Canadian junior Mkango Resources and Grupa Azoty Zakłady Azotowe PULAWY have agreed to work together towards the development of a rare earth separation plant, in Poland.

Mkango, which is listed on the TSX-V and Aim, has established a new wholly owned subsidiary Mkango Polska, to be led by Mkango Poland country director Dr Jarosław Pączek, together with rare earth separation experts Carester and a team of technical advisers and engineers.

Grupa Azoty PULAWY is part of the Grupa Azoty Group, the European Union’s second-largest manufacturer of nitrogen and compound fertilisers and a major chemicals producer.

The parties have signed an exclusive lease option agreement for a site adjacent to Grupa Azoty PULAWY’s large-scale fertiliser and chemicals complex at Pulawy, in Poland, which Mkango says provides “excellent infrastructure, access to reagents and utilities on site, and an attractive operating environment, resulting in a highly competitive operating cost position for the plant, based on scoping studies to date”.

Located within a Polish special economic zone, the site is also said to provide good access to European and international markets.

Production from the plant is slated to strengthen Europe’s security of supply for rare earths, used in electric vehicles, wind turbines and other green technology and strategic applications, and aligns with European initiatives to create more robust, diversified supply chains.

Development of the plant is expected to bring significant benefits to the Mkango group.

Mkango notes that the plant will deliver higher value-added products with increased margins. It is targeting 2 000 t/y of separated neodymium/praseodymium oxides, and 50 t/y of dysprosium and terbium oxides in a heavy rare earth enriched carbonate.

Moreover, it anticipates greater integration, with the plant development fully underpinned by sustainably sourced, purified mixed rare earth carbonate from Mkango’s Songwe Hill operation, in Malawi.

Other synergies are also being evaluated.

There is also increased marketing flexibility, with a broader range of potential customers, as well as future opportunities to produce and market separated heavy rare earths.

Lastly, Mkango notes, the facility is a catalyst for regional growth and the green transition, with the potential for further downstream developments and related businesses, including renewables, creating additional jobs in the region.

Engagement with financial institutions is under way to accelerate development and additional strategic partnerships, downstream developments and marketing opportunities are being evaluated.

Feasibility studies for the plant are being undertaken in parallel with Songwe Hill and other opportunities, including Mkango’s interest in HyProMag, which is developing the production of short loop recycled rare earth magnets in the UK.