Mkango Resources has quietly become one of the most compelling recovery stories on the small-cap markets this year. The shares, listed on both AIM and the TSX Venture Exchange under the ticker MKA.
For anyone who has followed the company since its 2016 IPO, that performance feels long overdue. Share Talk has covered Mkango since the very beginning, and what we’re seeing now is a company finally stepping into its own identity, a technology-driven rare earths player that’s more about recycling than raw mining.
Company Overview
Mkango’s business rests on two clear foundations. The first is near-term cash flow from magnet recycling through its HyProMag subsidiaries, and the second is the longer-term upside from its rare earth mining and separation projects in Malawi and Poland. This balance between immediate industrial relevance and long-duration resource potential is what gives the company its appeal. Recycling offers proof of concept, scalability, and revenue visibility, while the mining and processing work underpins Mkango’s credentials as a genuine critical minerals player. That blend of technology and resource exposure is rare on AIM, and it’s part of the reason the market has finally woken up to the company’s story this year.
The broader context also works in Mkango’s favour. Western governments are actively trying to reduce their dependence on China for rare earth elements, and Mkango’s operations sit squarely within that shift. Its recycling arm, HyProMag, is already producing recycled magnets in the UK and preparing for commercial expansion into Germany and the United States. On the mining side, the company continues to advance its Songwe Hill project in Malawi and its Pulawy rare earth separation plant in Poland. Songwe is designed to supply mixed rare earth carbonate, while Pulawy will refine that material into separated oxides ready for use in magnets and advanced manufacturing. It’s a joined-up approach that allows Mkango to address both the immediate need for recycled materials and the longer-term requirement for independent raw supply, and that dual focus has become increasingly important in today’s geopolitical climate.
The Recycling Engine – HyProMag
HyProMag’s breakthrough comes from a process called Hydrogen Processing of Magnet Scrap (HPMS), developed at the University of Birmingham, UK and now licensed exclusively to Mkango. It’s a straightforward but clever approach that uses hydrogen to extract and demagnetise rare earth magnets from end-of-life electronics and electric motors. What makes HPMS so important is its efficiency. It produces a clean alloy powder that can be fed directly back into new magnet production and achieves a significantly lower carbon footprint than mining and refining virgin material. In a world focused on energy transition and supply chain independence, that kind of technology matters.
At the Tyseley Energy Park facility in Birmingham, HyProMag has already moved from pilot stage to early commercial output. The site achieved its first production runs in 2025 and targets between 100 and 350 tonnes per year of recycled magnet alloy once steady state is reached. The German operation in Pforzheim is expected to follow by late 2025, and the US facility, developed in partnership with CoTec Holdings, is in detailed design with commercial rollout planned for 2027.
Mkango and its partners have already produced thousands of recycled magnets at pilot scale and are supplying samples to automotive and electronics manufacturers for testing. It’s a clear sign that the company has moved well beyond the research phase. Mkango is no longer a mining story waiting for permits, it’s a recycling and manufacturing business taking shape in real time, and that’s exactly what the market has started to recognise this year.
Mining Projects
Songwe Hill – Long-Term Supply
On the mining side, the Songwe Hill project in Malawi remains the company’s flagship development. The feasibility study, completed in 2022 and now being updated, outlines a plan to produce mixed rare earth carbonate on site. The first five years of output are expected to include 1,953 tonnes per year of neodymium and praseodymium oxides, and 56 tonnes per year of dysprosium and terbium oxides. Environmental and social approvals have already been secured, and a Mining Development Agreement was signed with the Government of Malawi in 2024. Songwe has since been designated a Strategic Project under the EU Critical Raw Materials Act, which signals strong policy support and could open the door to funding partnerships.
It’s also worth noting the recent news from Malawi. An Executive Order in late October 2025 restricted exports of unprocessed minerals, but Mkango clarified that its product, a processed carbonate, is unaffected. This highlights the importance of producing value-added materials within the country and shows that Mkango is aligned with local regulatory direction.
Pulawy – Adding Refining Capability
The Pulawy separation facility in Poland is a crucial part of Mkango’s long-term plan to build a complete rare earth supply chain within Europe. The plant is designed to process mixed rare earth carbonate from the Songwe Hill project in Malawi, along with recycled feed from HyProMag, into separated rare earth oxides. It’s being developed inside the Pulawy chemical industrial zone, next to the large Grupa Azoty Pulawy complex, giving it direct access to established infrastructure, utilities, and transport links. This location is one of its biggest advantages, it keeps capital costs lower and makes commissioning more straightforward than starting from scratch. The project is supported by Mkango’s technical partner, Carester, a French rare earth specialist with decades of experience in solvent extraction and refining processes.
Pulawy has been recognised as a Strategic Project under the EU’s Critical Raw Materials framework, confirming its importance to Europe’s efforts to reduce dependence on China for separated rare earth oxides. When fully developed, it could become one of the first industrial-scale facilities in Europe capable of producing neodymium, praseodymium, dysprosium and terbium oxides entirely within the EU. Work continues on refining the process design and funding structure, but Pulawy already gives Mkango a strategic edge. It connects the company’s mine at Songwe Hill with downstream refining in Europe and recycling operations in the UK and Germany, creating a joined-up, Western-based supply chain for one of the most strategically sensitive materials in modern industry.
