Tusaar hopes for rare-earth rewards

LAFAYETTE – When he first licensed a patent from the University of Colorado for an organic media that could be attached to carbon and bond to certain types of metals, Gautam Khanna thought he had the makings of a water treatment company.

He certainly wasn’t envisioning the extraction of rare earth metals from waste streams, the application that might soon become the fastest way to profitability for his Lafayette-based startup, Tusaar Corp. And with Tusaar’s product now being tested for its ability to aid in the cleanup of nuclear sites such as Hanford in Washington and Fukushima in Japan, the possibilities for Tusaar seem wide-reaching as the four-year-old company preps to move, as Khanna puts it, “from startup to started up.”

“It’s about time,” Khanna says.

The company brought in about $2,000 in revenue in 2012, and Khanna projects only about $50,000 this year. But that could change in a big way as efforts soon get under way to scale up production.

“That’s a nice growth curve (for revenue), but that’s not substantial enough,” Khanna said. “But I think we’re now hitting the time when we’re getting paying customers to start working with us. Revenue next year at this time, we better be profitable and running with the revenue.”

Tusaar – Sanskrit for “refreshing spray of water” – has four employees, although Khanna is expecting that number to increase to seven by year’s end. To date, most of the employees’ energy has been spent in the laboratory, tweaking Tusaar’s product to make it workable for industry.

Tusaar’s product is an organic compound from the benzotriazole family that is bonded to carbon so that it doesn’t float. When waste stream solutions are passed through the media, the media attracts certain metals. Once separated, those metals can either be transported or disposed of as easier-to-manage solid waste, or recovered from the media for use in the production of industrial products. Once metals are separated from Tusaar’s media, the media can be reused several times depending upon the application.

Khanna, a native of India who has worked in business development around the world for companies such as Dell and Whirlpool, started Tusaar in 2009 after being introduced to the technology by the Innovation Center of the Rockies. The center charges universities a fee to work with their technology transfer offices and connect new technologies developed at the schools with businesses or entrepreneurs who can commercialize them.

The idea of getting the organic compound anchored to a substrate for the use of water treatment was developed by Mark Hernandez, a professor at CU.

“The existing technologies that can do that either didn’t perform as well or were a lot more costly or a combination of both,” said Tim Bour, executive director of the Innovation Center of the Rockies.

Both Hernandez and CU have minority ownership stakes in Tusaar. But the company now has exclusive license to the patent CU acquired for the technology. Tusaar has obtained two more patents in followup, and a third is in the works as Tusaar refines the media and how it performs.

The media’s value in extracting toxic metals such as mercury from water is fairly well proved. And Khanna is confident about its prospects in cleaning up radioactive metals. But the gestation period in the nuclear realm, for example, is a long one since scientists cleaning up waste sites can’t afford to make mistakes and extensive testing is required.

Last fall, however, Khanna began talking with companies interested in recovering rare earth metals such as Europium, Terbium or Yttrium, which are utilized in everything from cell phones and other electronics to wind turbines, energy efficient lighting and the batteries powering hybrid electric vehicles.

One major source of the metals in waste streams is compact fluorescent light bulbs. CFLs are recycled now to extract the toxic mercury, but most of the remaining phosphor dust from the crushed bulbs ends up in landfills.

“That has more rare earths in it than the best ore in the world,” Khanna said.

Aside from just waste streams, Tusaar’s media also is becoming attractive to companies mining rare earths as countries such as the United States and others try to catch up in the lucrative market. China owns a near monopoly of the rare earth market as many countries shied away from mining them in recent decades in part because the process for extracting rare earths is highly polluting.

“I think we offer them a very environmentally friendly, cost-effective means of extracting the rare earths from the ore,” Khanna said.

Chris Shapard, executive director of the Colorado Cleantech Industry Association, said other companies such as Neumann Systems Group Inc. in Colorado Springs, are dabbling in the emerging rare earth market. However, extracting rare earths from waste streams is still novel technology, and Khanna believes there is plenty of room to succeed business-wise even if there is competition.

Tusaar has raised about $1.8 million to date. About $1.15 million has come from the U.S. Department of Energy and another $130,000 from the National Science Foundation. Another $300,000 in debt has been financed, while Khanna himself has also put money into the company.

Khanna said he’s now working on taking on equity partners, hoping to raise another $1.2 million before the year is out so the company can start scaling up a manufacturing facility for its media.

Successfully navigating the scaling-up process and proving that the media works on a larger level and not just in the lab is key, Shapard said. “That’s where a lot of cleantech companies have problems.”

The rewards of doing so, however, could be tremendous for Tusaar. Aside from the lucrative rare-earths market, finding success in nuclear cleanup could be a major coup for the company and the environment.

In Fukushima, where the Daiichi nuclear power plant suffered damage from the 2011 tsunami that ravaged Japan’s Pacific coast, hundreds of tons of water per day are used to cool reactors and in the process made radioactive. Not only is that radioactive water leaking from the containers where it is kept, but space to store it is also running short.

Khanna says a company working on the cleanup efforts in Japan is testing Tusaar’s media for its effectiveness in removing radioactive metals from the water.

“If this thing were to work there,” Khanna said, “that would be a massive (success).”

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