Mkango Resources Advances Critical Rare Earth Magnet Project in Texas: A Strategic Play for US Supply Chain Resilience

Mkango Resources (NASDAQ: MKAFF) is making significant strides in its quest to establish a domestic rare earth magnet supply chain in the United States. The company’s HyProMag USA project, a joint venture with CoTec Holdings Corp., is now in advanced stages of engineering and planning, with milestones in 2025 positioning it to begin production by 2027. This initiative is a cornerstone of the U.S. effort to reduce reliance on foreign rare earth sources, which are critical for electric vehicles (EVs), wind turbines, and defense systems.

The HyProMag USA facility, located in the Dallas-Fort Worth, Texas region, will leverage patented Hydrogen Processing of Magnet Scrap (HPMS) technology to recycle and manufacture neodymium-iron-boron (NdFeB) magnets. The project’s Feasibility Study, completed in November 2024, highlights a robust economic profile, with a net present value (NPV) of $262 million at current prices and $503 million under forecasted pricing scenarios. The study also underscores the project’s capacity to produce 750 metric tons of recycled sintered NdFeB magnets annually, alongside co-products, meeting 10% of U.S. domestic demand within five years of operation.

Key Progress in 2025: Engineering and Technology Validation

Mkango has entered the detailed engineering design phase, led by contractors PegasusTSI Inc. and BBA USA Inc., with plans to finalize technical specifications and cost estimates by mid-2025. This phase will determine the issuance of a Notice to Proceed (NTP), expected in the second half of 2025, which will mark the start of construction.

A critical milestone was achieved in February 2025, when a Factory Acceptance Test (FAT) for the HPMS vessel—key to recycling magnet scrap—was successfully completed. This technology, developed by the University of Birmingham, enables the efficient extraction of rare earth elements from end-of-life products, offering a 20–30% cost advantage over chemical recycling methods.

The project’s environmental credentials are equally compelling. An independent carbon footprint study confirmed an ultra-low CO₂ footprint of 2.35 kg CO₂ eq. per kilogram of magnet product, positioning the facility as a leader in sustainable manufacturing. This aligns with U.S. government goals to decarbonize critical mineral supply chains.

Strategic Positioning and Partnerships

HyProMag USA is structured as a 50:50 joint venture between CoTec and HyProMag Limited, a subsidiary of Maginito Limited (79.4% owned by Mkango). The project’s design includes a “hub-and-spoke” model, with a central Texas manufacturing hub and pre-processing facilities in Nevada and South Carolina. These regional facilities will handle magnet scrap preprocessing, reducing logistics costs and accelerating scalability.

The venture has secured support from the U.S. Minerals Security Partnership, which aims to diversify critical mineral supply chains. Discussions with federal and state governments are advancing, with Mkango targeting carbon pricing incentives and grants to bolster project economics.

Financial and Operational Outlook

The Feasibility Study estimates an all-in sustaining cost of $19.6/kg for NdFeB magnets, well below current market prices of $30–$40/kg, creating strong margins. First revenue is anticipated in early 2027, with full production capacity achieved by 2032. The facility will also generate 90–100 skilled jobs, revitalizing domestic manufacturing.

The company’s plans to list its Songwe Hill (Malawi) and Pulawy (Poland) projects on NASDAQ via a SPAC merger with Crown PropTech Acquisitions further strengthens its capital-raising capacity. These assets, designated as strategic under the EU’s Critical Raw Materials Act, complement HyProMag USA’s efforts to secure global supply chain dominance.

Risks and Considerations

While progress is notable, risks remain. Delays in securing $130–$150 million in project financing could push timelines, as could regulatory hurdles. Competing projects in China and elsewhere may also impact pricing. However, the U.S. government’s $1 trillion in infrastructure spending and focus on critical minerals provide a tailwind.

Conclusion: A Strategic Bet on U.S. Supply Chain Resilience

Mkango Resources’ HyProMag USA project is a strategic linchpin for reducing U.S. reliance on foreign rare earth sources. With a $503 million NPV under forecast pricing, strong partnerships, and a technology edge, the project is well-positioned to capitalize on soaring demand for EVs and renewable energy.

The low CO₂ footprint and scalability of the hub-and-spoke model further enhance its long-term viability. Investors should monitor the Q2 2025 NTP decision and financing progress closely. With rare earth prices expected to remain elevated due to EV adoption (global demand for NdFeB magnets is projected to grow at 10–12% annually), Mkango’s Texas facility could deliver outsized returns.

In a market hungry for supply chain security and green manufacturing, Mkango’s progress in 2025 solidifies its status as a leader in the critical minerals sector. This project is not just about magnets—it’s about reshaping the future of American industry.