HOUSTON, October 22nd (Argus) - Canadian rare earth recycling firm Cyclic Materials and German metal manufacturer Vacuumschmelze (VAC) have announced an extension and expansion of their partnership, to recycle the by-products generated during VAC's rare earth magnet production process in the United States.
The two parties signed a ten-year exclusive agreement on Wednesday, specifically handling the magnet production waste from VAC's new Sumter factory in South Carolina. The factory is expected to commence operations by the end of 2025.
VAC mainly produces neodymium iron boron rare earth magnets, which are used in automotive, defense, industrial, and renewable energy sectors.
This agreement deepens their cooperation from 2024, aiming to recycle neodymium iron boron waste to produce rare earth products, with carbon emissions in the waste recycling process reduced by 75% compared to raw mineral rare earths.
Cyclic Company announced in April this year that it would invest over 20 million US dollars to build a facility in Mesa, Arizona, capable of processing 25,000 tons of waste magnets annually. It is expected to commence operations in early 2026.
The Sumter factory of VAC will prioritize supplying magnets to several electric vehicle models of General Motors. Its US subsidiary E-VAC has received over 200 million US dollars in funding support from the US Department of Defense and the Department of Energy.
VAC has signed a purchase agreement with British miner Pensana, which will supply mixed carbonate rare earths to VAC to help E-VAC achieve a production target of 2000 tons of magnets per year, and plans to increase it to 120,000 tons in 2029.
Under this agreement, Pensana will supply mixed carbonate rare earths from its Longonjo mine in Angola to VAC starting from 2027 over a five-year period, with specific prices to be negotiated separately.
The Longonjo mine plans to initially produce 20,000 tons of mixed rare earth carbonate annually and expand to 40,000 tons after the second phase of expansion. Pensana is currently striving to advance the production start date to the end of 2026. VAC is actively laying out the US supply chain, with its eVAC permanent magnet factory in Sumter, South Carolina, to produce neodymium iron boron permanent magnets.
To reduce reliance on the Chinese supply chain, VAC launched a new type of neodymium iron boron alloy without heavy rare earths in early September 2025. These heavy rare earths are currently only produced on a large scale in China. In recent years, building a domestic rare earth supply chain in the West has become a key strategic priority for the United States. Investment has accelerated since 2025.
Last week, the United States and Australia announced that they would jointly invest 1 billion US dollars each to support key mineral projects. The eVAC executive chairman Troy Sackel stated in the announcement that this agreement benefits from the support of the Trump administration and the US International Development Finance Corporation, stating that it "not only reflects VAC's determination to build a full industrial chain from mines to magnets, but also strengthens US national and economic security." In June, Pensana also signed a purchase agreement with US refiner ReElement Technologies to supply 20,000 tons of mixed rare earth carbonate annually. To focus on the US market, the company announced last week that it has abandoned the plan to build a refinery in the UK and is instead advancing the layout of its rare earth projects in the United States.
