US EXIM Bank Backs HyProMag USA with $92 Million to Boost Rare Earth Magnet Production in the USA
Singapore, June 12, 2024 – In a significant boost for American manufacturing and the critical rare earth magnet supply chain, HyProMag USA, a joint venture between CoTec Holdings Corp. (TSXV:CTH)(OTCQB:CTHCF) and Mkango Resources Ltd. (AIM:MKA)(TSXV:MKA), has received a Letter of Interest for up to US$92 million from the U.S. Export-Import (EXIM) Bank. This substantial financial backing falls under the “Make More in America” initiative, signalling the US government’s commitment to reshoring vital industries and reducing reliance on foreign sources.
Why Rare Earth Magnets Matter
Rare earth magnets are essential components in a wide range of modern technologies, including electric vehicles (EVs), wind turbines, medical devices, and defense systems. Currently, a large portion of these magnets are produced outside of the United States, creating a strategic vulnerability. HyProMag USA’s project directly addresses this concern by establishing a domestic source of high-quality neodymium-praseodymium (NdPr) magnets.
The HyProMag USA Project: A Game Changer
The project involves the construction of a state-of-the-art NdPr magnet production facility in Magnolia, Arkansas. Utilizing Mkango’s proprietary hydrometallurgical process, HyProMag USA will efficiently extract and refine rare earth elements from recycled magnets and other sources. This innovative approach not only reduces reliance on mined materials but also promotes sustainability and circular economy principles. The EXIM Bank’s financing will be instrumental in covering a significant portion of the project's capital expenditures, including equipment procurement, construction costs, and working capital.
“Make More in America” Initiative & Strategic Importance
The “Make More in America” initiative, championed by the Biden-Harris Administration, aims to incentivize domestic manufacturing and strengthen U.S. supply chains. The EXIM Bank’s support for HyProMag USA aligns perfectly with this goal, fostering job creation in Arkansas and bolstering national security by ensuring a reliable supply of critical materials. This investment highlights the strategic importance of rare earth magnets and the US government’s commitment to supporting their domestic production.
Benefits for CoTec and Mkango
For CoTec Holdings Corp. and Mkango Resources Ltd., this Letter of Interest represents a major milestone. It validates the viability of the HyProMag USA project and provides a strong foundation for securing additional financing. The partnership between CoTec and Mkango combines CoTec’s operational expertise and Mkango’s technological innovation, creating a powerful synergy for success. The project is expected to generate significant economic benefits for both companies and the local community.
Looking Ahead
The Letter of Interest is a non-binding commitment, and HyProMag USA will now work with the EXIM Bank to finalize the financing agreement. With this crucial backing in place, the company is poised to move forward with construction and begin producing domestically sourced rare earth magnets, contributing to a more secure and resilient American economy. The project is expected to create hundreds of high-skilled jobs and attract further investment to the region, solidifying Arkansas’s position as a hub for advanced manufacturing.
