Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF) has agreed to collaborate on the commercialisation of downstream rare earth technologies in the US after CoTec Holdings Corp completed its £1.5mln (C$2.5mln) investment for a 10% stake in its Maginito rare-earths recycling subsidiary.
First announced last May, the deal sees Mkango Rare Earths UK transferred to become a subsidiary of Maginito Ltd, while CoTech operations chief John Singleton also joins the Maginito board.
Alongside this, CoTec last month also agreed to issue a two-year, £2mln secured convertible loan to Mkango with 5% interest, convertible into shares at 27p each or into subsidiary Maginito shares.
Maginito is now “uniquely positioned” in the complementary short-loop and long-loop technologies to recycle rare earth neodymium-iron-boron (NdFeB) magnets, which are seeing a burgeoning demand from electric vehicle battery makers.
The business has “major competitive advantages” in the rare earth recycling sector, Mkango said, including patented energy-efficient hydrogen processing of magnet scrap (HPMS) technology, and the capability to manufacture rare earth magnets with a much-reduced carbon footprint.
Maginito owns a 42% interest in HyProMag Ltd, which is focused on short-loop rare earth magnet recycling in the UK, and 66.8% direct and indirect interest in HyProMag GmbH, a German company focused on short-loop rare earth magnet recycling, and its new 100% interest in Mkango UK, which is focused on long loop rare earth magnet recycling via a chemical route.
Maginito is also expected to benefit from “potential synergies” with Mkango's development of primary rare earths production in Malawi and Poland.
A new US subsidiary, to be jointly owned by Maginito and CoTec, is planned to develop rare earth technology opportunities in the US, Mkango said.
In Maginito's development pipeline, Mkango said, are short-loop recycling plants to be commissioned in UK and Germany in 2023 and 2024, respectively, a pilot plant for long-loop recycling via chemical processing targeted for commissioning in 2023, with scoping and feasibility studies for USA and other regions “proceeding in parallel”.
Mkango chief executive William Dawes said the two companies have “a shared vision for Maginito to create a large-scale, international business focused on downstream rare earth technologies and recycling”.
He added that the restructuring of Maginito also facilitates future access to capital and creates a platform for it to scale up, pursue an international rollout and further partnership opportunities.
CoTec boss Julian Treger said he is “keen to work swiftly with Mkango to roll-out production into North America”, seeing the technologies as “very helpful to establish US independence in the rare earth realm”.
He said the plants are expected to start generating revenues for CoTec in “relatively short order”.