Rainbow Rare Earths Secures 70% Share in Phalaborwa Project

LSE-listed rare earth miner Rainbow Rare Earths has reported that its 70% stake in the 38.3 million ton Phalaborwa project has been confirmed through an amendment to its agreement with Bosveld Phosphates to co-develop and jointly operate the project.

When the joint venture was announced in November 2020, the agreement included a mechanism for Rainbow's ownership of the joint venture to range from 60 percent to 85 percent, depending on the results of a pre-feasibility study.

The amended agreement signed on January 18 confirms Rainbow's 70% shareholding in the joint venture, with the remaining 30% held by Bosveld. Rainbow CEO George Bennett said the amendment underscores Rainbow's belief in the significant potential of the Phalaborwa rare earths project and removes any uncertainty surrounding the benefits to Rainbow by fixing its majority stake at 70 percent, eliminating any uncertainty surrounding the benefits to Rainbow.

The amendment eliminates any negative uncertainty regarding dilution of Rainbow's share of the joint venture and ensures Rainbow's significant share of future revenues.

Technical work undertaken to date has confirmed that the inferred mineral resource at Phalaborwa project is estimated at 38.3 million tonnes at 0.43% total rare earth oxides contained in gypsum tailings stockpiled in unconsolidated piles from historical phosphate hard rock mining. The high-value neodymium and praseodymium oxides account for 29.1% of the total rare earth oxides contained.

Metallurgical test work has confirmed that Phalaborwa's phosphogypsum can be leached directly with acid to extract the rare earths contained therein. "The test work has demonstrated the ability to develop the project into a low capital, low operating cost, high yield asset and accelerate it to production stage," Bennett added.

This is due to the unique nature of the project, where rare earths are contained in phosphogypsum in a cracked chemical form that does not require the significant costs associated with mining, crushing, and grinding or chemical cracking of potential rare earth minerals. These tend to form the majority of the cost basis for conventional hard rock rare earth mining projects, he noted.

Utilizing the Southern African technology exclusively licensed to Rainbow by K-Technologies, Rainbow Rare Earths plans to provide separated rare earth oxides at the Phalaborwa project site, facilitating the realization of the full value of the contained rare earth oxides for the benefit of shareholders.

He said, "The amendment reflects our confidence in the project and is the next step in Rainbow's overall strategy to become a significant global producer of neodymium and praseodymium, as well as rare earth elements."

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