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Aim- and TSX-V-listed Mkango Resources and its subsidiary Maginito have signed an investment term sheet and one-year exclusivity agreement with rare earth magnet recycling company HyProMag.
Consistent with Maginito’s strategy, the rationale for the transaction includes potential synergies, such as the blending of primary rare earth production originating from the Songwe Hill mine, in Malawi, with recycled production from HyProMag, as well as enhanced marketing flexibility and access to downstream markets for rare earths permanent magnets, which are materials for electric vehicles, wind turbines, consumer electronics and other technology applications.
Maginitio is 75.5%-owned by Mkango and 24.5%-owned by Talaxis.
Subject to completion of definitive agreements and due diligence, Maginito will invest £300 000 for an initial 25% interest in HyProMag and provide a £200 000 convertible loan facility, both of which will be fully funded from its existing cash resources.
Maginito will have the option to increase its interest in HyProMag to up to 49%, and the first right to supply any primary rare earth raw materials for blending with recycled materials, if required, and to market the magnetic end products.
Maginito's initial investment of £300 000 will fully satisfy HyProMag's matched funding requirements for the three-year, £2.6-million Innovate UK grant funded project, Rare-Earth Recycling for E-Machines (RaRE), which aims to establish a pilot rare earth magnet recycling facility at Tyseley Energy Park, in Birmingham, and includes Advanced Electrical Machines Research Limited and University of Birmingham as collaborators.
HyProMag, meanwhile, also has licensed a patented process – Hydrogen Processing of Magnet Scrap (HPMS) – for extracting and demagnetising neodymium iron boron alloy powders from magnets embedded in scrap and redundant equipment.
Rare earth magnet recycling and primary production will play complementary roles in the development of a sustainable electric vehicle supply chain, Mkango CE William Dawes comments.
HyProMag director Professor Allan Walton, meanwhile, adds that the investment will exploit HPMS to provide a secure supply of rate earth alloys with a very low environmental footprint.
“The strategic alliance with Mkango has future potential for supplementing and enhancing products with additional independent supply chains,” he highlighted.