London-listed Rainbow Rare Earths is advancing the Phalaborwa project in South Africa, where the company plans to recover neodymium, praseodymium, dysprosium and terbium from approximately 35 million tonnes of phosphogypsum residue left at a former phosphate-processing complex.
Rather than developing a conventional open-pit operation, Phalaborwa is based on the processing of material that has already been extracted, crushed and processed. The development therefore avoids the costs and geological uncertainties associated with extracting fresh ore, while placing greater emphasis on hydrometallurgical recovery and chemical processing performance. The project’s development model depends on controlling impurities, achieving the required separation performance and maintaining consistent operation of a technically complex chemical-processing plant.
Pilot work feeds into feasibility study
Rainbow is incorporating results from its pilot plant programme into the definitive feasibility study for Phalaborwa. The company is targeting the start of construction in 2027, with first production planned for around 2028. An interim economic assessment for the project indicated a net present value of approximately US$611 million.
The proposed funding structure includes up to US$50 million of US Development Finance Corporation-backed investment through TechMet. Rainbow has also secured development capital through a previous US$8.5 million royalty transaction with London-listed Ecora Resources, under which part of the project’s future revenue was transferred in exchange for funding.
Separated rare-earth oxides targeted
Phalaborwa’s planned output is centred on the recovery of four rare earth elements: neodymium, praseodymium, dysprosium and terbium. The project has a direct European connection through Rainbow’s London listing, potential customers in the European magnet industry and South Africa’s strategic raw-material partnership with the European Union. Its commercial model is based on producing separated rare-earth oxides, rather than exporting an unprocessed concentrate.
Processing risks remain central to development
The use of historical industrial residue changes the project’s risk profile but does not eliminate technical challenges. The existing waste material removes the need for conventional mining and associated geological uncertainty, while the processing route remains dependent on hydrometallurgical recovery and chemical-plant performance.
Before the project can be treated as a bankable processing facility, lenders will require verified pilot-plant data, a completed residue-management plan, long-duration reagent testing and clear performance guarantees. Rainbow’s ongoing feasibility work therefore remains focused on demonstrating that the secondary-resource material can be processed consistently and that the proposed recovery and separation system can support the project’s planned development schedule.
