Highlights

• CoTec and Mkango's joint venture HyProMag USA begins stockpiling NdFeB magnet scrap for recycling.
• Aiming to reshape U.S. rare earth supply chains.
• U.S. Department of Defense mandates non-Chinese magnet sources by 2027.
• The venture represents a critical step in domestic magnet production.
• The initiative highlights growing investment opportunities in ex-China rare earth magnet technologies and circular economy principles.

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CoTec Holdings Corp. (TSXV:CTH, OTCQB:CTHCF) and Mkango Resources Ltd. (AIM/TSXV: MKA) announced that HyProMag USA, their U.S. joint venture, has commenced stockpiling feedstock in partnership with electronics recycling firm Intelligent Lifecycle Solutions (ILS). Pre-processing is scheduled to begin before December 31, 2025, at ILS sites in South Carolina and Nevada.

On the topic of rare earth magnets yesterday Rare Earth Exchanges (REEx) released its updated global rankings of rare earth magnet manufacturers, confirming China’s overwhelming dominance with ~90% of production and exports exceeding 58,000 tonnes in 2024, while spotlighting a handful of ex-China players such as Japan’s Shin-Etsu Chemical, Germany’s VAC Group, and U.S.-based Noveon Magnetics.

With the U.S. Department of Defense mandating all defense magnets be sourced outside China by January 2027, urgency is mounting for alternatives, yet only seven companies worldwide are realistically investable today. Noveon is emerging as a key U.S. contender, aiming to expand capacity from 2,000 to 10,000 tonnes per year, while corporate initiatives like Apple’s $500 million magnet recycling deal with MP Materials underscore the strategic shift. For investors, REEx’s rankings highlight both the national security risk of concentrated Chinese control and the investment opportunity in early-stage, ex-China producers that could see major capital inflows as supply chains diversify.

HyProMag USA is ranked in the REEx Rankings as “Earlier Stage, Up & Coming”.

Why the Stockpiling Matters

HyProMag USA is deploying Hydrogen Processing of Magnet Scrap (HPMS) technology to recycle neodymium-iron-boron (NdFeB) magnets — a cornerstone material for EV motors, wind turbines, and defense systems. Stockpiling 6–12 months of feedstock before commissioning its Dallas-Fort Worth magnet recycling plant is being positioned as a milestone toward reshoring a U.S. rare earth magnet supply chain.

Julian Treger, CEO of CoTec, called the agreement “a major milestone,” emphasizing the importance of securing feedstock early. Will Dawes, CEO of Mkango, added that HPMS deployment in the U.S. will unlock domestic scrap sources and accelerate supply chain robustness.

Strategic Implications

• First mover in U.S. rare earth magnet recycling: If successful, HyProMag USA could reduce reliance on Chinese-controlled magnet supply chains.
• Traceability focus: By working with ILS, the venture highlights full product traceability, aligning with circular economy principles and future U.S. sourcing requirements.
• Investor question: How quickly can HPMS scale commercially in the U.S.? Early success could position CoTec and Mkango as critical players in domestic magnet production.

Unanswered Questions

• Feedstock certainty: How much NdFeB scrap can ILS reliably deliver, and will volumes be sufficient to sustain commercial-scale operations?
• Economic viability: Recycling costs, yield rates, and competitive pricing versus virgin NdPr supply remain undisclosed.
• Policy environment: Will U.S. industrial policy (DoD, DOE, or IRA-linked funding) support HyProMag USA’s scale-up, or is it reliant on private capital?
• Timeline risk: Pre-processing begins in 2025, but when will commercial output flow, and at what capacity?

Investors, be mindful that with magnet technology as one of America’s top experts informed REEx, “Either you are making magnets, or you are not.” And HyProMag USA has a way to go on the REEx rankings.

Conclusion

HyProMag USA’s stockpiling initiative marks a notable step forward in rare earth magnet recycling on U.S. soil. For investors, the development underscores both the promise of HPMS technology and the outstanding questions of scale, economics, and government backing. As global competition for rare earths intensifies, HyProMag USA’s progress will be closely watched.

Authors/Contacts: CoTec Holdings Corp. & Mkango Resources Ltd.

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