RAINBOW Rare Earths confirmed on Monday that first production from its Phalaborwa rare earths project in Limpopo in South Africa is expected in early 2029, while a proposed US listing could take place during 2027.
The company plans to publish a pre-feasibility study (PFS) for Phalaborwa in the current quarter, followed by a definitive feasibility study (DFS) in the first half of next year.
CEO George Bennett said during an investor presentation on Monday that Rainbow plans to start early construction in the final quarter of 2027, with “initial production in the early part of 2029”. The decision to publish a PFS ahead of the DFS had not changed the overall project timetable, he said.
Much of the groundwork needed for permitting has already been completed, including environmental, noise and heritage studies. The remaining applications will follow publication of the PFS.
“The permitting process in South Africa is very well established,” Bennett said. “We have a very, very clear line of sight on the permitting process in South Africa.” Rainbow expects the permitting process, once formally launched, to take about nine to 12 months.
The company is also moving closer to a decision on a US listing, an possibility it has been examining since May. The PFS will allow Rainbow to complete its assessment and set a firm timetable. “If we do go ahead and do this listing, it will be during 2027,” Bennett said.
A US listing would not replace Rainbow’s existing London listing. “There’ll be no effect on the listing in London,” he said, although the company expects trading to shift increasingly towards the US over time.
Rainbow believes a US listing could also help it raise the equity needed to develop Phalaborwa at a higher valuation, reducing dilution for existing shareholders.
It expects roughly two-thirds of the project funding to come from debt and one-third from equity. The US International Development Finance Corporation has already committed $50m towards construction funding.
Rare earths are critical to permanent magnets used in electric vehicles, wind turbines and defence equipment. China dominates much of the global supply chain.
Rainbow expects to raise the equity portion later next year, potentially alongside a US listing.
Offtake deal
The company is meanwhile working towards a binding agreement with Neo Performance Materials after announcing a provisional offtake and technology agreement last month. Neo has agreed to take 40% of Phalaborwa’s separated neodymium-praseodymium production and 65% of its mixed heavy rare earth product.
Legal work on the longer-form agreement has already started, with Rainbow expecting to announce a binding deal in the near term. Pricing would be at “market pricing plus a premium”, with further detail to be disclosed at that stage.
Rainbow is also negotiating further sales agreements. Lenders would typically want about 80% of production covered by such agreements before providing project debt, according to Bennett.
In Brazil, Rainbow has started the PFS for its Uberaba rare earths project with US fertiliser group Mosaic. The study is expected to be completed around this time next year, with the earliest production targeted for 2030.
Uberaba is expected to be owned 51% by Mosaic and 49% by Rainbow and, like Phalaborwa, will recover rare earths from phosphogypsum rather than through conventional mining.
