Noveon Magnetics is taking old and discarded items and extracting rare-earth magnets from them. They are recycling rare earth magnets, reshaping them into new ones and reusing them. The company bypasses China in this context and reduces the dependency of the United States on China for rare-earth magnet imports. With their innovative and patented technology CEO Scott Dunn and his team are making the process cleaner and recyclable. This Texas startup recycles rare-earth magnets to maintain economic security and their products are highly demanded.
Computer hardware, bird scooters, motors from hybrid cars, and MRI machines are being collected by factory workers in San Marcos, Texas. These items are collected for separating old and rare-earth magnets to be grounded and reshaped again as new ones. These strong permanent magnets are everywhere, and mostly we are unaware of their presence. Electric vehicles, consumer electronics, missile guidance, and wind turbines all contain them.
For years, the United States has been largely dependent on China for these rare earth processing magnets. Noveon Magnetics, the startup is all set with a grand plan and patented technology to reduce this dependency of their nation on China.
After the 2010 incident when water controlled by Japan was claimed by China, the Chinese government restricted exports of these magnets. Also, the price for 2 key rare earth minerals used in magnets was increased way too much. It included neodymium with a 750% price hike and dysprosium with a 2000% price rise.
Noveon’s co-founder and chief executive, Scott Dunn said, â€œWe didn’t realize till the last decade how big the potential shortfalls were. You don’t just get to turn on the spigot and produce these. They’re not a commodity.â€
Initially, the founders of the company decided to consolidate rare earth materials and sell them to separators in Japan and China. For this purpose, the duo even travelled to places like India, China, Philippines, Canada, and USA. In 2012, Dunn and Afiuny’s business was stalled until they attended a conference in Nagasaki focused on permanent magnets.
At the conference, they met Zakotnik and Tudor. Zakotnik was from Slovenia and a trained chemist and material scientist. He invented a process to recycle these magnets by using the powder metallurgy process.
Zakotnik said, â€œAs part of my Ph.D., I showed that our route could be used to recycle not once, but twice, three times, four times.â€ His research was published in 2008, and before he joined Noveon he was a visiting professor at Beijing University of Technology and scientist at Yantai Shougang Magnetic Materials in China.
Magnets used in generators and motors enable electricity transformation into motion and this motion back to electricity. The country’s efforts to decarbonize the atmosphere with wind turbines and EVs are largely dependent on permanent magnets. This is due to their high performance in providing more powerful motors. According to the estimate of Adamas Intelligence, the increase in global demand for rare-earth magnets will be at 7.5% compounded annually through 2040.
According to Dunn, by 2024 or 2025 the facility in San Marcos will reach its max capacity it will be producing 2,000 tons of magnets under long-term supplier agreement. This will be manufactured from a mix of recycled and mined rare earth materials. This will bring in revenue of around $250 million with 40% Ebtida at current magnet prices. CEO hopes to set up similar factories in Europe and Asia with a goal of $1 billion revenue within 5 years.
The demand for their recycled rare earth magnets is so high that Dunn says, â€œWe would have to build four or five factories to meet the demand of our customers.â€ Scott Dunn along with co-founders Catalina Oana Tudor, Miha Zakotnik, and Peter Afiuny spent years refining and patenting the technology. They scaled it up with the help of funds from the Department of Defense and investments from private investors.
Practically, making magnets is considered a dirty process and disposing of them is tough because they are considered contaminated. The process introduced by Noveon solved both problems. Because once the company harvests the materials for rare-earth magnets from old products, remaining metal scrap is recycled. Kirk Anderson, director of government affairs of Nidec Motors said, â€œNoveon makes the highest power or highest density magnets. They’re the best of the best.â€ Nidec Motors is one of their early customers.
Director of global strategic sourcing at Eriez, Terri Koebe said, â€œThey were very high quality, and we were really impressed. It’s very complicated to extrapolate the rare earths from scrap material.â€ Terri got to know about the company in 2019, at a magnetic conference held in Orlando, Florida.
It is believed that recycling permanent magnets reduces their performance by Scott Dunn’s Noveon proprietary technology is free from such flaws. In 2021, the Commerce Department initiated an investigation to look into the effects on national security of importing rare-earth magnets.
The report was as expected, and the import was surely posing threats to national security. As a result, the U.S. magnet supply was bolstered with a tax credit for domestic manufacturing and investments through the Defense Production Act were provided. Later in April 2021, Representatives Guy Reschenthaler (R-Pa.) and Eric Swalwell (D-Calif.) introduced the bipartisan bill for supporting domestic rare-earth magnet manufacturing with tax credits.
Considering this and critical minerals import as a major political issue, Texas Governor Greg Abott chose Noveon to be the site of his State of the State address in February. In this context, Governor Abbott said, â€œNoveon is a cutting-edge business in the critical field of rare-earth elements and rare earth materials. We needed to decrease our reliance on China for rare earth minerals. If that supply is ever disrupted, many of the things we do every day would come to a halt.â€
Dun says, â€œThe demand for our product started to explode. We had automotive companies calling us saying, how much can you make and when?â€
About the Founder
Scott Dunn grew up in Bel Air, Maryland, where his family held a private body armor and ballistics company. He studied at the U.S. Naval Academy and later transferred to the University of Southern California to study environmental science.
Even though their business was small, the work was interesting that included testing bulletproof glasses for presidential vehicles. This is the place where Scott Dunn first learned about recycling.
He was a teenager when his dad asked him for a solution for some leftover aluminum alloy 6061. Recycling journey continued during his college days till his first employment.
He learned how much valuable metal can be recovered and recycled from old solar thermal water heating systems.
After meeting with Zakotnik and Tudor in Nagasaki, it took them some time to arrange their thoughts and when they return to the U.S. Dunn’s father became the first seed investor by inputting $1 million after that they received their first governmental fund through the Federal Small Business Innovations Research program (SBIR).
They also received funds to relocate to Texas to set up their pilot plant in Austin. This is how a Texas startup recycles rare-earth magnets to maintain economic security and decarbonize the atmosphere.