Rainbow Rare Earths is bullish about the potential of its Phalaborwa rare earths project in South Africa, as it is expected to be the highest margin rare earth elements (REEs) project in development owing to its different capital and operating cost profile compared to traditional projects, CEO George Bennet says in an unaudited results statement for the six months ended December 31.

“Phalaborwa is a unique project in the rare earths space. Due to the fact that it is focused on the reprocessing of phosphogypsum stacks to recover rare earths, it has a fundamentally different cost profile to traditional mining projects, and it is therefore expected to be the highest margin rare earth project in development today,” he comments.

He points out that the company received support from the US government for the project during the period under review, with a $50-million funding commitment from the Development Finance Corporation announced at COP28, to be invested through TechMet.

Rainbow in November 2023 entered into an investment option agreement with TechMet.

“We are also excited about the prospects for the Uberaba phosphogypsum project, in Brazil, which is being developed in partnership with Mosaic. Initial test work to date has been encouraging and the project is of a significantly larger scale than Phalaborwa.

Furthermore, the addition of Uberaba adds geographical diversification to our portfolio and is in line with our aspiration to be a forerunner in the establishment of an independent and ethical supply chain of the REEs that are driving the green energy transition,” Bennet explains.

The successful production of about 35 kg of mixed rare earth carbonate at the front-end pilot plant in South Africa is being used as feed for the back-end pilot plant in Florida, in the US, to produce separated rare earth oxides (REOs) expected in second quarter 2024.

Rainbow posits that Phalaborwa offers environmental advantages owing to the clean-up of legacy issues and the  opportunity to fully rehabilitate the site over time.

It adds that the use of continuous ion exchange and continuous ion chromatography to produce separated REOs also provides cost and environmental benefits over traditional solvent exchange methods.

Updated bulk density calculations have increased the Phalaborwa project tonnage by about 16% and added over two years to project life; an update to the Joint Ore Reserves Committee-compliant resource is expected in the second quarter.

A letter of intent entered into for an offtake agreement to sell about 400 000 t to 600 000 t of Phalaborwa’s gypsum by-product yearly into the South African domestic and surrounding markets, which are anticipating supply shortages of gypsum, thereby provides an additional revenue stream to Rainbow.

A strategic supply agreement was entered into with Less Common Metals, the only rare earth metal and alloy manufacturing facility in the UK and one of the only facilities in the Western world.

A memorandum of understanding was entered into with The Mosaic Company with regard to the Uberaba phosphogypsum project.