Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF) is forming a joint venture between subsidiary Maginito and shareholder CoTec to supply rare earth magnets technology in the US.
Technology developed by HyProMag, a business owned 90%/10% between Mkango and CoTec, will be sublicensed to the new 50/50 venture.
HyProMag is launching this year in the UK and Germany next year, with a US entry pencilled in for 2025/2026.
A scoping study and bankable feasibility for the deployment of three Hydrogen Processing of Magnet Scrap (HPMS) vessels utilising the HyProMag technology and one magnet manufacturing facility in the US will be the initial focus.
The feasibility study is expected to be completed in 2024 after which a decision will be made on whether the project will go any further.
CoTec will fund the initial operations and all the expected development costs of £30 million to £50 million through shareholder loans.
Julian Treger, CoTec chief executive, commented; "This is a major step forward for CoTec and Mkango/Maginito.
"The US presents a significant opportunity for the HyProMag technology and the technical skills of Mkango and HyProMag combined with CoTec's commercial strength could potentially provide shareholders with a unique and robust value proposition in the rare earth industry in the right jurisdiction at the right time."
HPMS technology was developed at the University of Birmingham, underpinned by approximately US$100 million of research and development funding.