Rare earths company Maginito, in which Mkango Resources holds a 90% interest, is set to increase its ownership in HyProMag from 42% to 100% for an initial £1-million in cash and £1-million in Mkango shares, as well as a further £3-million of Mkango shares, payable in four tranches, subject to production and other milestones in the UK, Germany and the US.
The cash component is to be funded from the recent £1.5-million investment by CoTec into Maginito. CoTec holds a 10% interest in Maginito.
Following the transaction, Maginito will hold a 100% interest in HyProMag, which is focused on short-loop rare earth magnet recycling in the UK; a 90% direct and indirect interest in HyProMag GmbH, a company focused on short-loop rare earth magnet recycling in Germany; and a 100% interest in Mkango Rare Earths, a company focused on long-loop rare earth magnet recycling in the UK via a chemical route.
A new US subsidiary, to be jointly owned by Maginito and CoTec, is expected to be formed to develop rare earth recycling opportunities in the US.
Maginito is targeting first production from the UK this year and Germany in 2024, with parallel technology rollout into the US.
This acquisition is expected to provide a major competitive advantage in the rare earths magnet recycling sector, underpinned by about $100-million of research and development expenditure at the University of Birmingham and with associated project partners.
Moreover, it presents access to highly energy efficient, patented hydrogen processing of magnet scrap (HPMS) technology.
There is also the ability to manufacture rare earth magnets with a significantly reduced carbon footprint.
Maginito and CoTec have launched the roll-out of HPMS into the US. They are evaluating the development of recycling, chemical processing, alloy and magnet manufacturing; and scoping studies and site selection are underway ahead of feasibility studies.
CoTec and Maginito will form a 50:50 joint venture for US developments, with CoTec to fund the feasibility study and project development costs.
There are ongoing discussions with the US government, potential customers and recycling partners.
“Since acquiring our initial interest in HyProMag in 2020, we have seen the company go from strength to strength, de-risking and further scaling up the patented HPMS rare earth magnet recycling technology, building the team and developing further industry partnerships, all against the backdrop of growing interest in recycling and sustainable rare earth supply chains.
"We look forward to working closely with the HyProMag team as we continue to support the growth of the business,” says Mkango CEO William Dawes.
In addition to its work in the rare earth magnet recycling space, Mkango also owns the Songwe Hill rare earth exploration project, in Malawi.