Name of the Project
Phalaborwa Rare Earths Project.

Location
Limpopo, South Africa.

Project Owner/s
Rainbow Rare Earths signed an agreement with phosphate mining company Bosveld Phosphates in June 2023 to ensure it obtains 100% ownership of the Phalaborwa project. 

This updates the original project co-development agreement, which envisaged Rainbow’s earning a 70% interest in Phalaborwa further to the completion of a prefeasibility study. 

Rainbow has also been granted a call option to acquire the remaining 15% of the JV owned by Bosveld, in return for $7-million of equity in the company, at any time from October 31, 2023, to December 31, 2023.

Upon completion of a definitive feasibility study (DFS), the unincorporated JV will be transferred into an incorporated JV company and, at Rainbow’s election, Bosveld will transfer all assets required for the project into that company. 

Project Description
A preliminary economic assessment (PEA) has confirmed Phalaborwa's significant potential as a low capital intensity, high-margin, near-term rare earth development project. The project has a total Joint Ore Reserves Committee-compliant mineral resource estimate of 30.4-million tonnes at 0.44% total rare-earth oxides contained within two phosphogypsum stacks, derived from historic phosphate hard-rock mining.

Rainbow Rare Earths will extract the rare-earth elements (REEs)using a proprietary continuous ion-exchange and continuous ion-chromatography plant process, developed in conjunction with K-Technologies, in the US.

The PEA, published in October 2022, is based on processing 2.2-million tonnes a year of phosphogypsum over a 14.2-year project life to deliver 26 208 t of separated magnet rare-earth oxides (REOs). The project will produce all four of the key REEs used to create permanent magnets (neodymium, praseodymium, dysprosium and terbium), and is believed to have the highest basket price of any rare earths project – $175.89/kg – outside of China, while the average processing cost is estimated at $33.86/kg.

Potential Job Creation
The project will create numerous employment opportunities during construction and an estimated 300 direct job opportunities, excluding contractors, suppliers, vendors and consultants. Priority will be given to the people in the Ba-Phalaborwa area who have the requisite skills and experience. Rainbow will give preference to local contractors and where contractors are imported from other areas, Rainbow will encourage the employment of local labour.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a 10% discount rate, of $627-million and an internal rate of return of 40%, with a payback of less than two years.

Capital Expenditure
$295.5-million.

Planned Start/End Date
Production is expected to start in 2026.

Latest Developments
Rainbow Rare Earths has said in an unaudited results statement for the six months ended December 31, that it is bullish about the potential of its Phalaborwa rare earths project, as it is expected to be the highest-margin REEs project in development, owing to its different capital and operating cost profile, compared with those of traditional projects.

The company has 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, with which it entered into an investment option agreement in November 2023.

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

It has also said that using continuous ion-exchange and continuous ion chromatography to produce separated REOs provides cost and environmental benefits, compared with traditional solvent exchange methods.

Updated bulk density calculations have increased the Phalaborwa project tonnage by about 16% and added more than 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/y to 600 000 t/y of Phalaborwa’s gypsum by-product into the South African domestic and surrounding markets, which are anticipating supply shortages of gypsum, thereby provides an additional revenue stream for Rainbow.

Key Contracts, Suppliers and Consultants
ANSTO Minerals (plant processing testwork); K-Tech Inc (REO separation technology and partner in developing plant processing flowsheet, managing the back-end of the pilot plant at its US facility); Mintek (managing plant front-end in South Africa); and METC Engineering (production of the PEA and engineering work for the DFS).

Contact Details for Project Information
Tavistock Communications, on behalf of Rainbow Rare Earths, tel +44 20 7920 3150 or email rainbowrareearths@tavistock.co.uk.