Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) has strengthened the value proposition of its Phalaborwa project in South Africa after updating its mineral resource estimate to include yttrium, a heavy rare earth element (REE) that has been under Chinese export controls since April.
The update confirms Phalaborwa as a near-term, strategic source of both medium and heavy REE, including dysprosium, terbium, samarium, europium, gadolinium and yttrium, alongside the critical light elements neodymium and praseodymium.
All have been designated as critical minerals by the United States Geological Survey (USGS) in its 2025 list, published on 6 November.
Rainbow said that although its current economic models account only for neodymium, praseodymium, dysprosium and terbium, it plans to update the valuation as part of its forthcoming Definitive Feasibility Study (DFS) to reflect growing demand for the full suite of valuable rare earths.
The company noted that its test work had confirmed Phalaborwa’s capability to produce a mixed rare earth carbonate (MREC) product containing the complete range of medium and heavy REE, referred to as SEG+.
Yttrium and gadolinium have seen a sharp increase in demand since the introduction of Chinese export restrictions earlier this year.
George Bennett, chief executive, said: “Since the imposition of export controls by China in April 2025, we have seen growing interest in securing supply of the full range of restricted REE, where shortages have already developed in the market.
"This includes yttrium and gadolinium, which are increasingly recognised as key REE required by the U.S. and other aligned nations for important strategic uses, including for defence applications.
“Phalaborwa is a unique project in that it hosts commercial quantities of the full gamut of economically important rare earths, including the medium and heavy REE.
"We will therefore look to incorporate the value of the full range of strategic REE into our economic model for the project as part of the DFS.”
China’s export controls have targeted seven REE, samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, as well as permanent magnets containing them.
These restrictions have disrupted global supply chains, affecting sectors from electric vehicles and robotics to defence and aerospace.
While Beijing’s proposed extension of the controls has been delayed for at least a year, the measures have spurred Western governments to accelerate efforts to develop independent supply sources.
Rainbow believes both Phalaborwa and its Uberaba project in Brazil, which is currently undergoing economic assessment, will play key roles in meeting that demand.
At full production, Phalaborwa is expected to deliver around 1,817 tonnes of neodymium and praseodymium oxide per year at 99.5% purity, along with 1,159 tonnes annually of a SEG+ MREC product containing 719 tonnes of total rare earth oxides.