(Alliance News) - Mkango Resources Ltd on Monday said Maginito Ltd has signed an investment agreement with HyProMag Ltd to create a UK-based rare earth magnet recycling facility.
Shares in Mkango were yp 6.3% at 6.80 pence in London in early afternoon trading.
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.
Maginito is to invest GBP300,000 in HyProMag, which has licenced a "process for extracting and demagnetising neodymium iron boron alloy powders from magnets embedded in scrap and redundant equipment named HPMS", for an initial 25% interest in the company.
In addition, Maginito will provide a convertible loan facility of GBP200,000 to HyProMag - fully funded using its existing cash funds. Maginito will also have the option to raise its HyProMag interest to 49% and to supply primary rare earth raw materials to be blended with recycled materials if necessary.
The initial GBP300,000 satisfies HyProMag 'snatched funding requirement for a GBP2.6 million grant from Innovate UK.
Mkango Chief Executive William Dawes said: "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."
By Anna Farley; annafarley@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
Mkango Res (MKA)