Rainbow Rare Earths interim results: pilot success, price tailwinds and two high‑value projects
Rainbow Rare Earths’ half-year update lands with a clear message: the flowsheet works, prices have picked up and the company now has two advanced projects with punchy economics. The flagship Phalaborwa project in South Africa is already producing a high-grade mixed rare earth product (MREP) from a large-scale pilot in Johannesburg, while the Uberaba project in Brazil has delivered an eye-catching Economic Assessment.
For retail investors, this reads as a business moving from concept to execution. It is not a mining story in the traditional sense – Rainbow is recovering rare earth elements (REE) from phosphogypsum, a waste stream from fertiliser production – which strips out a lot of the mining risk, time and cost.
Rare earth prices are rising and the market is bifurcating
Pricing momentum helped the narrative. NdPr, the core magnet rare earths, rose from about US$60/kg in June 2025 to about US$110/kg in December 2025. Heavy rare earths such as dysprosium (Dy) and terbium (Tb) saw even stronger dynamics due to Chinese export controls, with EU/US prices quoted at three to four times China, and yttrium (Y) reportedly up to 25 times.
Importantly, US Government-backed deals have underpinned a US$110/kg “floor” in the US market for NdPr – the same base price Rainbow used in its Phalaborwa economics. Analysts still see long-term demand growth across EVs, offshore wind and new defence/robotics applications. That is supportive for projects that can deliver near-term, non-China supply.
Phalaborwa pilot plant is producing high-grade MREP
Phalaborwa is now a proven producer at pilot scale. The optimised flowsheet is yielding increasingly high-grade MREP – a saleable mixed rare earth product. Initial output at 55% total rare earth oxides (TREO) has been lifted to 78% TREO, with further purification delivering a mixed rare earth oxide suitable for third-party solvent extraction (SX) separation. These samples are being verified by duplicate tests and an independent referee lab and will be used for offtake validation.
Key terms explained: MREP is a mixed rare earth concentrate that can be sold or sent for separation. SX (solvent extraction) is the industry-standard method to split the mix into individual oxides. CIX (continuous ion exchange) is a purification step that strips impurities and reduces feed volume, enabling a smaller, lower-cost SX plant.
Flowsheet optimisations point to lower costs
- Leach stages cut from three to two; residence time down from 32 hours to eight; heating needs reduced.
- In-house CIX and precipitation rejects impurities and upgrades the product.
- Mechanical reclamation chosen over hydraulic – simpler feed handling and lower environmental risk.
- On-site sulphuric acid plant expected to de-risk reagent supply and provide power for leaching, cutting external power costs.
Rainbow is assessing whether to sell MREP (with an expected 70%-75% overall payability) or capture more value by adding SX to produce separated products – a combined NdPr oxide and an SEG+ (samarium, europium, gadolinium plus) mix rich in Dy, Tb and Y, each at >99.5% purity. Separation could be on-site or at a third-party plant, potentially staged to match financing and offtake.
Scale and product slate
- Throughput: 2.2 Mtpa of phosphogypsum.
- Output: c. 10,000 tpa MREP, which can be refined to c. 1,800 tpa NdPr oxide and an SEG+ product containing c. 60 tpa Dy, c. 20 tpa Tb and c. 140 tpa Y.
Phalaborwa economics and timeline
The updated Interim Study (December 2024) showed a post-tax NPV10 of US$611 million, post-tax IRR of 38%, average EBITDA of US$180 million per annum over a 16-year life, and a 2.0-year payback on US$326 million capital. The upcoming Definitive Feasibility Study (DFS) in 2026 will refresh these numbers and factor in cost optimisations and the choice between selling MREP versus separated products. Construction is planned to commence by the end of 2027, with permitting and project finance processes running in parallel post-DFS.
