed in 2021, electrification was not up for vote anymore. People were actually buying electric vehicles in large numbers and the penetration of electrification into our society was substantial. The second one, unfortunately, was that rare earth elements. Among the most critical metals that we know of, were recycled less than 1%. That made rare earth elements most critical and least circular metals. And, and,

So I had dedicated my past 10, 15 years of life on making different metals more environmentally sustainable. And then I had discovered that the earth's elements are just opposite to that. And that was the moment I decided to start cyclic materials and untangle all the challenges with the space.

Molly Wood 

Right. So you're describing this kind of unfortunate double whammy, which is that if we want to create a more sustainable electrified future, we need these metals. They're hard to come by and already expensive. And then on top of that, the way that we are using them and disposing of them is itself not environmentally friendly.

Ahmad Ghahreman

100 % yes, so these metals all the way come from

Majority of them, the magnets are produced in China, all the way from China, they come to North America in different products, we consume them. And the mining of these metals, critical metals, is one of the highest carbon metals out there. So mining of these carbon critical metals is really comes with large carbon footprint. And here we consume those and at the end of the day, the products go into landfills instead of being responsibly recycled. And that just adds to the problems with those metals.

Molly Wood 

And then just so people know, specify for us which metals we're talking about.

Ahmad Ghahreman 

Okay, so rare earth elements are 15 elements. You can graduate your high school and not learn about them, by the way. So they sit at the bottom of periodic table, but not all 15 of them are used in magnets. Four or five of them basically are critical in magnets. And the names are a little bit difficult, but I'm going to try to tell you the names. Neodymium, Praseodymium.

then dysprosium, terbium and samarium. Those five rare earths elements are the ones that we often see in magnets, rare earths magnets, to make the most strong magnets.

Molly Wood

And you're talking about magnets and electric motors and not so much batteries. I feel like people, when they think about the rare earth metals conversation, they're thinking about lithium and cobalt and batteries. And you're operating in a different space. Mm-hmm.

Ahmad Ghahreman 

Correct. So the battery in an electric vehicle, let's say, or in a power tool, would sort the electricity for you and the electric motor would drive the car or basically would be the mechanical energy that it produces. So we focus on recycling of electric motors and everything and anything that has magnet in it. In opposed to lithium ion batteries, we do not touch or recycle batteries in our company.

Molly Wood 

And so are the metals that you're the mineral, the elements, do you call them minerals, metals or elements? Like I'm using them all interchangeably, but I have a feeling there's a difference and you're big on that difference.

Ahmad Ghahreman 

There are differences, absolutely. So metals. Metals are the form of, we find those elements, all of them are elements, of course, so that's correct as well. Minerals, we call them minerals when they are still in the ground. So that's when we call them minerals, usually in the form of oxides, sulfide, different things. And then we clean them, purify them to clean high quality metal and then use them in different industries. In a magnet, they are in metal form.

Molly Wood 

Great, okay. So many people I think have heard about trying to recover lithium, nickel, cobalt, other metals from batteries. Are the metals that you're talking about, the EMS, I'm just gonna call them the five Ms, even more rare?

Ahmad Ghahreman 

Rare earth elements are not rare. But mining of rare earth elements, you don't see that very often in different countries. There are good reasons for that. It happens that rare earth elements form smaller deposits, smaller mines. So because of the size, when you put the capital cost to develop that mine, then...

Molly Wood

Got it.

Ahmad Ghahreman

it just economically doesn't make sense to spend that capital on a small deposit. Or sometimes rare earth deposits are really deep in the ground. So bringing that resource up to the surface and then processing that is expensive. So that doesn't make sense again. Or sometimes rare earth elements come hand in hand, really good friends with uranium and thorium. Those are radioactive metals. The challenge with those metals is that when you mine rare earth elements and you're

Molly Wood 

Okay.

