Rainbow Rare Earths: A Rare Opportunity

Rare earths like neodymium, praseodymium, dysprosium, and terbium are irreplaceable in the magnets that power electric vehicles, wind turbines, robotics, drones, and advanced defense systems. Demand is surging as the world electrifies — with EVs, offshore wind farms, and humanoid robots driving long-term growth. Rainbow Rare Earths is one of the few emerging Western-aligned suppliers able to deliver both light and heavy rare earths in separated oxide form, directly into these critical value chains. It offers a rare opportunity to invest in the enabling layer of the green and digital transitions.

Rainbow’s core innovation is recovering rare earths from phosphogypsum — a waste product of fertilizer production — using a proprietary flow sheet built from proven technologies. This eliminates mining, crushing, and cracking, cutting costs and carbon. The Phalaborwa project is already de-risked through pilot testing and offers industry-leading margins, with a simplified and modular flowsheet suitable for global replication. Few rare earth projects can claim low CapEx, low OpEx, and high environmental performance — Rainbow can.

Rainbow’s process transforms environmental liabilities into valuable commodities, rehabilitating contaminated sites while producing critical materials. Backed by $50M from the U.S. Development Finance Corporation and aligned with Western supply chain strategies, Rainbow is positioned at the nexus of ESG investing and geopolitical realignment. It meets a global need: sustainable, secure, non-Chinese supply of rare earths. With local partnerships, a circular process, and Equator-compliant permitting, it’s designed to lead the next wave of responsible resource development.

• Definitive Feasibility Study (DFS): Completion in 2025 will validate project economics and optimized flowsheet, setting the stage for financing and offtake agreements. A strong DFS could confirm Rainbow’s low-cost leadership.
  
  

• Nd/Pr Purity Breakthrough: Achieving and verifying 99%+ purity in separated Nd/Pr oxides will be pivotal for maximizing payability. It would validate Rainbow’s IP and support pricing leverage in future offtake contracts.

• Environmental Permitting Completion: As the company finalizes its EIA and stack redesign, securing full permits will be a major de-risking event. This milestone could trigger funding releases and EPC contracts.
  
  

• Project Financing Milestone: Rainbow aims to finalize a blended $300M financing package including the $50M DFC commitment. Securing this capital will unlock the construction phase and signal market confidence.

• Phalaborwa Commissioning and Production (2027): First revenue generation from high-margin REO production will mark Rainbow’s transition to a cash-generating business. Ramp-up is expected to be faster than typical mining projects.
  
  

• Global Expansion (Brazil and Beyond): The Uberaba project in Brazil is already underway, and Rainbow has engaged partners in India, Saudi Arabia, and Canada. Replicating its model globally could dramatically expand future valuation.

Despite successful pilot production, the transition to full-scale commercial operations remains a critical hurdle. Technical performance, yield consistency, and operational uptime must be proven at industrial scale. Additional separation steps or integration refinements may be required to reach 99%+ purity across all REEs. Any missteps could lead to delays, cost overruns, or failure to secure offtake agreements. This risk is partially mitigated by Rainbow’s experienced team and ongoing optimization work at its Johannesburg lab.

Rainbow’s flagship project is located in South Africa, where mining and industrial permitting can be subject to delays or policy shifts. Although the Phalaborwa site benefits from existing infrastructure and brownfield status, any changes in environmental standards, land use permissions, or political leadership could affect the timeline or feasibility. Ongoing compliance with IFC and Equator Principles should help mitigate regulatory risk, but uncertainty remains until all permits are granted.

Rainbow’s economic model is sensitive to pricing for NdPr, Dy, and Tb—elements known for cyclical swings due to supply shocks and demand fluctuations. A prolonged downturn could reduce project NPV and affect financing attractiveness, even with low-cost operations. Moreover, investor sentiment in the sector can overreact to short-term commodity moves. This risk is partially offset by the growing demand from electric vehicles, wind energy, and robotics—sectors expected to sustain long-term REE demand.