What's Happening?
Rainbow Rare Earths is advancing its Phalaborwa rare earths project in Limpopo, aiming to establish a diversified global supply chain outside China. The project involves extracting rare earths from 35
million tonnes of phosphogypsum waste residue accumulated from over 60 years of phosphoric acid production. This method, previously discussed academically but never economically achieved, presents a cost-effective alternative to major Western hard-rock rare earths projects. The project plans to treat 2.2 million tonnes of material annually, with a projected lifespan of 16 years. Recent developments include the addition of yttrium to the mineral resource estimate, enhancing the project's strategic importance due to China's export restrictions on minerals like yttrium.
Why It's Important?
The Phalaborwa project is significant as it addresses the global need for a diversified supply chain of rare earth elements, reducing dependency on China. Rare earths are crucial for various industries, including defense, electronics, and renewable energy. The inclusion of yttrium, a mineral with rising strategic importance, further strengthens the project's value proposition. By producing a bundled product of medium and heavy rare earth elements, Rainbow Rare Earths aims to support supply-chain resilience in North America, Europe, South Korea, and Japan. This initiative could lead to increased economic stability and technological advancement in these regions.
What's Next?
Rainbow Rare Earths plans to complete the definitive feasibility study (DFS) for the Phalaborwa project next year, following a delay due to pilot plant relocation and laboratory construction. The company anticipates starting project financing negotiations in early 2026, with construction beginning in 2027 and first production targeted for 2028. Despite the DFS delay, the production timeline remains unchanged. Rainbow's operating cost estimates and projected EBITDA margins support a funding structure of two-thirds debt and one-third equity, indicating strong financial viability.
