Highlights

• HyProMag USA secures landmark supply agreement with ILS to develop domestic rare earth magnet recycling capabilities.
• Inserma's advanced technology will enable automated separation of hard disk drive magnets at pre-processing sites in South Carolina and Nevada.
• The Dallas-Fort Worth hub aims to produce 1,557 metric tons of recycled NdFeB material annually.
• This effort supports US endeavors to decouple from Chinese supply chains.

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HyProMag USA (opens in a new tab), the U.S. rare earth magnet recycling venture backed by CoTec Holdings (opens in a new tab) (TSXV: CTH) and Mkango Resources (opens in a new tab) (AIM/TSX-V: MKA), has entered a landmark supply and site-share agreement with global electronics recycler Intelligent Lifecycle Solutions (opens in a new tab) (ILS), aiming to lock in critical NdFeB feedstock and infrastructure across South Carolina and Nevada.

Rare Earth Exchanges (REEx) was launched to develop online data tools and insights to help investors navigate the dawn of the formation of the ex-China rare earth element and critical mineral supply chains.  While recycling of rare earth elements to magnets represents only about 1% of total output today, powerful interests, including the U.S. Department of Defense, are keen on having more recycled options.

Under the agreement, ILS will source and store neodymium-iron-boron (NdFeB) magnets—primarily from decommissioned hard disk drives (HDDs)—at its Williston and Reno pre-processing sites. These locations will integrate advanced Inserma technology (opens in a new tab) to separate HDD magnets for HyProMag USA’s hydrogen-based HPMS (Hydrogen Processing of Magnet Scrap) recycling process. Feedstock will then be shipped to HyProMag’s planned Dallas-Fort Worth (DFW) manufacturing hub, which is slated to produce 1,557 metric tons of recycled NdFeB material annually within five years.

Why It Matters:

This marks the first of several expected supply agreements, positioning HyProMag USA to build a steady domestic magnet pipeline—an urgent priority as the U.S. decouples from Chinese supply. The project also directly targets the hyperscale data center market, a growing magnet scrap source, and leverages a proven UK-EU partnership among HyProMag, Inserma, and ILS dating back to the RaRE project.

What’s Confirmed:

• ILS will use R2v3-certified facilities to process feedstock
• Inserma’s “third-generation” separation units enable clean disassembly of HDDs and resale of components
• The DFW Hub will recycle up to 750 tons of NdFeB magnets per year with a carbon footprint of just 2.35 kg CO₂/kg (ISO-compliant)

Unanswered Questions:

• How scalable are these preprocessing partnerships beyond ILS? Can the companies provide data demonstrating effective scaling capability?
• Can the DFW Hub keep pace with projected feedstock and demand, especially as EV, wind, and defense needs surge?
• What incentives or policy support will HyProMag USA receive from U.S. critical mineral frameworks?

Inserma

Inserma is a Spanish engineering firm specializing in automated pre-processing systems tailored for rare earth magnet (NdFeB) recovery. With a strong foundation in metal/magnet detection, robotics, and automated sorting, Inserma has become a key technology partner in circular rare earth supply chains—especially in synergy with HyProMag’s HPMS (Hydrogen Processing of Magnet Scrap) process.

Inserma’s first-generation units were developed and successfully demonstrated in major EU-funded magnet recycling initiatives, including SUSMAGPRO and REESILIENCE. These systems enabled precise disassembly of magnet-containing components like hard disk drives (HDDs), loudspeakers, and electric motors. The REESILIENCE project (opens in a new tab) in particular involved close collaboration with HyProMag GmbH, the University of Birmingham (opens in a new tab), and other European partners, and was led by Prof. Carlo Burkhardt. (opens in a new tab)

In 2025, Inserma’s next-generation HDD separation unit—a fully automated system—was successfully tested at HyProMag GmbH’s facility in Germany, processing thousands of HDDs. The clean, high-throughput separation enabled consistent NdFeB feedstock recovery for downstream HPMS recycling at the University of Birmingham’s pilot plant.

Key Advantages:

• Automates disassembly and magnet recovery
• Reduces manual labor and processing time
• Cleanly separates circuit boards and other components for resale
• Complements short-loop, low-carbon recycling models like HPMS

Inserma’s advanced systems are now being deployed in North America through partnerships with HyProMag USA and ILS, creating scalable, regional magnet recovery infrastructure.

Investor Insight:

This deal gives HyProMag USA real traction on U.S. soil and a path to vertical integration. But scale and policy alignment remain critical. As CoTec CEO Julian Treger put it, “this is just the first step”—investors should closely watch for additional supply partnerships, financing milestones, and feedstock ramp-up.

Source: CoTec Holdings, Mkango Resources | Author: REEx Staff