Ahmad Ghahreman 

uranium and thorium come along with them, their composition or concentration or how much of that you have is too high that makes environmental problem, but too little that economically not viable to extract those. So combination of those challenges makes a lot of rare earth deposits in the world not being economically or environmentally viable. That's why we have a concentration of those mines and some jurisdictions.

Molly Wood

I see.

Molly Wood 

Got it. Will the economics get better? We are going to talk about recycling, I promise. I just like to understand the entire landscape first. Is there an assumption that the economics will become more favorable as there is more adoption of electric motors of all sizes? Or will it just always be really hard and expensive and damaging?

Ahmad Ghahreman 

mining of critical metals is getting better every day. So we are getting better on environmental side, we are getting better on how much we spend on, basically technology comes to rescue. And that's true for rare earth elements as well. The adaptation of newer technologies always improves the environmental footprint and cost of production of critical metals. And rare earth elements are no exception in there. I'm optimistic by nature, but in this case,

Molly Wood

Got it.

Ahmad Ghahreman 

Much more confident that the cost will eventually will come a bit lower for those metals. Those are by the way really expensive metals I can give you some some numbers in there Neodymium, Praseodymium are around $70,000 a ton Yeah the Dysprosium if I'm not mistaken is around $350,000 a ton and Terbium is about $1 million a ton. So those are really expensive metals

Molly Wood 

Please.

Molly Wood 

And that is because it is so hard to mine them and extract them. I mean, it's just sort of, that's just what it costs to get them out and process them and all of that. Wow. We should totally recycle those is what I'm thinking. Yep.

Ahmad Ghahreman

Right, and the other reason is the 15. Absolutely, 100%. Well, you know, so 15 rare earth elements, usually it happens that in the deposits out there in mining, majority of those 15.

are the rare earths elements that we don't use in magnets. And tiny, tiny, tiny, tiny fraction of those 15, percentage-wise, are those four rare earths elements that I mentioned. And terbium and dysprosium happens to be really a small fraction of those deposits. And those have something to do with the cost of those products versus how much of those we need in the market.

Molly Wood 

And then can we make magnets without those? I feel like you're a person who examined a lot of possible solutions, including the potential for alternatives to these metals, right?

Ahmad Ghahreman 

yeah.

Ahmad Ghahreman 

If we can find ways not to use rare earths elements in magnets, we should do that. This is counterintuitive because my company recycles magnet, rare earths magnets, but it's true. So there are four different kinds of magnets out there. The first one is, two of them are rare earths magnets. The first one is neodymium magnet, the second one is samarium magnet. The other two, they don't have rare earths elements in them.

Aluminum Nickel Cobalt Magnets and Ferrite Magnet. Most of the magnets that probably we see in everyday life around the fridge door magnet and all that are ferrite magnets. Ferrite magnet is iron oxide. doesn't have the earth's elements in them. The challenge is the magnetism, how powerful the magnetic field around those ferrite magnets are, are not adequate to make high efficiency electric motors with them. So when you need a large power density from your magnet in an electric motor, then using reverse magnets becomes the only way that we know of in our industry today.

Molly Wood Voice-Over: Time for a quick break before we get there I will note that since we taped this interview a British firm announced that it had used AI to speed up materials discovery and in three months figured out how to create magnets that use no rare earth metals at all and has developed and tested prototypes with a British-based university. I’ll give them a call as they get a little further down the line but the story will be available in the newsletter this week.  

Ok When we come back, we’ll dig into the actual technology and why we’re at a tipping point where the need for more and more and more magnets is only increasing the need to recycle these metals. 

Molly Wood Voice-Over: Welcome back to Everybody in the Pool. We’re talking with Ahmad Ghahreman of Cyclic Materials. Let’s talk timing 

Molly Wood 

I'm so glad that we have walked through kind of all of these options because it perfectly illustrates why you landed on the solution that you landed on, which let's now talk about, which is recycling these metals. any, you said less than 1 % is recycled. Does that mean because the techniques didn't exist, it wasn't, know, did you invent a new technique for this, I guess is what I'm asking you. Yeah.

