JOHANNESBURG (miningweekly.com) – An extensive due diligence process has confirmed the potential of South Africa’s Phalaborwa project as one of the lowest cost producers of separated rare earth oxides in development, London Stock Exchange-listed Rainbow Rare Earths stated on Wednesday in announcing its entry into an investment option agreement with TechMet.

"Phalaborwa has the potential to become one of the most environmentally friendly and lowest-cost rare earth projects anywhere in the world,” TechMet chairperson and CEO Brian Menell stated in the November 8 media release to Mining Weekly.

Menell, a member of South Africa’s illustrious Menell family of Anglovaal mining and industrial renown, highlighted Rainbow’s proprietary separation technology as providing Phalaborwa with a significant opportunity to fast-track production of the four most economically important rare earth elements, which the company described as being essential for future supply chains for electric vehicles, wind turbines and other products vital to the energy transition and the global economy.

The project is expected to be cash-generative across the rare earths pricing cycle.

TechMet, in which the US International Development Finance Corporation is a shareholder, has been granted an option to invest $50-million equity funding in the capital cost and take a direct ownership stake of 15% to 33% at project level, underpinning the $151.5-million to $333.3-million equity valuation of the project.

Rainbow CEO George Bennett described the financially derisking TechMet option as validation of Rainbow’s focus on the development of rare earths from secondary sources.

“We expect Phalaborwa to continue to attract funding, especially from US sources of capital, due to the focus on the critical role of these rare earth metals in the technology-driven industrial and clean energy age,” Bennett added.

The project involves the recovery of rare earths from gypsum and waste dumps and is poised to be part of the journey to a net-zero world, which will require an unprecedented increase in the supply of rare earths required for the clean energy transition.

The Phalaborwa project, which offers near-term production opportunity in all four of the permanent magnet rare earths required for the green energy transition, will involve the processing of phosphogypsum stacks.

These are the byproduct of historic phosphoric acid production on the site, which ceased in 2014.

The phosphogypsum stacks on surface, which enables quicker and lower-cost production, will be processed into separated rare earth oxides of 99.95% purity, using proprietary separation technology developed by Rainbow in partnership with K- Technologies.

This separation technique replaces traditional solvent extraction technology and Rainbow’s operations will clean-up the legacy acid water  environmental issues on site and deplete the gypsum stacks over time.