Financial Position
Mkango remains pre-revenue in accounting terms, although HyProMag has started limited production and begun supplying magnet samples to potential customers as it transitions toward commercial sales. At 30 June 2025, the group reported US$1.21 million in cash and total assets of US$13.24 million, supported by its investment in HyProMag and its international project portfolio. The six-month loss of US$3.66 million reflects ongoing development activity rather than operational weakness, exactly what you’d expect from a company in the build-out phase of several industrial projects at once. The second half of 2025 has already seen further inflows from warrant exercises, while the completion of a £3 million private placement in October 2025 has strengthened liquidity heading into 2026.
The accounts also show a lean cost base and a relatively modest liability structure for a business with such a broad footprint. Current liabilities stood at around US$5.4 million at the end of June, with most of this relating to payables and financing instruments rather than structural debt. This gives Mkango room to manoeuvre as it seeks project-level funding and potential strategic partnerships. While still operating at a loss, the balance sheet remains intact, and the company has shown a consistent ability to raise funds without excessive dilution. For investors, that discipline is reassuring, it shows management are building an operating company rather than simply funding exploration or waiting for the next equity raise.
Strategic Relevance in the Current Market
The timing of Mkango’s progress could hardly be better. The rare earths market has become a central theme in the ongoing trade tensions between the United States and China. In October 2025, Beijing widened its export controls to include key magnet manufacturing technologies and specific alloys, a move seen as part of a broader strategy to retain control over the global supply chain for critical minerals. The United States responded quickly, signalling new tariff measures and fast-tracking funding for domestic and allied production through the Department of Energy’s Critical Materials Program. The effect was immediate. Magnet exports from China dropped sharply, and Western policymakers began prioritising near-term recycling and midstream separation projects that could help reduce dependence on Chinese imports.
For a company like Mkango, this shifting backdrop represents a major tailwind. With HyProMag already producing recycled alloy in the UK and expansion plans underway in Germany and the United States, the company is directly aligned with the West’s push to secure localised magnet supply. Meanwhile, the Songwe Hill and Pulawy projects provide the foundation for longer-term, mine-backed independence in raw material sourcing. It’s a combination that few others can match, a business model that blends immediate circular-economy relevance with strategic leverage in a sector now viewed as essential to national security. In short, Mkango is building precisely the kind of integrated rare earth platform that governments are now willing to support.
Risks and Challenges
Every small-cap investor knows that big growth stories carry risks, and Mkango is no exception. The most immediate challenge is execution. Scaling from pilot to commercial production is rarely smooth, and while HyProMag’s HPMS process is proven, the company still needs to show it can deliver consistent quality and volume over extended runs. Early batches from the Tyseley Energy Park facility have met specification targets, but proving repeatability and securing customer validation will be key steps through 2025 and 2026 as production ramps up.
Feedstock supply is another factor to watch. HyProMag’s success depends on steady magnet scrap inflows, a market still developing across Europe and North America. Partnerships with recyclers such as ILS and the acquisition of Inserma pre-processing units in the US are smart steps, but it will take time to build the networks needed for large-scale, predictable feedstock supply.
Financially, Mkango still relies on external capital. The £3 million raise in October 2025 strengthened its cash position, but further project-level funding will likely be required for Pulawy and HyProMag’s US expansion. The company has so far avoided excessive dilution, a notable achievement for a business at this stage, but maintaining that balance will depend on access to strategic or institutional finance.
Operating in Malawi also brings challenges, from logistics to regulatory shifts, though the government’s stance remains supportive. It recently reaffirmed Songwe Hill’s status as a Strategic Project and confirmed through Executive Order No. 2 that Mkango’s processed rare earth carbonate exports are unaffected by policy changes.
Overall, Mkango’s risks are manageable and typical of a company transitioning from development to early production. Execution and funding discipline will determine whether the company can deliver on the promise now reflected in its share price.
Outlook for 2026
The next twelve months will be critical. The market will want to see HyProMag’s UK plant achieve consistent production runs, the German facility reach commissioning, and real progress on the US project design. On the mining side, investors will be watching for engineering milestones at Songwe and any update on the Pulawy refinery. There’s also potential upside from the planned Nasdaq listing of Mkango’s upstream assets through a merger with Crown PropTech, which could provide new funding options and a clearer structure for each business stream.
Investor Reflection
Mkango’s transformation has been remarkable. For years, it was viewed as a small African exploration story, but that description no longer fits. Today, it’s a company that’s producing recycled magnets in the UK, advancing a multi-country industrial rollout, and aligning perfectly with Western governments’ critical mineral strategies. The share price performance has been spectacular, and while that means expectations are now high, the opportunity remains substantial if Mkango can deliver on its execution roadmap.
For retail investors who have followed this story since 2016, it’s a moment of validation, and perhaps the start of Mkango’s next phase as a genuine participant in the global rare earth supply chain.
Disclaimer: The information presented in this article represents the opinions and research of the author and is provided for informational purposes only. It is not intended to be, nor should it be interpreted as, financial, investment, or legal advice. Investors are encouraged to perform their own due diligence and consult with qualified financial advisors before making any investment decisions. Investing in small-cap stocks involves significant risks, and past performance is not indicative of future results. The author and publisher are not liable for any financial losses or actions taken based on the content of this article.
