The two firms have also signed an exclusive lease option agreement for a site at Pulawy in Poland.
Located within a Polish Special Economic Zone, the site is adjacent to Grupa Azoty’s fertiliser and chemicals complex.
The new plant is expected to produce 2,000 tonnes per annum (tpa) of separated neodymium/praseodymium oxides. It will also produce 50tpa dysprosium and terbium oxides in a heavy rare earth-enriched carbonate.
The partners are also looking to produce lanthanum cerium carbonate at the proposed plant.
Mkango expects the production from the proposed rare earth separation plant to strengthen the security of rare earth supply in Europe.
A vital component of magnets, rare earth metals are used in electric vehicles, wind turbines and other green technologies.
Mkango Poland country director Jarosław Pączek said: “This is a very exciting development for Poland at a time when Europe is focused on strengthening supply chains for critical materials and transitioning to a greener economy.
“The creation of a new European hub for rare earth at the heart of central Europe in Poland complements battery, electric vehicle and renewable energy developments in the region, with a site strategically located for European trade and transport routes and benefiting from plug-and-play access to reagents and utilities.”
Moreover, the plant will receive sustainably sourced, purified mixed rare earth carbonate from Mkango’s Songwe Hill operations.
The Canadian firm is also assessing other synergies to process feeds.
Mkango CEO William Dawes said: “Our integrated ‘mine, refine, recycle’ strategy, encompassing sustainably sourced light (NdPr) and heavy (Dy/Tb) rare earth from Malawi and rare earth magnet (NdFeB) recycling in the UK, via our interest in HyProMag, is now enhanced by the opportunity to create a rare earth separation and downstream hub in Poland, working with one of Europe’s largest chemical and fertiliser companies.”