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(Alliance News) - Mkango Resources Ltd said Friday its subsidiary Maginito Ltd has bought a 25% interest in HyProMag Ltd to create a UK-based rare earth magnet recycling facility.
Mkango is developing the Songwe rare earth minerals project in Malawi and owns 76% of Maginito. The remainder of Maginito is owned by technology metals investor Talaxis Ltd.
The company said Maginito has invested GBP300,000 for a 25% interest in HyProMag and provided GBP200,000 convertible loan facility, both of which will be funded from Maginito's existing cash resources.
Maginito also has a four-year option to increase its interest in HyProMag to up to 49% by investing additional GBP1.0 million, and has a right of first refusal to acquire the balance of HyProMag.
Maginito's initial investment will fully satisfy HyProMag's matched funding requirements for the three-year GBP2.6 million Innovate UK grant funded project Rare-Earth Recycling for E-Machines, the company said.
The project aims to establish a pilot rare earth magnet recycling facility at Tyseley energy park, Birmingham, to produce sintered rare earth magnets for use in new electric motor designs for automotive use, the company noted.
William Dawes, chief executive officer of Mkango, said: "We see rare earth magnet recycling as a major growth industry, complementing the development of new sustainable primary production, such as Mkango's advanced stage Songwe Hill rare earths projects in Malawi."
"This investment further enhances Mkango's role in developing a robust and sustainable electric vehicle and clean technology supply chain for global markets," Dawes added.
Mkango shares were down 0.6% in London at 8.20 pence each on Friday.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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