Ahmad Ghahreman 

We did, yes, absolutely. But why this didn't happen earlier? We didn't consume much magnet in the past. We did consume quite a bit, but not as much as we do today and absolutely not as much as what we're going to consume in 10 years from now. The adaptation of electrification in different countries and cities and decarbonization have been a force for consumption of more magnets. We are consuming products today in our life that we didn't use in the past.

For instance, e-bikes, e-scooters, our phones, every one of them, and those cameras, tiny, tiny, tiny little magnet that moves front and back, moves the lens front and back. The vibration in the phone, that electric motor. Every single hard disk drive in the corner has a magnet. And when you send an email, it goes through data center, it goes through clouds, it goes through those hard disk drives.

I reference clouds are made of magnet because of those hard drives So so we consume more and more magnets in our life We do have a pie chart in our company that for every new Application area for magnet we do add a new color in there and Every few months we get to add a new color because new thing comes out that consumes magnet and that pie chart is really colorful now

For instance, robots. In 2040, there will be around 9 billion people on our planet. We will have more than 15 billion robots on our planet. Every robot in the arms that moves and does something, moves around tanks. They are because of electric motors and electric motors consume various magnets to do so efficiently. So you can see where we are going. We will be consuming large amount of magnets in our current

Molly Wood 

Wow. Mm-hmm.

Ahmad Ghahreman 

and future world. That's why recycling of these metals become really important and that was the reason we started Cyclic Materials.

Molly Wood 

Yeah. Okay. How do you do it? Roughly. At a high level. Explain it to me. Not like five, but maybe like 11. Like I'm 11 years old.

Ahmad Ghahreman 

Okay, so...

Sure, we'll do that, we'll do that, we'll do that. those products already with Magnet end of life products, we already collect them in the market and do something with them. Some of them would go to landfill, some other goes for recovering of.

other base metals like copper, steel, aluminum, the metals that we know of a bit more. Let's make some examples of those electric motors or other products. MRIs, those are medical devices. Generator of wind turbines.

they have substantial amount of magnet in many cases. Hard disk drives, I made an example, electric motors. The list really keeps going on. Those products as a whole would come to our company and in our first unit operation, which we called it spoke plant, we have a spoke and hub model. In our spoke plant, we would reduce those products, end of life products. We would reduce the size and we would get them to copper, aluminum, seal and magnet. And then

Ahmad Ghahreman 

A magnet would go to our hub or second technology or second plant and there it would become the raw materials. We would produce the raw materials that you would need to manufacture fresh magnets or other products that you would need to use rare earth elements. Magnets are big market for rare earths, but we use rare earths elements in catalysts and on screens, on our phones, computers, screens, many other applications. So let's application points for them.

We produce raw materials and sell it in the market. Market will decide what to do with those rare earth metals in the market basically. Does that explain enough? Okay.

Molly Wood 

And yeah, no, no, that perfect actually. And then are you the metals that you're extracting, are they, I have heard this said before about other metal recycling techniques that you effectively get the same material. Like, are they just as good as when they started?

Ahmad Ghahreman 

Yes, absolutely. From a chemistry point of view, you can't change atoms. Atoms are atoms are atoms. So they are the same. But there are two different kinds of recycling processes out there in the industry. And we are one of them and definitely not the other one. So some people would recycle magnet to magnet. And we do recycle magnet all the way to the ingredients of magnet. To crystallize this, sometimes I use the example, let's say we are recycling a pizza. Some companies recycle from pizza to the dough. They can now make whatever they want with the dough, but the dough will taste a little bit like pepperoni pizza that they started with. In our case, we go from pizza to flour, to salt, to pepper, to the ingredients. So we'll give you something that you can do, whatever. You can make a pumpkin pie with it tomorrow and not taste pepperoni in it.

Molly Wood 

What is hard about that? Because I'm assuming you're trying to produce a product that's economically superior to mined metals. What are the technical challenges that make this difficult? Describing taking apart a pizza like that sounds pretty hard.

