An extensive due diligence process has confirmed the potential of South Africa’s Phalaborwa project as one of the lowest-cost producers of separated rare-earth oxides in development, London Stock Exchange-listed Rainbow Rare Earths stated earlier this month in announcing its entry into an investment option agreement with TechMet.

“Phalaborwa has the potential to become one of the most environmentally friendly and lowest-cost rare earths projects anywhere in the world,” TechMet chairperson and CEO Brian Menell stated in the November 8 media release to Engineering News & Mining Weekly.

Menell, a member of South Africa’s illustrious Menell family of Anglovaal mining and industrial renown, highlighted Rainbow’s proprietary separation technology as providing Phalaborwa with a significant opportunity to fast-track production of the four most economically important rare-earth elements, which the company described as being essential for future supply chains for electric vehicles, wind turbines and other products vital to the energy transition and the global economy.

The project is expected to be cash-generative across the rare-earths pricing cycle.

TechMet, in which the US International Development Finance Corporation is a shareholder, has been granted an option to invest $50-million equity funding in the capital cost and take a direct ownership stake of 15% to 33% at project level, underpinning the $151.5-million to $333.3-million equity valuation of the project.

Rainbow CEO George Bennett described the financially derisking TechMet option as validation of Rainbow’s focus on the development of rare earths from secondary sources.

“We expect Phalaborwa to continue to attract funding, especially from US sources of capital, due to the focus on the critical role of these rare-earth metals in the technology- driven industrial and clean energy age,” Bennett added.

The project involves the recovery of rare earths from gypsum and waste dumps and is poised to be part of the journey to a net-zero world, which will require an unprecedented increase in the supply of rare earths required for the clean energy transition.