Full Breakdown
Canada Growth Fund Invests in Rare-Earth Recycler Cyclic Materials
1/24/2026, 11:04:15 AM
Investment Overview
The Canada Growth Fund (CGF) has announced a US$25-million investment in Cyclic Materials Inc., a Kingston-based recycler of rare-earth elements. This funding marks CGF's second investment in clean technology and critical minerals within a week, reflecting Ottawa's strategy to strengthen its supply chain for critical minerals and reduce reliance on China amid ongoing trade tensions. Established in late 2022, CGF manages a total of $15 billion aimed at supporting large-scale clean technologies in Canada.
Cyclic Materials plans to extract permanent rare-earth magnets from end-of-life products, such as used electric vehicle motors, at a facility in Arizona, while raw rare earths will be processed at a separate hub in Kingston, both of which are currently under construction. The investment will primarily support the Kingston plant and research and development initiatives.
Background and Context
Cyclic Materials operates in a sector where recycling of rare-earth elements remains minimal, accounting for less than 1% of the global supply chain. China dominates this market, supplying approximately 85% to 90% of rare earths. Previous Canadian ventures in recycling technology, such as Li-Cycle Corp., have faced significant challenges, including financial difficulties that led to creditor protection. Li-Cycle's assets were later acquired by Glencore PLC, highlighting the risks associated with scaling up recycling operations.
Key Figures
Ahmad Ghahreman, co-founder and CEO of Cyclic Materials, emphasized the importance of CGF's investment for the company's growth. With a background in materials engineering and extensive experience in mining, Ghahreman has previously served as a technical adviser for Li-Cycle. Yannick Beaudoin, CEO of Canada Growth Fund Investment Management, noted that CGF's investment strategy involves taking on more risk by acquiring equity in companies, which contrasts with the lower-risk loans provided by other federal funding bodies.
Criticism and Opposition
Despite the optimistic outlook from CGF and Cyclic Materials, critics point to the historical challenges faced by Canadian recycling initiatives. The failure of Li-Cycle raises questions about the viability of scaling up such technologies in Canada. Additionally, the long-term success of CGF's investments remains uncertain, as many of these projects are years away from profitability.
Official Statements & Responses
Yannick Beaudoin stated, “We don’t have the security that they have in their loans... we invest in projects that are close to a final investment decision.” Ahmad Ghahreman remarked, “Cyclic is at a pivotal moment in its growth,” highlighting the critical nature of the funding for the company's future.
What's Next
The funding for Cyclic Materials is part of a broader US$75-million Series C equity raise led by T. Rowe Price Associates Inc. As CGF continues to invest in early-stage companies, the outcomes of these investments will be monitored over the coming years, with the potential to significantly impact Canada's position in the global rare-earth supply chain.
