Microsoft invested in Cyclic Materials, a startup that extracts rare earth elements from old HDDs

Microsoft has turned its attention to a valuable source of rare earth elements—end-of-life hard drives. According to Datacenter Dynamics, Canadian startup Cyclic Materials has received an equity investment from a Microsoft-controlled entity, the Climate Innovation Fund. Financing terms were not disclosed.

Founded in 2021, Cyclic Materials is a metal recycling company. She developed and patented CC360 technology, which allows the extraction of rare earth raw materials from HDDs. Decommissioned hard drives are often sent for recycling, which, in the best case, mainly extracts precious metals like gold and silver from the components, the startup says. CC360 technology will allow some HDD components to be separated to extract rare earth elements, and the remaining fragments to be processed as usual.

Image Source: Art Wall – Kittenprint/unsplash.com

According to a representative of the Climate Innovation Fund, Microsoft is working to achieve zero emissions by 2030 and transition to a “circular economy.” At the same time, the importance of rare earth elements continues to grow, and new investments will help ensure their sustainable supply. Microsoft’s support will enable Cyclic Materials to accelerate the introduction of commercial capacity. But the technology will also be useful to other large data center operators.

In the spring of 2023, Cyclic Materials closed a Series A funding round, receiving $27 million. The round was led by BMW i Ventures (BiV) and Energy Impact Partners (EIP), and also included Fifth Wall, Bioindustrial Innovation Canada (BIC) and investor Planetary Capital. In addition, in the same year the so-called The Sustainable Development Technology Council of Canada (SDTC) invested CA$3.6 million ($2.6 million) in the startup.

Image source: Cyclic Materials

Cyclic Materials recently opened Hub100 in Kingston, Ontario, Canada, North America’s first mixed rare earth oxide (rMREO) facility using proprietary REEPure hydrometallurgical technology. Hub100 can process up to 100 tons of magnetic materials annually into rMREO concentrate. In addition, nickel and cobalt compounds are mined along the way. All of them can be reused to create new products.

However, hard drives can not be recycled, but restored, cleaned and sold again – this is exactly what Seagate has been doing recently. It’s not just Microsoft that is involved in other alternative recycling methods. For example, Meta✴ and Mycocycle last year began an experiment in recycling waste after building a data center using mushrooms.