AMN - MALAWI: Mkango signs recycling agreement

Mkango Resources 75.5% owned subsidiary Maginito Limited has signed an investment term sheet and one-year exclusivity agreement with HyProMag Limited, a private company focused on rare earth magnet recycling. This arrangement will see the parties investigate possible synergies for the use of rare earths from Mkango's Songwe Hill project in Malawi.

HyProMag is examining the possible establishment of a rare earth magnet recycling facility in the UK.

Consistent with Maginito's strategy, the rationale for the transaction includes potential synergies, such as blending of primary production originating from Songwe with recycled production from HyProMag, as well as enhanced marketing flexibility and access to downstream markets for rare earth permanent magnets.

These are critical materials for electric vehicles, wind turbines, consumer electronics and other technology applications.

Maginito is 75.5% owned by Mkango, which is completing a feasibility study for the Songwe Hill project, and 24.5% owned by Talaxis Limited, the technology metals investment and development company and a wholly-owned subsidiary of Noble Group Holdings Limited.

HyProMag has licensed a patented process for extracting and demagnetising neodymium iron boron (NdFeB) alloy powders from magnets embedded in scrap and redundant equipment named HPMS (Hydrogen Processing of Magnet Scrap). This was originally developed within the Magnetic Materials Group (MMG) at the University of Birmingham.

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 Maginito's existing cash resources.

Maginito will have an 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.

The founding directors of HyProMag, comprising Professor Emeritus Rex Harris, former Head of the MMG, Professor Allan Walton, current Head of the MMG, and two Honorary Fellows, Dr John Speight and Mr David Kennedy, are leading world experts in the field of rare earth magnetic materials, alloys and hydrogen technology, and have significant industry experience.

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', which aims to establish a pilot rare earth magnet recycling facility at Tyseley Energy Park, Birmingham, and includes Advanced Electrical Machines Research Limited and University of Birmingham as collaborators.

Mkango's chief executive William Dawes said: "We are very pleased to be working with the leading team and university in the field of magnetic materials. We believe that rare earth magnet recycling and primary production will play complementary roles in the development of a sustainable electric vehicle supply chain and we see clear synergies with the development of Mkango's advanced stage Songwe Hill rare earths project in Malawi."

HyProMag director Prof Allan Walton said, "In recent years the rare earth materials which are used in permanent magnets have come under considerable supply constraints. At the same time there is very little recycling of these materials partly due to the technological challenges for efficiently separating magnets from end of life products.

"This investment in HyProMag will exploit HPMS in order to provide a secure supply of rare 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."

Talaxis executive director Daniel Mamadou said, "We are excited to be partnering with HyProMag and Mkango on this ground-breaking project that has the potential to revolutionise rare earths magnet recycling for the electric vehicle market. The investment is an excellent strategic fit with Talaxis' technology metals portfolio, strengthening our position in the rare earths supply chain and underlining our commitment to decarbonisation and sustainability."

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