Ahmad Ghahreman 

yeah, absolutely. So I can tell you Rare Earth Magnets, as I explained earlier, are really strong magnets. Now, they really like to...

Molly Wood 

I have to say that I'm just like picturing sort of a cartoon situation where your magnet is just getting stuck to everything and it's just super irritating and trying to keep it away from the walls and it's kind of like that.

Ahmad Ghahreman 

That is the case actually. So magnets and steel love one another, so they attach to one another. So really now, what is hard about it? Separating the two, magnet and steel, iron. So that's really hard about it. But there are a lot of other technical key details in our process overall in the spoken hop.

For instance, we are a recycling company. We will be in the vicinity of cities. So we have been hyper-focused on delivering a technology that is number one, absolutely environmentally friendly and consumes minimum possible water. For instance, I will give you two saps from our LCA, which is actually iso-audited as well.

Our process at this scale today consumes only 5 % of the water that mining industry would consume to produce equal amount of equal product, 5%. That's a significant reduction in water consumption. Our carbon footprint today sits at around 65 % less than mining industry. And we have another good room in there to significantly drop that in our next iteration of the process. So those are some of the things that we are dealing not having base from our processes and other things, recycling majority of the material contained in the live products responsibly, and making it available locally. Remember at the beginning I said these magnets mostly are available in China. Now we are creating a source of those magnets for companies that would like to have a second supply chain source for those critical metals. And we will be that, we will provide them that metal. So there are a lot of things to online to make this a success. And of course, logistics because we do recycle in the fly products and in the fly products overall come with really large entropy. They are all over the planet.

Ahmad Ghahreman 

consumed by people and accumulated in larger cities. And it's part of our business on how to access to those end of life products, efficiently process those and sell the products in the market.

Molly Wood

And is that partly why the... I don't want to get too into the weeds, but is that partly why the hub and spoke model works? Because you're sort of able to decentralize the locations so that you're not creating a super long and super unwieldy and climate intensive supply chain? Okay.

Ahmad Ghahreman 

said yes. So we wanted to be closer to the supply source and to be able to do so we needed smaller units of operations called spoke that can be in the vicinity of those supply sources to bring in the feedstock with minimum cost and effort process and supply our hub with maintenance.

Molly Wood 

And I would imagine that in addition to the environmental benefits and the availability benefits and the supply chain benefits, you now are able to make a pretty strong sort of geopolitical argument also, right? mean, this is people are, we're talking about annexing Greenland for reasons like this.

Ahmad Ghahreman 

You. True, true, true. So geopolitics has always been part of rare earth elements conversation and for a good reason, right? So China is supplying the world with 93 % of the magnets. Every single company, it's supply chain 101. You don't want 100 % of your supply chain to be attached to one provider. You want to diversify so that the risk is less. From that perspective, absolutely. We will have feedstock available locally. will produce in North America, sell it in North America. We will produce in Europe, sell it in Europe, and Asia X China, and sell it in Asia X China. So that's the objective in the company. And that has been one of the reasons that we have started conversation with a lot of companies. And the cap table, probably we have one of the most amazing cap tables of any recycling company out there. And that's for a good reason, because...

The likes of investors in our cap table are aware of the value of these metals for their businesses. have BMW, we have Microsoft, have Hitachi in our cap table. We have Jaguar Land Rover in our cap table. We just recently added Amazon to our cap table. And those companies are here simply because these critical metals are critical for their business. In other words, critical metals are critical for a reason and they value that and appreciate that.

Molly Wood 

Right. Right.

And in fact, almost the more we call them critical as opposed to rare, it feels a little just more accurate overall.

Ahmad Ghahreman

It is much more accurate. So in my experience, companies are interested in conversation with us for two reasons. 

Sometimes companies are hyper-focused on the environmental side of the conversations and they really want to reduce their carbon footprint. For instance, we have amazing Microsoft and our cap table that they have the objective of 2030, zero base 2030. So that's really what they are hyper-focused on. And on other side, we have some other companies that are interested in Cyclic Materials products because of supply chain and geopolitics.

