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(Sharecast News) - Mkango Resources said on Tuesday that its UK subsidiaries have secured government-backed funding to develop recycled rare earth magnets for automotive applications, as part of a consortium aimed at building a domestic circular supply chain.
The AIM-traded firm said HyProMag and Mkango Rare Earths UK were selected as winners of the UK government's DRIVE35 R&D competition, with the project, known as REACT UK, receiving 3.2m in funding, representing 49% of the total 6.5m cost over three years.
It said the initiative was supported by the Department for Business and Trade and delivered via the Advanced Propulsion Centre UK in partnership with Innovate UK.
The project would bring together a consortium including HyProMag as lead partner, Mkango Rare Earths UK, EMR Group, Jaguar Land Rover, Less Common Metals and the University of Birmingham, with the aim of establishing a full circular UK supply chain for neodymium-iron-boron magnets used in electric vehicles.
Mkango said the project would combine multiple recycling methods, including hydrogen processing of magnet scrap, to recover, refine and remanufacture high-performance automotive-grade magnets from end-of-life hybrid and electric vehicles, improving sustainability while reducing costs and strengthening supply chain resilience.
"We are very excited about this innovative project and the opportunity to accelerate development of higher grade magnets for electric drive motor applications, complementing our existing portfolio of magnet grades," said William Dawes, chief executive of HyProMag.
Nick Mann, managing director of HyProMag, added that the project would "catalyse a UK supply of magnets for automotive drive motor applications, ensuring that cost and sustainability are maximised for different performance requirements".
Mkango said its UK arm would play a key role in chemically extracting rare earth elements including neodymium, dysprosium and terbium, which would then be converted into metals and alloys before being remanufactured into new magnets within the UK supply chain.
"The REACT UK project represents a key milestone in establishing a truly integrated and resilient rare earth magnet supply chain in the UK ... laying the foundation for industrial scale-up," commented Nielson Beddoe, managing director of Mkango Rare Earths UK.
Separately, HyProMag had also secured a second grant to support feasibility studies for scaling up magnet manufacturing in the UK, with further details to be announced.
At 1510 BST, shares in Mkango Resources were up 2.96% at 41.7p.
Reporting by Josh White for Sharecast.com.
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