George Bennett

GEORGE Bennett continues to talk up a storm on the benefits of Rainbow Rare Earths’ project to recover high-tech rare earth minerals from the gypsum stacks created as waste from decades of processing phosphate ore at Foskor’s Phalaborwa operations. But for some reason investors didn’t listen in 2022 as the firm’s share price slid from a high of 18 pence in February to around 9.75p at the end of December. That was despite a jump in rare earth prices that increased the Phalaborwa basket price by 82% to $173.9 per kilogram of magnet rare earth oxides.

For Rainbow, the main event of the year was publication of the preliminary economic assessment (PEA) in October. Bennett’s company has developed a process to extract rare earth minerals from the host phosphogypsum stacks and,according to the PEA, the project can support total production of 26,208 tons of separated magnet rare earth oxides with a weighted average sales value of $137,9/kg, potentially generating $3.6bn in revenue over 14.2 years. Using the higher prices recorded in 2022 up to the end of October, the report said the project would have an operating margin of greater than 80% and a payback period of just 1.7 years.

Mouthwatering stuff, but why then was the share under pressure? The investors who coughed up £6.4m at 15p a share in the October 2021 fundraising cannot be too happy. The next stages of development involve a full feasibility study and permitting process, with further optimisation targeting a production date of 2026. Rainbow’s secondary operation at Gakara in Burundi, which was “temporarily suspended” because of a dispute with the government last year, is now reported by chairman Adonis Pouroulis as being on care and maintenance since June 2021.