So, and of course, I'm sure combination of the two also in the mix there exists. So, just wanted to differentiate the two on how companies really come to us and talk to us.

Molly Wood

Right. then, so give us the, so you started in 2021. This is obviously a technical process. Where are you on the road to commercialization?

Ahmad Ghahreman

Sure. So in 2021, very humbly, we started with tiny, tiny little reactors in the Metallurgy lab. For our very first batch of tests, we bought some drones, small drones, toy, toy, toys, and crashed them and started working on them. We have gone, we have come a long way since then.

We have gone through multiple scale up units right now for our spoke. We are operating in a pilot plant that is one ton per hour capacity. That's about £2,000 an hour. And on our hub side, on our chemical side, our hub has been running in Canada, Kingston, Ontario, Canada since mid last year at 100 ton a year capacity. Right now we are

With the precedes of our Series B, which we closed last summer, we are developing two projects, commercial-sized projects, one of them in Canada and another one in the US that will be ready and up and running in early 2026. We are super excited for those ones because those are going to be both of them fully commercial plans.

prove basically the scalability of our technology.

Molly Wood 

Right, exciting.

Ahmad Ghahreman

Absolutely.

Molly Wood 

And then I guess the other question is sort of what are your ideal tailwinds? Do governments play a role here? Are there technological advances that could make things easier for you? What helps you?

Ahmad Ghahreman 

Oh, my wish list is pretty long, but I will tell you that we are competing with basically an industry that is well established in China. They have 93 % of magnet production today. So we are not starting from ground zero. We are not starting from a fair...

Ahmad Ghahreman 

So government grants always are helpful. We don't plan for those in our business, but having those definitely supports our business. And we have been fortunate to receive some of those government grants in the past and hopefully in the future as well. But overall, those are some of the tailwinds that definitely helps.

startups in our space because our space on clean tech is pretty capital intensive time to time so having some support on that always is a good thing.

Molly Wood 

and then what keeps you up at night.

Ahmad Ghahreman 

my kids, that's for sure. Supply chain is still sometimes a mess since COVID, really. We sometimes say supply chains have improved significantly. No, maybe that, but mostly equipment. You order equipment, the timelines are six months and then increases by a few months because of supply chain and all that. So those are still a mess since COVID timeline.

Molly Wood 

Yeah. And does that impact you getting feedstock primarily or? Yeah.

Ahmad Ghahreman 

The overall global economic view is sometimes up, sometimes down, so that adds sometimes risks to the industry as well. But overall, on the need for critical metals side, on the back of electrification, I'm really optimistic. So I'm a strong believer that we need more and more of these metals for our future.

and we will need as much as we can produce. I can give you two stats here. In 2035, there will be a substantial deficit in how much rare earths we produce in the market globally and how much rare earths we need in the market. The deficit will be minus 35%. That's significant. Now, if cyclic materials are company...

Molly Wood 

Hmm.

Ahmad Ghahreman 

flawlessly executes on everything that we have for the next 10 years in our financial model and our plannings.

we will be less than 3 % of that deficit in 2035. So there is a lot of room for other companies to come in, play a role, either on mining side, on metal making side, on different sides, on recycling side, and make this an exciting, more robust space to come for years.

Molly Wood 

Amazing everybody in the pool if you will The company is cyclic materials. I'm on thank you so much for the time. This is fascinating

Ahmad Ghahreman 

Yeah, yes.

Ahmad Ghahreman 

Have a as we enjoy the conversation, Molly. Thank you.

Molly Wood Voice-Over: 

In May of this year Cyclic Materials announced a partnership with Lime scooters to recover rare earth materials from its decommissioned electric bikes and scooters processing them at its facility in Ontario, and eventually in a new facility in Mesa, Arizona. 

That's it for this episode of Everybody in the Pool. Thank you so much for listening.

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