Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) partner TechMet has confirmed is to invest US$50 million into the Phalaborwa project in South Africa funded by US agency, the International Development Finance Corporation (DFC).
TechMet, which is backed by the DFC, will take out an option to acquire a direct equity stake in Phalaborwa, where Rainbow is processing gypsum from dumps to produce some of the most important rare earth metals.
DFC, which announced the funding at COP28, said Phalaborwa has a key role in establishing a more diversified Western supply chain of the critical rare earths vital for electric vehicles and wind turbines, Rainbow said in a statement.
Projects identified by TechMet for the DFC must meet environmental, social and governance criteria as well as show the potential for excellent economic returns.
The four rare earths that will be produced at Phalaborwa - neodymium, praseodymium, dysprosium and terbium - are all designated as critical minerals.
Adonis Pouroulis, Rainbow chairman, commented: "This approval of funding from the DFC confirms that Phalaborwa offers a strategic source of the four most economically important rare earths that are vital to the green energy transition.
"Furthermore, Phalaborwa will use our innovative processing technique to take its material through to separated rare earth oxides, unlike most rare earth projects that produce an intermediate mixed rare earth concentrate which is then sent to China for further refinement.
"By providing an independent and reliable source of separated rare earth oxides, Phalaborwa will help the U.S. to deliver on its goals to develop a U.S. downstream supply chain including specialist alloy, REE permanent magnets, drive trains, and ultimately EV/wind.”