TSX-V- and Aim-listed Mkango Magnetic Materials' HyProMag USA subsidiary has completed an independent prefeasibility study (PFS) on the potential expansion of its proposed US rare earth magnet manufacturing platform beyond its first plant in Northlake, Texas.

The Northlake plant is currently in the detailed engineering phase, with Phase 1 commissioning expected by mid-2028.

The PFS evaluates a phased expansion to three regional production plants supported by a centralised manufacturing, finishing and technology hub - Central Texas Hub - to produce commercial neodymium-iron-boron (NdFeB) magnet products in the US from both end-of-life recycled feedstock and primary alloy material.

Together with the Northlake Texas facility, the platform targets total saleable material of about 6 000 t/y by 2034, which would be an increase of 4 474 t/y compared with the standalone Northlake Texas scenario.

Mkango envisions total magnetic material production from HyProMag can be 4 192 t/y of magnets, 1 305 t/y of magnetic NdFeB alloy powder and 503 t/y of other saleable material by 2034.

The PFS builds upon the engineering and development work completed for the Northlake Texas facility and outlines a pathway for HyProMag to develop from a Hydrogen Processing of Magnet Scrap- (HPMS-) enabled magnet recycler into a fully integrated producer of commercial rare earth magnet products for US customers.

HyProMag believes the platform combines the cost advantages and operational flexibility of both end-of-life recycled feedstock and primary alloy feedstocks, providing a flexible and scalable pathway to magnet manufacturing.

HyProMag may also benefit from potential future access to primary sourced feedstock from Mkango pursuant to certain Mkango supply rights to HyProMag.

PFS ECONOMICS

The PFS assessed three new production plants in South Carolina, Nevada and a second location in Texas, which would operate alongside the Northlake Texas facility. Each plant is intended to process feedstock, operate HPMS and produce unfinished sintered NdFeB blocks.

In the proposed configuration, unfinished sintered blocks from the three plants can be transferred to a Central Texas Hub for advanced manufacturing and finishing.

A key outcome of the PFS was the optimisation of the manufacturing configuration to increase production of higher-value NdFeB magnet products. Notably, the PFS outlines a potential four-fold increase in US magnet production capacity from 1 048 t/y of NdFeB magnets at Northlake Texas only to about 4 192 t/y across four plants by 2034.

The PFS plants are designed to recover and reprocess manufacturing residues, including magnet machining end cuts through the HPMS process, maximising the use of rare earth materials. This integrated approach would support both production flexibility and the circular manufacturing characteristics of the HyProMag platform.

The PFS evaluated two development options, both based on modular production systems. In the first case, the plants use recycled feedstock only, using HPMS recycling of magnet scrap to produce NdFeB alloy powder, sintered magnet blocks and finished magnets. The second case envisions using recycled and primary feedstocks, with additional capital expenditure to support primary NdFeB alloy as a feedstock to produce NdFeB alloy powder, sintered magnet blocks and finished magnets.

Case 1 delivered the strongest project economics with an after-tax net present value (NPV) of $2.06-billion, an internal rate of return (IRR) of 36% and a payback period of 2.3 years, for a capital cost of $623-million, compared with Case 2's NPV of $1.8-billion, an IRR of 31% and payback period of three years, for a capital cost of $656-million.

The combined after-tax NPV range of the proposed Northlake Texas facility and the potential PFS plants is estimated between $2.6-billion and $2.8-billion.

Mkango says the PFS demonstrates robust economics and a pathway to producing higher-value NdFeB magnet products for strategically important sectors.

"The objective of the HyProMag platform has always been to demonstrate that HPMS technology can recover rare earth magnetic materials and convert them into high-performance commercial magnet products. The PFS outlines a pathway to scaling that capability through an integrated manufacturing platform incorporating magnet production, finishing and product qualification.

"Importantly, the enhanced production configuration would support the manufacture of a broader range of commercial magnet products for demanding industrial applications, while the inclusion of finishing, quality assurance and product development capabilities provides a foundation for continued product optimisation and customer qualification," concludes HyProMag founder Allan Walton.