By: African mining market

Rainbow Rare Earths Ltd. has confirmed that its Definitive Feasibility Study (DFS) for the Phalaborwa rare earths project in South Africa remains on track for completion in 2026, a key step towards construction starting the following year.

The AIM-listed company said that once the study is finished, the final permitting process will run alongside project financing, positioning it to begin building the facility in 2027.

The project aims to produce both light and heavy rare earth elements, key materials used in electric vehicles, wind turbines and defence technologies.

Rainbow said it had made strong technical progress over the year, producing a high-purity mixed rare earth product that exceeds industry standards.

Work is now underway to determine the best route for separating this into higher-value products, including neodymium-praseodymium oxide, used in high-strength magnets, and a blend of medium and heavy rare earths.

The company’s laboratory in Johannesburg is refining a process to extract rare earths from phosphogypsum, a waste material left over from fertiliser production.

Because the Phalaborwa operation involves no mining or hauling, Rainbow said it would sit at the bottom of the global cost curve, offering some of the industry’s highest potential margins.

Backing for the project includes a US$50 million equity commitment from the United States International Development Finance Corporation through TechMet, as well as support from Ecora Resources, which chose Phalaborwa for its first rare earth royalty investment.

Rainbow also highlighted progress at its Uberaba project in Brazil, which could replicate the South African model on a larger scale. The company is working with the Mosaic Company to complete an economic assessment of that site.

Chief executive George Bennett said Rainbow was continuing to explore strategic partnerships in Saudi Arabia, Morocco and Canada, and that its technology could form the basis for a scalable, environmentally responsible rare earths business.

Rainbow reported a reduced loss of US$3.3 million for the year to 30 June, down from US$4.3 million a year earlier.

The improvement was helped by a US$1.2 million fair value gain linked to the revaluation of the Ecora royalty liability, which offset financing costs and the absence of last year’s impairment charge at the Gakara project in Burundi.

The company raised US$10 million during the year, including US$8.5 million from the sale of a royalty on Phalaborwa’s future revenues and US$1.5 million from a share placing.

Rainbow ended the period with US$3.9 million in cash, and confirmed it will need to raise further investment by the end of next year.