Mkango Magnetic Materials (AIM:MKA) on Tuesday unveiled a pre-feasibility study outlining a US expansion strategy that could quadruple its planned American rare earth magnet capacity, with an estimated incremental post-tax net present value (NPV) of up to $2.06 billion.
The group develops rare earth projects and magnet recycling operations through its majority-owned HyProMag business, including the Songwe Hill project in Malawi and recycling plants in the UK, Germany and the United States.
The independent study, carried out by PegasusTSI and BBA USA, evaluates three new production plants in South Carolina, Nevada and a second Texas site, supported by a centralised Central Texas Hub, in addition to HyProMag USA's first plant at Northlake, Texas, which is already in detailed engineering with Phase 1 commissioning expected in mid-2028.
Together with Northlake, the expanded platform targets total salable material production of about 6,000 metric tons a year by 2034, roughly 4,474 tonnes above what Northlake alone would produce.
The three new plants and hub, excluding Northlake's value, carry a post-tax NPV of between $1.85 billion and $2.06 billion depending on feedstock mix, with a post-tax internal rate of return of 31% to 36% and payback of 2.3 to 3 years, based on a Class 3 capital cost estimate of $623 million to $656 million.
The study tested two configurations: one using only recycled magnet scrap through HyProMag's Hydrogen Processing of Magnet Scrap technology, and a second adding primary alloy feedstock alongside recycled material.
Combined with Northlake, the overall HyProMag USA platform carries an estimated post-tax NPV of $2.6 billion to $2.8 billion.
Northlake's own updated post-tax NPV now stands at about $723 million, down from the $797 million announced on 22 June, a reduction Mkango attributed to a later construction timetable, higher capital costs and updated operating cost assumptions aligned with the new study.
Northlake's capital cost estimate has risen to about $167 million, reflecting the phased construction approach and finalised equipment orders.
The expanded platform would lift US magnet producing capacity roughly fourfold, from about 1,048 tonnes a year of salable NdFeB magnets at Northlake to about 4,192 tonnes a year across four plants by 2034. The configuration also incorporates grain boundary diffusion capability, which Mkango said would raise the proportion of higher-grade magnet output from about 10% to 20% of total production.
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"This Pre-Feasibility Study confirms the opportunity to establish a significant domestic rare earth magnet manufacturing platform in the United States," said Julian Treger, chief executive of CoTec, HyProMag USA's joint venture partner.
Mkango chief executive Will Dawes said the study "indicates the scalability of the HyProMag business model and provides a framework for disciplined growth in the United States using HyProMag USA's first plant in Northlake."
The platform is expected to create about 300 jobs across Texas, South Carolina and Nevada, in addition to the 100 positions planned at Northlake, with the expansion strategy expected to progress to a full feasibility study at the appropriate time.