  We show how entanglement between two conduction electrons is generated in the
presence of a localized magnetic impurity embedded in an otherwise ballistic
conductor of special geometry. This process is a generalization of
beam-splitter mediated entanglement generation schemes with a localized spin
placed at the site of the beam splitter. Our entangling scheme is unconditional
and robust to randomness of the initial state of the impurity. The entangled
state generated manifests itself in noise reduction of spin-dependent currents.
