Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) told investors that test work at its Johannesburg laboratory has produced a high-purity mixed rare earth carbonate averaging more than 55% total rare earth oxides, compared to an industry benchmark of 42%.
The company said the continuous ion exchange process has also delivered feed consistently above 93% purity, enabling progress towards final separation of rare earth oxides.
Modelling and updated costings are now underway as part of the Phalaborwa project’s definitive feasibility study.
"These results represent significant progress for the Phalaborwa project, confirming the potential to become a very low-cost producer of light and heavy REE, and one of the highest margin projects in development globally," said chief executive George Bennett.
"They also validate our decision to finalise our flowsheet test work in-house and demonstrate that we have developed the expertise to address REE extraction and separation in a highly efficient manner."
Bennett added: "The West is finally recognising the importance of REE, used in permanent magnets vital to the functionality of many of the products that underpin 21st Century society, as well as to emerging and advanced technologies.
"A number of recent initiatives by the US, Australian and European Governments are aimed at improving the economics of, and supporting the financing for, REE projects to rapidly build out end-to-end rare earth permanent magnet (REPM) supply chains."
He specifically noted the recent offtake agreement between the US Department of Defense and MP Materials which demonstrated industry acceptance of a floor price significantly above current market pricing, required to ensure new sources of supply to feed a Westen supply chain.
"Whilst Rainbow's project is very robust at current REE pricing and is expected to deliver a very positive EBITDA.
"We are therefore very comfortable with this benchmark floor price ... as it is the same price used in Rainbow's updated December 2024 interim economic assessment of Phalaborwa, which demonstrated the project would generate ca. US$181 million annual EBITDA once in production."