Uberaba in Brazil: a second major REE project with strong returns
Uberaba, advanced with The Mosaic Company under a Joint Project Development Agreement, mirrors Phalaborwa’s model – processing phosphogypsum using Rainbow’s IP. The March 2026 Economic Assessment confirmed a long-life, high-margin profile using Argus prices as at 5 March 2026: post-tax NPV10 of US$916 million, post-tax IRR of 45%, average EBITDA of US$217 million per annum over a 30-year life, and a 1.7-year payback on US$279 million capital. A Pre-Feasibility Study is now in train. Subject to a positive PFS and a DFS decision, a JV is intended with Mosaic at 51%/49% (Mosaic/Rainbow), subject to final terms.
Why this matters: high-margin Western supply with strategic backing
Phalaborwa is a chemical processing operation, not a hard-rock mine. That strips out the mining fleet, pit development and many permitting hurdles – a big reason the margins look attractive. The project is also recognised by the US Government as a strategic near-term source of light and heavy REE. A US$50 million funding option from the US International Development Finance Corporation is available via strategic shareholder TechMet Limited, and Ecora Royalties PLC has backed the project with royalty funding.
Key numbers at a glance
| Project | Study | Post-tax NPV10 | Post-tax IRR | Avg EBITDA p.a. | Life | Payback | Capital |
|---|---|---|---|---|---|---|---|
| Phalaborwa (South Africa) | Interim Study Dec 2024 | US$611 million | 38% | US$180 million | 16 years | 2.0 years | US$326 million |
| Uberaba (Brazil) | Economic Assessment Mar 2026 | US$916 million | 45% | US$217 million | 30 years | 1.7 years | US$279 million |
Financial position and funding runway
Operating discipline remains tight. The company spent US$394k at the Johannesburg laboratory and US$366k on Phalaborwa technical work in the period, with capitalised project costs at US$17.7 million. Overheads were US$1,626k. The income statement was dominated by a non-cash US$3,879k increase in the fair value of the Ecora royalty liability (reflecting higher REE price forecasts), which stood at US$11.1 million at 31 December 2025.
Cash was US$1.4 million at 31 December 2025 following a US$2.5 million outflow. Post period-end, Rainbow raised approximately US$14.6 million at £0.20 per share via the issue of 55.4 million shares, providing funds to complete the Phalaborwa DFS, the Uberaba PFS and general purposes beyond the end of Q2 2027. The board states it has sufficient working capital for at least the next 12 months from publication.
Risks to track from here
- DFS outcomes and flowsheet refinements – results may differ from the Interim Study.
- Permitting in South Africa – multiple licences required, with timing uncertain, though the project cleans up legacy environmental issues.
- Financing for project build – dependent on DFS, permits, commodity prices and separation route.
- Rare earth price volatility – heavy REE premia outside China may not persist.
- Site access – securing a lease over land owned by South Africa’s Department of Public Works and Infrastructure is required for the preferred layout.
- Co-development – at Phalaborwa, Bosveld holds 15%; at Uberaba, JV terms with Mosaic must be finalised.
- Country risk – projects are in South Africa, Brazil and Burundi; Gakara in Burundi remains on care and maintenance.
Josh’s take: momentum building, but execution and timing remain key
This is a solid interim: the pilot plant is producing high-grade MREP, the flowsheet has been simplified in the most expensive section of the circuit, and Rainbow now has two projects with compelling modelled returns. Price momentum, especially for heavy rare earths, adds torque. The strategic endorsements – DFC option via TechMet and Ecora’s royalty – are meaningful.
On the flip side, the heavy lifting is ahead. The DFS will need to nail down separation strategy, capital, offtake payability and permitting. The timeline to start construction by end-2027 leaves little slack. Financing a US$300 million-plus capex in a volatile market will require continued demonstration at pilot, credible offtake and a clean permitting path.
Near-term catalysts: ongoing pilot results and third-party assays, potential offtake validation, the SX decision and DFS publication in 2026, Uberaba PFS progress, and permitting submissions. For investors who want exposure to Western magnet rare earths without classic mining risk, Rainbow’s waste-to-REE model is one to watch – with the usual caveat that delivery against the 2026-2027 milestones will dictate value from here.
