Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, OTC:MKNGF) said HyProMag GmbH has been awarded grants totalling €3.7mln for a new project to develop Germany's first rare earth magnet recycling plant using the hydrogen processing of magnet scrap (HPMS) process.
The total cost of the project, called 'Innovation Centre for Science & Economy Northern Black Forest IZWW', is expected to be €6.1mln, of which approximately 60% will be funded by the grants.
The European Regional Development Fund (ERDF) has awarded a €2.5mln grant and the Ministry of Economic Affairs, Labour and Tourism Baden-Württemberg has provided a €1.2mln grant.
The first phase of the project includes the development of a production facility in Baden-Württemberg State with a minimum capacity of 100 tonnes per annum NdFeB (permanent magnets composed of neodymium, iron and boron) comprising recycled rare earth sintered magnets, alloy pellets and powders.
First production from the project is targeted for 2024, said AIM-traded Mkango.
Rare earth magnets play a key role in clean energy technologies, including electric vehicles and wind turbine generators, and are also a key component in electronic devices, including mobile phones, hard disk drives and loudspeakers.
The initial production facility in Germany would be a similar size to the £4.3mln project being developed by HyProMag Ltd, holder of an 80% stake in HyProMag GmbH, and the University of Birmingham at Tyseley Energy Park in the UK, with first production targeted for 2023.
Mkango holds a 42% interest in HyProMag Ltd.
"This is an exciting milestone for Mkango, HyProMag GmbH, HyProMag Ltd, which significantly enhances the group's production pipeline, targeting first production in the UK in 2023 and Germany in 2024, with North America developed in parallel,” said Mkango chief executive William Dawes in a statement.
“We envisage that the recycling of rare earth magnets will play a key role in the development of robust supply chains to catalyse and support growth in the electric vehicle sector and in other clean technologies," he added.