CEO STATEMENT CONTINUED
STRATEGIC REPORT
09
Rainbow Rare Earths Limited
Annual Report & Financial Statements 2024
Dear Shareholder,
In FY 2024 Rainbow made significant strides
towards becoming a leader in establishing an
independent and ethical supply chain for the
rare earth elements that are driving the green
energy transition.
The main focus this year was commissioning
the Phalaborwa pilot plant to demonstrate and
optimise the unique flowsheet developed for
recovering REE from phosphogypsum. I am
extremely proud of our team’s hard work in
establishing and optimising the primary front-
end leach flowsheet, which has resulted in a
much more simplified process compared to
that which was published in our Preliminary
Economic Assessment (“PEA”), maintaining REE
recoveries at 66%. Extensive test work, including
repeatability tests, has given us a high-level of
confidence in our primary flow sheet.
Results from the primary pilot plant in South
Africa, alongside preliminary results from the
CIX/CIC separation pilot plant in USA, have
delivered two saleable products: a mixed rare
earth carbonate, and separated Nd/Pr
of ca. 96% purity, paving the way for the
first commercial recovery of rare earths
from phosphogypsum.
As announced in September 2024,
we decided to relocate the continuous ion
exchange and continuous ion chromatography
(“CIX/CIC”) separation plant from Florida to
Johannesburg earlier than originally
envisaged. This will allow for the recycling of
critical streams from the separation process to
the appropriate destinations in the leach plant
and the relevant disposal of waste material.
Complementary bench scale IX/IC tests have
commenced in South Africa and are aimed at
achieving +99% purity while the pilot plant is
shipped. I firmly believe that the successful
utilisation of CIX/CIC technology will be a game
changer for our industry, due to the efficiencies,
improved environmental footprint, and the
lower associated cost base it offers versus
traditional solvent extraction methods.
Moving this work to South Africa will have
the added benefit that the separation work
can be the full focus of Rainbow’s technical
team. We have built an excellent team,
including Chris Le Roux and Roux Wildenboer
who both have extensive experience in REE
processing and project development, and
who have been integral to the successful
development of the primary plant flowsheet at
Phalaborwa. A recent and valuable addition
to the team has been Tamsyn De Jager,
who is an exceptional project manager having
led studies from concept phase to project
execution and worked across many minerals
including REE and uranium.
Both myself and our Technical Director,
Dave Dodd, have delivered on multiple
feasibility studies, and built numerous
processing plants over our careers, most
recently at MDM Engineering. Our long history
in developing mineral flowsheets has taught
us the importance of doing things right,
even if it takes longer than anticipated,
as this is the only way to ensure the long-term
success of a project.
In addition to the progress with our process
flow sheet, an updated Mineral Resource
Estimate (“MRE”) released in September 2024
saw the total resource tonnage for Phalaborwa
increase 15% to 35.0 Mt due to the application
of updated bulk density calculations.
This increases the project life by two years
to a total of 16 years and demonstrates the
potential to generate value from other
recoverable REE not included in our PEA
project economics. Even at today’s lower spot
prices, the MRE has an in-situ value of ca.
US$7.3 billion. The full MRE can be accessed
at www.rainbowrareearths.com/
project/phalaborwa/.
It is important to us that Phalaborwa is aligned
with Rainbow’s values and our stakeholder
expectations. For this reason, ESG
considerations are a fundamental part of
Phalaborwa’s development. Understanding
our impacts, both positive and negative, is
foundational to the proper management of the
project. The Environmental and Social Impact
Assessment (“ESIA”) is a critical component of
ensuring this. Work done to date has
established that Phalaborwa offers important
benefits to its local communities in terms of
job creation and environmental remediation.
We have also commenced work to calculate
carbon emissions for the project, which has
underlined how important it will be to establish
a low-carbon energy source for the project,
given that South Africa’s state power remains
primarily coal-based. We are evaluating
renewable energy power options which we
envisage can provide the bulk of the project’s
power requirements.
We see offtake as an important component
of the Phalaborwa project’s finance process
and have commenced offtake discussions
with a number of industry participants,
including original equipment manufacturers
(“OEMs”) and global trading companies.
Phalaborwa’s ability to play a part in an ethical
and alternative supply chain was also
recognised by UK-based Less Common Metals
Ltd (“LCM”), a world leader in the manufacture
and supply of complex alloy systems and
metals, with whom we entered into a strategic
supply agreement during the Year. LCM has
been looking to secure feedstock required for
their business, and Rainbow was chosen due
to Phalaborwa’s robust cost base, which
should see the project resilient to rare earth
pricing volatility, as well as its green credentials
as an environmental remediation project.
In the long term, we believe that by honing
the technology required to recover REE from
phosphogypsum, Rainbow will be able
to access a much larger addressable market
to develop a scalable and sustainable business.
The Memorandum of Understanding (“MOU”)
signed with the Mosaic Company (“Mosaic”),
the world’s leading integrated producer of
concentrated phosphate and potash, for the
Uberaba project in Brazil, offers an exciting
opportunity to replicate the type of operation
proposed at Phalaborwa. It will offer lower-cost
REE production based in a favourable
jurisdiction that could be brought into
production much faster than traditional
mining projects.
In addition, we are currently evaluating
approaches for strategic partnership
opportunities in Saudi Arabia, Canada and
India, alongside the partnership with OCP S.A.
(“OCP”) and Mohammed VI Polytechnic
University (“UM6P”) in Morocco.
The Gakara project in Burundi has remained
on care and maintenance throughout the
Year at the request of the Government
of Burundi. Recent engagement with the
Government has not delivered progress with
regards to a resolution and the re-start of
operations in the near term cannot be
reasonably assumed. As a result, all assets
of the Gakara cash-generating unit,
with the exception of cash and VAT
recoverable, have now been impaired to nil.
I would like to thank all our stakeholders for
their continued support and especially our
employees, whose remarkable efforts have
brought the Phalaborwa project to where
it is today. Their dedication allows Rainbow
to focus on leveraging our ability to recover
REE from phosphogypsum and develop a
sustainable long-term business.
GEORGE BENNETT
CHIEF EXECUTIVE OFFICER
17 October 2024
