Rainbow’s PEA confirms robustness
The release of Rainbow Rare Earths’ recent Preliminary Economic Assessment (PEA) for the company’s Phalaborwa Rare Earths Project in the Limpopo Province of South Africa, marks an important milestone in the project’s development.
Rainbow’s PEA demonstrates a long life and financially robust opportunity for Phalaborwa to become a significant supplier of high purity rare earth oxides.
Rare Earths Elements are becoming more popular as the permanent magnet market continues to expand to support global decarbonisation and to satisfy the growing demand for electric vehicles and offshore wind turbines.
The PEA was conducted by Johannesburg based METC Engineering, a South African minerals processing engineering company.
The positive results of the PEA support the continued development of Phalaborwa, with the next steps including the publication of a resource update and the definition of a work programme for a feasibility study.
Payback in only two years
According to Rainbow Rare Earths CEO, George Bennett, the PEA indicates a payback period of only 2 years. “This corroborates our long-held view of Phalaborwa’s enormous potential as a low capital intensity, high margin, near-term rare earth development project,” says Bennett.
Bennett adds that the base case financial model presents a robust project with low sensitivity to costs, which is particularly relevant in the current inflationary environment, and which can generate strong returns in any foreseeable rare earth oxide pricing environment.
At 2022 year-to-date average prices (which are around 28% higher than the base case), the economics are exceptionally strong with an NPV of USD934-million and a payback of 1.7 years.
As a brownfield site, the development of Phalaborwa provides the company with a significant opportunity to make positive environmental, social, and economic impacts.
“The successful completion of this PEA represents not only a breakthrough step in the development of Phalaborwa, demonstrating the viability of this opportunity, but also underscores the broader potential to use our unique IP and technology to extract separated rare earth oxides from other phosphogypsum sources on a global scale,” says Bennett.
“Leveraging the expertise we have built up at Phalaborwa, we aim to accelerate the shift in our business model to processing rare earths from secondary sources. At a time when governments around the world are designating rare earths as critical minerals, with the EU stating an anticipated fivefold increase in demand by 2030, our strategy aims to facilitate near-term access to these elements which are so fundamental to global decarbonisation.”
“Our focus on phosphogypsum as a source of magnet rare earths importantly differentiates Rainbow from a risk perspective when compared with traditional hard rock rare earth mining companies.
“I believe Phalaborwa’s PEA accurately reflects the rigour and expertise we apply to project assessment. As we progress to a feasibility study at Phalaborwa, I am confident that we have the right team, skills, and technology to unlock this valuable source and contribute to a responsible, independent, Western rare earths supply chain,” says Bennett.
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