Rainbow Rare Earths Ltd has two world-class, scalable projects that have the potential to sell directly into western markets, according to ACF Equity Research, which recently provided its ‘core investment case’ for the mine developer.
Currently, China accounts for 85% of the refined rare earth supply, giving it a stranglehold over some of the core ingredients used in low-carbon technologies.
So, companies such as Rainbow, which has assets in South Africa and Burundi, are likely to meet with strong demand when they go into production.
The company’s Phalaborwa project, in South Africa, has an inferred mineral resource of 38.3Mt, rich in neodymium-praseodymium oxide contained in gypsum tailings.
Rainbow recently announced it had successfully compiled a flowsheet, with the help of chemical engineering specialist K-Technologies, that will allow it to cheaply and efficiently extract rare earths from the tailings material.
The completion of a preliminary economic assessment of Phalaborwa will provide the market with the first guidance on the capital investment required to get the operation up and running.
“Phalaborwa represents a key diversification opportunity for western users and its low capital and operating expenditure will accelerate production,” said ACF in its note.
“In addition, its low levels of radioactive elements support [Rainbow’s] sustainable agenda to deliver an environmentally responsible high-grade rare earth oxide.”
Gakara, in Burundi, is a high-grade deposit rare earths deposit where trial mining has allowed management to better understand the potential of the asset.
Specifically, it has shown the resource can be extracted via a simple open pit mine and low-cost gravity separation.
ACF in its note concluded that Rainbow is ‘positioned to power the green revolution’.
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