‘We believe Phalaborwa will continue to be of interest to strategic investors since it will produce all four of the critical rare earths for permanent magnets’
GEORGE Bennett has pushed steadily ahead with the development of the Phalaborwa Rare Earths Project and was rewarded on two key fronts – a recovery in the company’s share price and, more importantly, potentially bringing on board a substantial financial backer. That was Brian Menell’s TechMet investment company which could take a 15% to 33% stake in the Phalaborwa project after being granted a $50m, three-month option in the venture. TechMet has the backing of the Development Finance Corporation – a US government fund aimed at developing battery minerals in the West.
Mercuria, a Swiss-based commodities trading house, is also a shareholder in TechMet. Another big development was that Rainbow Rare Earths increased its stake in the Phalaborwa project to 85% and now has the option to obtain the remaining 15% through the issue of $7m in shares. Management used the recovery in the share price to raise $9.5m in May at a 30% premium to the ruling share price and a further $5.4m in September at a discount of only 3%. Rainbow has also made significant changes to its diversification strategy impairing the Garaka Project in Rwanda and writing off $10.8m in the process. The company has instead opted to invest in the “earlier stage” Uberaba project in Brazil. Uberaba is “similar” to Phalaborwa but would be a larger operation to be developed jointly with partner Mosaic.
On the technical side a major development was the recovery of the first mixed rare earth sulphate from the front-end pilot plant in Johannesburg. Put it all together and the Rainbow share price recovered from below 10 pence a share at the end of 2022 to around 15p at end-2023 putting it back at the level where Rainbow carried out its initial fund raise in October 2021.
LIFE OF GEORGE
To call Bennett an “interesting character” would be putting it mildly. He is best known as the founder and CEO of engineering group MDM Engineering which he sold to Amec Foster Wheeler in 2017 for $120m, but Bennett actually started his business career in the “rag trade”. That was when he dropped out of his studies at the University of Natal in Durban to get involved in the city’s clothing industry which was booming at the time. He then shifted to the stock market, moving to Johannesburg in the mid-1980s and becoming a partner in broking firm Simpson McKie which was subsequently taken over by HSBC. Bennett quit HSBC in 2003 and went gold mining, listing Shanta Gold in London in 2005.