Projects

The Phalaborwa Rare Earths Project, located in South Africa, has a total JORC compliant Mineral Resource Estimate of 35.0 Mt at 0.44% TREO contained within phosphogypsum in two unconsolidated stacks derived from historic phosphate hard rock mining. Rainbow’s process will deliver separated rare earth oxides through a single hydrometallurgical plant on site, with a focus on the recovery of neodymium (“Nd”), praseodymium (“Pr”), dysprosium (“Dy”) and terbium (“Tb”). These are critical components of the high-performance permanent magnets used in electric vehicles, wind turbines, defence and exciting new markets such as robotics and advanced air mobility.

The Phalaborwa updated interim economic study (“Interim Study”) has confirmed strong base line economics for the project, which has a base case NPV₁₀ of US$611 million. Given Phalaborwa is a chemical processing operation, with its resource sitting at surface in a chemically cracked form, it has a much lower operating cost than traditional rare earth mining projects, and it is therefore estimated to be the highest margin rare earth project in development today outside of China.

The Interim Study is based on a project life of 16 years, processing an average of 2.2 Mt of phosphogypsum per annum. With an overall recovery rate of magnet REE of ca. 65%, based on the pilot campaign undertaken in 2023 to 2024, the project is expected to produce ca. 1,900 t magnet REO production annually.

A process flowsheet to extract rare earth elements from the phosphogypsum stacks has been developed by Rainbow and has been subject to extensive testwork: read more in a Technical Update published September 2024.  The flowsheet comprises hydraulic reclamation of the gypsum, which is processed through a simple hydrometallurgical plant to recover the rare earths and produce a high grade rare earth feed stream for the separation process.  The separation process utilises continuous ion exchange (“CIX”) and continuous ion chromatography (“CIC”), which has efficiency and environmental benefits over the solvent extraction methodology traditionally used for rare earth separation.

Rainbow is currently in the process of preparing a definitive feasibility study (“DFS”) for the project, following which financing and construction will commence. The project has been identified by the U.S. Government as an important contributor to REE supply chain independence, with the U.S. International Development Finance Corporation’s proposed investment of US$50 million for Phalaborwa, via TechMet, as announced at the U.N.’s Climate Change Conference, COP28.

Preliminary economic assessment demonstrates robust economics

A preliminary economic assessment released in October 2022 demonstrated strong economics for the project, which is expected to have a lower capital intensity and operating cost base than traditional rare earth mining projects. The updated Interim Study released in December 2024 confirmed that the project economics remain robust despite two years of inflation totalling ca. 12% since publication of the PEA and modifications to the flowsheet.

Base case project economics as per the Interim Study¹

Life of operation	Years	16
Phosphogypsum processing	Mtpa	2.2
Production of separated magnet rare earth oxides	t	1,865
Average operating costs	US$/kg	40.83
Average EBITDA operating margin	%	70%
Capital costs	US$m	326.1
Post-tax NPV10	US$m	610.9
Post-tax IRR	%	38
Payback period	Years	2.0

¹ The figures in the Interim Study are based on the same basket price used in the 2022 PEA for comparability purposes (based on spot prices at that time), being US$136.20/kg Magnet REO produced based on the updated resource (US$110/kg Nd, US$112.50/kg Pr, US$340/kg Dy and US$1,875/kg Tb).

Rainbow intends to deliver separated rare earth oxides with over 99% purity from the leach solution. Phalaborwa will be unique in producing separated Nd, Pr, Dy and Tb oxides on site.  This will allow the full value of the rare earths to be realised, representing a 47% increase in revenue over the expected sales price for a mixed rare earth carbonate.

Phalaborwa’s operating cost is considerably lower than traditional rare earth projects as the phosphogypsum material is already sitting at surface in a chemically cracked form, which eliminates the cost and risk of mining, hauling, crushing, grinding, flotation and cracking. This favourable profile positions Phalaborwa as the highest margin rare earth project in development today outside of China, using data compiled by industry consultants Argus.

