Pulawy rare earth separation plant


On June 7, 2021, Mkango announced that Mkango and Grupa Azoty Zakłady Azotowe ”Pulawy” S.A. (“Grupa Azoty PULAWY”) (together the “Parties”) have agreed to work together towards development of a rare earth separation plant (the "Plant”) in Poland. 

A new Polish wholly owned subsidiary of Mkango, Mkango Polska, has been established and a highly experienced Country Director for Poland, Dr Jarosław Pączek, has been appointed, together with rare earth separation experts, Carester, and a strong team of technical advisors and engineers. 

Grupa Azoty PULAWY (Warsaw Stock Exchange: ZAP) is part of The Grupa Azoty Group, the European Union’s second largest manufacturer of nitrogen and compound fertilizers, and a major chemicals producer. Its products are exported to over 20 countries around the world, including Europe, the Americas and Asia.

The Parties have signed an exclusive lease option agreement for a site adjacent to Grupa Azoty PULAWY’s large scale fertiliser and chemicals complex at Pulawy in Poland, which provides excellent infrastructure, access to reagents and utilities on site, and an attractive operating environment, resulting in a highly competitive operating cost position for the Plant, based on scoping studies to date. 

Located within a Polish Special Economic Zone, the site provides excellent access to European and international markets. Production from the Plant will strengthen Europe’s security of supply for rare earths, used in electric vehicles, wind turbines and other green technology and strategic applications, and aligns with European initiatives to create more robust, diversified supply chains. 

Benefits to Mkango Group

Development of the Plant is expected to bring significant benefits to the Mkango group: 

  • Higher value-added products with increased margins – targeting 2,000 tonnes per year of separated neodymium (Nd) / praseodymium (Pr) oxides, and 50 tonnes per year dysprosium (Dy) and terbium (Tb) oxides in a heavy rare earth enriched carbonate
  • Greater integration – plant development fully underpinned by sustainably sourced, purified mixed rare earth carbonate from Mkango’s Songwe Hill operations, with other synergies being evaluated
  • Increased marketing flexibility with a broader range of potential customers – future opportunities to produce and market separated heavy rare earths 
  • Catalyst for regional growth and the green transition – potential for further downstream developments and related businesses, including renewables, creating additional jobs in the region

Feasibility studies for the Plant are being undertaken in parallel with Mkango’s Songwe Hill rare earths project in Malawi and other opportunities, including Mkango’s interest in HyProMag Limited, which is developing production of short loop recycled rare earth magnets in the UK.

Pulawy Rare Earths Separation Plant

The Plant is expected to initially produce approximately 2,000 tonnes per year of neodymium, praseodymium and / or didymium (NdPr) oxides as well as a heavy rare earth enriched carbonate, containing approximately 50 tonnes per year dysprosium and terbium oxides. It is also expected to produce lanthanum cerium carbonate. Mkango is evaluating marketing and processing options for the heavy rare earth enriched carbonate and lanthanum cerium carbonate. The Plant will use best-in-class, conventional and proven technology, and will benefit from excellent rail and road infrastructure as well as the direct supply of the required processing reagents from Grupa Azoty PULAWY. It will also have access to a local skilled workforce, on-site engineering and project development expertise and R&D science institutes. 

Based on scoping studies undertaken to date, the Plant is expected to have highly competitive operating costs. 

Feasibility Studies and Technical Team

Extensive scoping studies and due diligence has been completed to date on the Plant site. Further feasibility studies will be completed by Carester, SENET (a DRA Global Group Company) and a local engineering firm, Prozap, together with support from Grupa Azoty PULAWY. The Carester team has extensive operating and advisory experience in rare earth separation at industrial scale, and will also provide ongoing technical support during construction and operation of the Plant. Mkango is also working closely with ANSTO to optimise feed specifications for the Plant.

Mkango will also be supported by its Chief Technical Advisor, Mike Vaisey, formerly Vice President, Research and Technology, for Lynas Corporation. Mr Vaisey has 25 years of international experience in the mining and chemical industries, in senior operational and technical development roles, with a track record of successful technology commercialisation.

Development of the Plant is expected to be underpinned by the sustainable supply of a purified mixed rare earth carbonate from Mkango’s Songwe Hill project in Malawi. Mkango will also evaluate the potential to process third party feeds.

The feasibility studies for the Plant will run in parallel with those for the Songwe Hill rare earths project. 

The Company will seek to maximise the renewable energy content and minimise the carbon impact of the developments in both Malawi and Poland, as part of the feasibility studies.

Environmental and Social Benefits

In addition to synergies with the existing operations, the Plant is expected to bring significant benefits to Poland and the EU, including additional jobs and potential for further downstream value-added developments. It is also expected to support the development of a more robust supply chain for rare earths in Europe and other markets, catalysing the green transition globally. 

Sustainability is integral to Mkango’s vision and the Company intends to implement robust sustainability policies in Poland to support the Company’s ethos of actively engaging with local communities as well as implementing and supporting community-based initiatives.  

Mkango Polska

Mkango has established a Polish subsidiary, Mkango Polska, to develop the Plant and investigate other business opportunities in Poland. The Company has appointed Dr Jarosław Pączek as Country Director for Poland and to support the Company’s growth in the region. Dr Pączek has been appointed to the board of Mkango Polska.

Dr Pączek holds a PhD in law and is a corporate financier by training. Over his career in private equity, he led teams on many high-profile projects and has sourced and managed transactions in many different industries and geographies. Prior to his career in private equity, Dr. Pączek gained experience as the deputy general director of the largest Polish mobile phone operator and as a lawyer working for Hogan and Hartson, a Washington based law firm. Amongst his various affiliations he is a member of the Chartered Institute of Securities and Investment and a Fellow of the Chartered Institute of Arbitrators.

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