Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF, FRA:RR1), the LSE-listed critical minerals company, rose 8% to 28p after unveiling a $916 million net present value economic assessment for its Uberaba rare earths project in Brazil and signing a joint development agreement with Mosaic, the New York-listed fertiliser giant.
The Uberaba project, located in the Minas Gerais state of Brazil, would extract rare earth elements from phosphogypsum, a waste product generated during phosphoric acid production at Mosaic's existing operations on site, using proprietary processing technology developed by Rainbow.
The economic assessment estimates a post-tax internal rate of return of 45%, average annual earnings before interest, tax, depreciation and amortisation of $217 million over a 30-year mine life, and a capital payback period of just 1.7 years, based on a capital expenditure of $279 million.
Rainbow and Mosaic have signed a joint project development agreement to advance a pre-feasibility study, with the intention of establishing a joint venture in which Mosaic would hold 51% and Rainbow 49%, subject to final negotiation of terms.
The partners are targeting initial production by 2030, subject to further studies, regulatory approvals and financing.
The project mirrors Rainbow's flagship Phalaborwa project in South Africa, which uses the same phosphogypsum processing approach, and the company said lessons learned at Phalaborwa could allow Uberaba to be developed on a faster timeline.
George Bennett, chief executive of Rainbow, said Brazil was emerging as a strategically important rare earths hub for the Americas, with strong interest in funding from the United States and allied nations seeking to build supply chain independence from China.