Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) earlier this week confirmed that it had eliminated a key technical risk for its Phalaborwa project by adopting solvent extraction as its final separation method.
The company told investors that its previous approach - ion chromatography - had not achieved the required purity levels. By transitioning to solvent extraction, Rainbow was able to work with Australia’s Nuclear Science and Technology Organisation (ANSTO), which validated the ability to reach 99.5% purity for both Neodymium-Praseodymium and the SEG+ group.
Rainbow highlighted that its extraction circuits will be far smaller than traditional systems. It said the compact design, using just 75 mixer-settlers, supports low capital and operating costs.
CEO George Bennett joined the Proactive studio to talk about the project, this new milestone and rare earth market dynamics, and here, we take a closer look at what was said.
Proactive: George, good to speak with you. How does finalizing solvent extraction as the separation route materially de-risk Phalaborwa for investors?
George Bennett: Well, Rainbow always had this sort of risk discount to it because we were going down the path of ion chromatography for our final separation route, which has never been done commercially in rare earths before. But we looked at this as an alternative because we were very au fait with solvent extraction as a team, and also with continuous ion exchange.
So we thought ion chromatography could be a low capital-intensive method. We went down that path for a couple of years, but weren’t getting the purity and separation levels required. A year ago, we moved our pilot plant from Florida to South Africa and built our own lab, which significantly reduced costs and improved turnaround times on test results.
That allowed us to develop our flow sheet much quicker and at lower cost. We achieved a very high-grade leach solution and low impurity levels. That success allowed us to consider a smaller solvent extraction circuit.
Proactive: So how did ANSTO come into the picture?
George Bennett: We engaged ANSTO—Australia’s Nuclear Science and Technology Organisation—which is a global leader in solvent extraction for rare earths. They confirmed we could achieve 99.5% purity for both Neodymium-Praseodymium and the SEG+ group via two small solvent extraction circuits—just 75 mixer-settlers compared to up to 2,000 in some global projects.
This keeps us at the low end of capital and operating costs. It’s a significant de-risking step because we’re now using proven technology.
Proactive: George, yttrium prices have surged recently. How does this impact Phalaborwa’s EBITDA and what’s your view on sustainability of those prices?
George Bennett: Actually, we've seen even higher pricing in Europe—$220 to $320 per kilogram. That’s a 1,500% to 4,000% increase. Initially, we only expected value from Neodymium and Praseodymium, but now the SEG+ group adds significant value from dysprosium, terbium, yttrium, rhenium, and samarium.
Revenue from SEG+ could now reach around $160 million at 70% payability, versus $80 million previously. At EBITDA margins of 70–75%, that’s a major upside.
On sustainability, yttrium is critical for defense and aerospace. Since our announcement, a major aerospace and jet engine manufacturer has approached us for yttrium offtake at full pricing. With Chinese export restrictions likely due to military relevance, yttrium will remain a high-value rare earth.
Proactive: With ANSTO and METC Engineering onboard, what are the remaining technical milestones before the DFS is completed?
George Bennett: The key milestone—achieving separation and impurity thresholds—has now been met through solvent extraction. We’ll run a short pilot plant at ANSTO next year—seven days per circuit—to produce marketing samples.
From a technical standpoint, there's now nothing blocking the completion of the DFS, which we now expect in mid-2026. Previously, we couldn’t set a DFS timeline due to uncertainty in ion chromatography. That uncertainty is now removed.
Proactive: George, I hope you continue to keep us updated with your progress. Thank you for speaking with us.