(Sharecast News) - Mkango Resources announced on Monday that it has agreed with Grupa Azoty Zakłady Azotowe Pulawy to work towards the development of a rare-earth separation plant in Poland.
The AIM-traded firm said ti had established a new wholly owned Poland-based subsidiary, Mkango Polska, appointing a "highly experienced" country director, Dr Jarosław Pączek, together with rare-earth separation experts Carester and a "strong team" of technical advisors and engineers.
Pulawy is part of the Grupa Azoty Group, which is the European Union's second largest manufacturer of nitrogen and compound fertilisers, and a major chemicals producer.
Its products are exported to more than 20 countries in Europe, the Americas and Asia.
The parties had signed an exclusive lease option agreement for a site adjacent to Pulawy's large-scale fertiliser and chemicals complex at Pulawy in Poland, which Mkango said provided "excellent" infrastructure, access to reagents and utilities on site, and an "attractive" operating environment, resulting in a "highly competitive" operating cost position for the plant based on scoping studies to date.
Located within a Polish special economic zone, the site would provide "excellent" access to European and international markets.
Production from the plant would strengthen Europe's security of supply for rare earths, used in electric vehicles, wind turbines and other green technology and strategic applications, and would align with European initiatives to create more robust, diversified supply chains.
Development of the plant was expected to bring significant benefits to the Mkango group, with higher value-added products with increased margins as it targeted 2,000 tonnes per year of separated neodymium and praseodymium oxides, and 50 tonnes per year of dysprosium and terbium oxides in a heavy rare-earth enriched carbonate.
It would also enable greater integration, with the plant development "fully underpinned" by sustainably sourced, purified mixed rare earth carbonate from Mkango's Songwe Hill operations, with other synergies being evaluated.
There would also be increased marketing flexibility, the board said, with a broader range of potential customers, and future opportunities to produce and market separated heavy rare earths.
Mkango also described the project as a "catalyst for regional growth and the green transition", with the potential for further downstream developments and related businesses, including renewables, creating additional jobs in the region.
Engagement with financial institutions was underway to accelerate the development, and additional strategic partnerships, downstream developments and marketing opportunities were being evaluated.
Feasibility studies for the plant were being undertaken in parallel with Mkango's Songwe Hill rare earths project in Malawi and other opportunities, including Mkango's interest in HyProMag, which is developing the production of short-loop recycled rare earth magnets in the UK.
"Development of this plant will underline Mkango's unique positioning in the rare earths sector," said chief executive officer William Dawes.
"Our integrated 'mine, refine, recycle' strategy, encompassing sustainably sourced light and heavy rare earths from Malawi and rare earth magnet recycling in the UK, via our interest in HyProMag, is now enhanced by the opportunity to create a rare earths separation and downstream hub in Poland, working with one of Europe's largest chemical and fertilizer companies.
"We have carried out extensive due diligence on the site and believe the development of the plant in Poland will enhance the sustainable supply of rare earths into Europe, as well as bringing significant benefits to the region, creating new jobs and potential, additional, downstream developments."
At 1133 BST, shares in Mkango Resources were up 4.46% at 29.25p.
IN BRIEF: Mkango joins Grupa Azoty for rare-earth facility in Poland