Mkango Magnetic Materials has agreed to acquire the remaining 10% of HyProMag Germany for approximately €1.22 million, consolidating ownership of its German rare-earth recycling subsidiary as the company advances commissioning of its magnet recycling and manufacturing facility in Pforzheim.
The transaction will be completed through Mkango subsidiary HyProMag UK, which is purchasing the interest from founding shareholder Professor Carlo Burkhardt. The Pforzheim operation was designated a Strategic Project under the EU Critical Raw Materials Act.
The acquisition forms part of Mkango’s strategy to develop an integrated European rare-earth supply chain encompassing recycling, magnet production, mineral development and refining.
Share and Cash Consideration for Remaining Interest
The agreed consideration is £1.06 million, equivalent to approximately €1.22 million at an indicative exchange rate of £1 to €1.15.
Around €872,000 will be settled through the issue of 2,569,152 new Mkango shares at 29.5 pence per share, based on the company’s closing AIM share price. The remaining approximately €347,000 is payable in cash when the Pforzheim plant is commissioned or by the end of the year, whichever occurs first.
The agreement follows the conversion of an existing loan to HyProMag Germany into equity, which raised HyProMag UK’s ownership to 90%. Completion of the latest transaction will increase that holding to 100%.
Mkango owns 79.4% of Maginito, the holding company that controls HyProMag UK. Its effective economic interest in HyProMag Germany will therefore increase from 71.5% to 79.4%. The remaining 20.6% of Maginito is held by CoTec Holdings, which is contributing cash to the transaction on a proportional basis. Completion remains conditional on final acceptance by the TSX Venture Exchange and execution of the required notarised share-transfer agreement in Germany.
Pforzheim Facility Uses Hydrogen-Based Magnet Recycling
The German plant is based on Hydrogen Processing of Magnet Scrap (HPMS), a patented technology developed at the University of Birmingham. The process uses hydrogen to break down end-of-life neodymium-iron-boron magnets into reusable magnetic material for the production of new magnets and alloys.
HPMS differs from conventional chemical recycling methods that separate individual rare-earth elements. Instead, it provides a shorter processing route that can recover magnetic material for reuse without necessarily converting it into separated rare-earth oxides. The approach could offer benefits in processing efficiency, energy consumption and material recovery, although its industrial performance will depend on operating conditions and feedstock quality.
The Pforzheim facility has completed initial commissioning runs of its HPMS reactor. Other processing and manufacturing equipment is also progressing through commissioning.
Once fully operational, the plant is expected to have initial annual production capacity of approximately 100 tonnes of neodymium-iron-boron magnets and alloys. Mkango plans to raise capacity to around 350 tonnes per year by operating multiple shifts. An additional expansion to 750 tonnes annually is under evaluation. The site has permission for production at that level, but the higher figure remains a development target rather than demonstrated output.
EU Strategic Project Designation Supports Policy Positioning
HyProMag Germany received Strategic Project status under the EU Critical Raw Materials Act, recognising the operation’s potential contribution to European access to critical materials and placing it within the EU framework for supporting domestic extraction, processing and recycling.
Rare-earth permanent magnets are used in electric vehicles, wind turbines, industrial automation, robotics, aerospace equipment and defence applications. European manufacturers remain reliant on international supply chains for rare-earth separation, metal production and magnet manufacturing, with China holding a dominant position across several stages.
The Critical Raw Materials Act sets a benchmark for the EU to develop recycling capacity equivalent to at least 25% of annual consumption of strategic raw materials by 2030. Recovering rare-earth materials from existing industrial products could contribute to this objective and reduce demand for some imported primary materials. Strategic Project recognition can provide access to coordinated administrative support and financing channels. It does not, however, guarantee project funding or commercial success. HyProMag’s immediate requirements include completing commissioning, securing adequate magnet scrap supplies and qualifying its products with industrial customers.
German Recycling Operations Use Complementary Processes
Pforzheim complements Mkango’s Remloy operation in Bitterfeld, another German rare-earth recycling business within the group’s portfolio.
Remloy uses melting technology to process end-of-life magnets into neodymium-iron-boron alloy powders for bonded and hot-deformed magnet markets. HyProMag’s HPMS process targets the production of sintered magnets, giving the two facilities different but complementary roles in the recovery and manufacture of magnetic materials.
Mkango is also developing additional processing routes through its UK recycling activities, including technologies intended to recover rare-earth carbonates and oxides from magnet scrap. The group’s wider portfolio includes the proposed Puławy rare-earth separation plant in Poland and the Songwe Hill rare-earth mining project in Malawi. Both have received Strategic Project recognition under the EU framework.
Songwe Hill and Puławy could provide additional sources of primary rare-earth materials and separation capacity alongside recycled production in Europe. However, the projects remain at different development stages and require further financing, technical execution and commercial arrangements before they can become part of an integrated supply chain.
Scrap Availability and Product Qualification Shape Commercial Ramp-Up
The development of an industrial rare-earth recycling business depends on securing consistent supplies of suitable feedstock, achieving economic recovery rates and producing materials that meet customer specifications.
Potential scrap sources include manufacturing waste, discarded industrial motors, electric-vehicle components, wind turbines and other equipment containing permanent magnets. Access to these materials requires supply relationships with manufacturers, dismantling companies, waste processors and specialised collection networks.
Recovered magnets can vary in composition and condition, making sorting, traceability and quality control important to maintaining consistent production. Long-term scrap supply agreements will therefore be a key consideration as HyProMag develops its operations. The company must also demonstrate the performance of its recycled magnets, including magnetic strength, consistency, durability and suitability for specific industrial applications.
Mkango has reported discussions with prospective customers for recycled alloy powders and magnets. However, the acquisition announcement does not establish new binding offtake volumes or confirm sustained commercial production. The Pforzheim plant’s commercial progress will depend on moving beyond commissioning and trial runs to recurring sales supported by reliable feedstock supplies and qualified customers.