Process flowsheet development and confirmation

Historically, the extraction of rare earths from phosphogypsum has proven technically, environmentally and economically challenging. However, Rainbow has developed a process flowsheet at Phalaborwa, underpinned by comprehensive test work, which successfully delivers an overall recovery of between 65% to 70% of the contained rare earths. This compares very favourably to the overall recovery of separated rare earth oxides via standard processes. Importantly, the process employs standard, proven equipment and readily available reagents in a novel combination.

The leach flowsheet as published in the project PEA in October 2022 incorporated a number of important processes including phosphogypsum washing, multiple stages of acid leaching, fluoride removal via CIX, rare earth precipitation, a sulphuric acid agitated bake and water leach to produce a high-grade REE stream for separation.

The leach flowsheet has been subject to an extensive programme of bench scale and pilot plant leach test work conducted at the Johannesburg facilities of Mintek, aimed at supporting a DFS for the project. This work has confirmed the efficacy of a much simpler flowsheet, paving the way for the first commercial recovery of magnet REE from phosphogypsum.

This diagram shows the original flowsheet adopted for the PEA, with the coloured blocks representing the processes and circuits that have now been eliminated. The updated flowsheet forms the basis of the Interim Study economics released in December 2024.

Following leaching of the phosphogypsum, the concentrated rare earths solution is upgraded using a CIX and CIC process to deliver high-purity oxides of the target magnet rare earths, namely Nd/Pr, Dy and Tb.

CIX and CIC have both been applied commercially in multiple applications since their development in the 1980s. These processes are now found globally in the food, biotech, chemical, water treatment, pharmaceutical and mining industries. Several of these industrial installations are found in South Africa.

The CIX/CIC process has several economic and environmental advantages over the conventional solvent extraction (“SX”) route:

• Safer and more environmentally responsible
• Reduced capital and operating costs due to a simplified flowsheet / plant process and smaller footprint
• Fast, efficient and precise extraction of trace quantities of target materials from high volume streams

By contrast, SX has the following characteristics:

• Uses toxic and flammable solvents and diluents
• Typically requires hundreds of separate stages
• Large footprint

See further detail on the processing flowsheet development.

Separation test work is currently ongoing at Rainbow’s dedicated in-house laboratory facilities in Johannesburg, South Africa to finalise the flowsheet and economics, with the team currently working on the removal of impurities from the REE intermediate product via ion exchange to deliver a high purity mixed REE feed for separation. The CIX/CIC separation process is expected to deliver a +99% purity neodymium Nd/Pr oxide ahead of separated Dy and Tb oxides.

The team will also evaluate the economics for separation of the SEG group (samarium, europium and gadolinium), lanthanum (“La”) and cerium (“Ce”). The potential revenue from these non-magnet REE is not included in the headline economics set out in the Interim Report.  Rainbow also expects to generate revenue from the sale of processed phosphogypsum, which has also been excluded from the Interim Report to ensure comparability with the 2022 PEA. Rainbow will provide updates as the separation work progresses in 2025.

Recovery of rare earths from phosphogypsum expected to be lower cost than traditional rare earth projects

With a substantially higher NdPr grade than a typical low-cost ionic clay rare earth project, Phalaborwa’s grade is closer to that of traditional hard rock style deposits.

Project	Style	Owner	TREO 3 %	NdPr ppm	Uranium ppm	Thorium ppm
Phalaborwa 1	Gypsum stacks	Rainbow Rare Earths	0.44%	1.257	2	47
Round Top 2	Ionic Clay	US Rare Earths/TMRC	0.063%	39	45	179
La Paz 2	Ionic Clay	American Rare Earths	0.047%	80	1	7
Makuutu 2	Ionic Clay	Ionic Rare Earths	0.08%	232	10	30
Mount Weld 2	Hard rock	Lynas Rare Earths	7.90%	18,833	30	750
Bear Lodge 2	Hard rock	Rare Element Resources	3.08%	7,059	113	472
Longonjo 2	Hard rock	Pensana plc	1.43%	3,170	29	967
Nolan’s Bore 2	Hard rock	Arafura Resources	2.60%	6,859	191	2,700
Norra Karr 2	Hard rock	Leading Edge Materials	0.50%	701	8	16
Lofdal 2	Hard rock	Namibia Critical Metals	0.32%	181	18	350

