Exclusive: HyProMag USA maps three new magnet plants to quadruple U.S. capacity

 HyProMag USA, a rare earth magnet recycler, is set to unveil plans for three new U.S. plants that would roughly quadruple its planned magnet output, and expects to rely largely on project finance to fund them, Investing.com has learned.

An independent pre-feasibility study by PegasusTSI and BBA USA, which the company is due to announce, puts the capital cost of the expansion at about $623 million to $656 million. 

It estimates a post-tax net present value of $1.85 billion to $2.06 billion and a post-tax internal rate of return of 31% to 36%. The study assessed two scenarios, with one using only recycled magnet scrap and the other also processing primary alloy.

Julian Treger, chief executive of CoTec Holdings (TSXV: CTH) and a director of HyProMag USA, told Investing.com that “it is too early stage to comment on the financing structure of the CapEx, but it will most likely include a large project finance component similar to the financing of Plant 1.” 

He added that later stages could be partly funded from the first plant’s free cash flow and that the modular design allows financing to be assessed plant by plant.

HyProMag USA previously received a letter of interest from the U.S. Export-Import Bank for its first facility, and Treger said it continues to evaluate government financing and support programs.

The new plants, in South Carolina, Nevada and a second Texas location, would feed a central finishing hub next to the company’s first facility in Northlake, Texas. 

Together, the four sites are expected to lift annual output of salable neodymium-iron-boron magnets to about 4,192 metric tons by 2034, from about 1,048 tons at Northlake alone. Northlake’s first phase is due to be commissioned in mid-2028.

No offtake agreements have been signed, although “the company has received multiple letters of support and is in active discussions with several off-takers and prospective customers,” Treger said, adding that sample magnets are being prepared and provided for verification.

HyProMag USA is a 50:50 joint venture between CoTec and HyProMag Limited, which is majority-owned through Maginito by Mkango Magnetic Materials (AIM: MKA). The company expects to move to a full feasibility study in 2027.