Footnotes
1.  Based on Mineral Resource Estimate announced on 20 March 2023
2. Based on public disclosure from owner
3. TREO includes Y₂O₃

Historical processing at Phalaborwa, including initial flotation by Foskor followed by further processing in Sasol’s phosphoric acid plant, deposited a gypsum residue with upgraded rare earth elements in the stacks. With the rare earth elements already in a chemically ‘cracked’ form, Rainbow’s process allows them to be recovered from a single hydrometallurgical processing plant. 

The economics of Phalaborwa are driven by a much lower cost base as this unique project excludes many of the usual energy intensive steps associated with a traditional hard rock mining project, including:

• There is no requirement for hard rock mining, including waste stripping, which usually represents a large proportion of the cost base for a traditional hard rock mine
• The cost of hydraulic reclamation of the gypsum stacks is instead comparable to the cost of feeding a processing plant from an ore stockpile
• There is no cost associated with crushing and grinding ore, which normally forms a substantial part of the energy use and processing costs for a traditional hard rock mine
• Due to the chemically cracked nature of the REE on the gypsum stacks, Phalaborwa will not incur costs associated with producing a mineral concentrate which requires chemical cracking in a dedicated plant before feeding into a separation plant

Typical unit processes	Typical rare earths project	Phalaborwa
Hard rock mining and hauling	✓
Hydraulic transport to plant		✓
ROM stockpile	✓
Crushing and milling (energy)	✓
Multi-stage flotation (energy and reagents)	✓
Concentrate filtration	✓
Gangue acid leaching at some projects (reagents)	✓
Cracking (energy and reagents)	✓
Rare earth dissolution (leaching)	✓	✓
Thorium and uranium removal	✓
Impurity removal and intermediate products	✓	✓

An environmentally sound opportunity

Phalaborwa has very low levels of radioactive elements, setting it apart from typical rare earth development projects, which require complex processing to remove higher levels of radioactive elements.

By re-processing “waste” material at Phalaborwa, Rainbow has the opportunity to significantly reduce environmental liabilities by redepositing clean, benign gypsum on a new lined stack, according to IFC / Equator Principles standards. Water neutralisation test work has confirmed the ability to treat the existing water from the stacks and reuse it in a closed circuit as plant process water. This not only reduces the substantial legacy issue of acid water from historic work (prior to the Company’s involvement) but will also reduce overall freshwater usage in the flowsheet.

The proposed CIX/CIC separation process also eliminates the use of the toxic and highly flammable solvents and diluents required for solvent extraction with significant environmental and safety advantages for the project.

Read more about our environmental commitments.

An ideal location for a new operation, with excellent infrastructure

Phalaborwa is located on a brownfield site near an established mining town in South Africa, benefitting from all the associated skilled labour availability and supporting industry in place (such as the local production of sulphuric acid, which will be a key reagent for the project).

Phalaborwa is well situated from a transportation perspective, with strong rail links for the import of any specialist reagents and the export of the final product to market, as well as a local airport within a five-minute drive of the Project.

Existing infrastructure includes a high voltage switchyard (providing access to Eskom grid power), although Rainbow continues to explore options to reduce the carbon intensity of Phalaborwa’s production using renewable power.

JORC compliant measured and indicated mineral resource estimate

				Contribution of TREO by oxide						Grade
	Tonnes Mt	TREO %		Nd %	Pr %	Dy %	Tb %	Other %		Th ppm	U ppm
Measured	16.0	0.45		23.5	5.7	1.0	0.3	69.5		47.4	1.8
Indicated	15.2	0.43		23.3	5.6	1.0	0.3	69.8		46.0	1.9
Inferred	3.8	0.41		23.4	5.6	1.0	0.3	69.7		41.4	2.0
Total	35.0	0.44		23.4	5.6	1.0	0.3	69.7		46.1	1.8

The full Phalaborwa Mineral Resource Estimation is available here.