REG - Rainbow Rare Earths - Phalaborwa Pilot Plant Commences Operations

Rainbow Rare EarthsAnnouncement

06/06/2023 07:00

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RNS Number : 7234B  Rainbow Rare Earths Limited  06 June 2023

6 June 2023

Rainbow Rare Earths Limited

("Rainbow" or "the Company")

LSE: RBW

 

Phalaborwa pilot plant commences operations

Rainbow Rare Earths is pleased to announce an update with regards to progress
on the pilot plant for the Phalaborwa project in South Africa.

Highlights

·    Pilot plant front end has commenced operations and is on track to
produce the first high-value mixed rare earth sulphate in Q3 2023

·    Will confirm Phalaborwa's status as a near-term producer of magnet
rare earths, capable of being commercialised on a standalone basis, materially
de-risking the project

·    Pilot plant back end, to produce separated magnet rare earth oxides,
is well advanced in terms of its construction, with commissioning due Q3 2023

·   The Company is exploring the option to permanently establish its
back-end process in the USA, which would establish it as one of the first
producers of separated rare earth oxides in the country

As previously announced, the pilot plant is split into two phases. Phase one
comprises a front end where material from the historic gypsum stacks at the
Phalaborwa site will be consolidated into a rare earth sulphate, containing
economic quantities of the four most important rare earth elements, which are
used to make permanent magnets, being neodymium and praseodymium ("NdPr"),
dysprosium and terbium.

The front-end process is situated at the Johannesburg facilities of the
Council for Mineral Technology ("Mintek"), a global leader in mineral
processing, extractive metallurgy, and related fields, and commissioning of
the first stage is complete, in line with Rainbow's project development
timetable and budget. A video of the front end of the pilot plant in operation
can be viewed at https://www.rainbowrareearths.com/news-media/media/.

The front-end process incorporates the front-end gypsum washing, acid leach,
fluoride removal via continuous ion-exchange ("CIX"), rare earth precipitation
and a sulphuric acid agitated bake ("SAAB") to produce a high-value mixed rare
earth sulphate. This will subsequently be shipped to Rainbow's rare earth
separation plant situated at K-Technologies, Inc. ("K-Tech") in Lakeland,
Florida, USA, for separation into rare earth oxides.

The front end will produce its first mixed rare earth sulphate solids in Q3
2023, thereby confirming Phalaborwa's status as a near-term producer of magnet
rare earths. It is important to note that most rare earth mining projects
produce a mixed rare earth mineral concentrate, a mixed rare earth sulphate, a
mixed rare earth oxide or a mixed rare earth carbonate as their end product.

This milestone will therefore establish Phalaborwa as an economically viable
producer of mixed rare earth sulphates on a standalone basis. Rainbow has
established that there is a high demand in favourable jurisdictions for a
mixed rare earth sulphate product ahead of the final beneficiation step that
will be undertaken using the K-Tech process.

The mixed rare earth sulphate solids produced by the pilot plant front end at
Mintek will be shipped to the USA to undergo further downstream processing in
the pilot plant back end, in order to deliver separated magnet rare earth
oxides.

Phase two of the pilot plant comprises the back end situated at K-Tech, which
will water leach the mixed rare earth sulphate into a pregnant leach solution
("PLS"), perform a cerium rejection step to minimise flows downstream (thereby
further reducing operating costs and capital expenditure) into the CIX circuit
for loading onto the cation resin before stripping and going into the final
continuous ion chromatography ("CIC") step, which will produce the separated
rare earth oxides using K-Tech's patented CIX/CIC technology.

The ability to produce separated rare earth oxides highlights Rainbow's unique
position within the magnet rare earth supply chain, as it expects to be able
to produce a separated rare earth oxide product at 99.95% purity that can be
sold directly to permanent magnet manufacturing capacity currently being
developed in the USA and aligned countries.

The back end of the pilot plant is currently well advanced in terms of its
construction at K-Tech's facility in Lakeland, with commissioning due to start
in Q3 2023. Photos of the pilot plant can be found at
https://www.rainbowrareearths.com/projects/gallery/
(https://www.rainbowrareearths.com/projects/gallery/) .

Rainbow is currently exploring the option of permanently establishing its
back-end rare earth oxide separation process in the USA and has identified a
potential site for a commercial scale plant.

George Bennett, CEO of Rainbow, commented: "Work has continued apace on the
Phalaborwa pilot plant and the production of the first mixed rare earth
sulphate is expected shortly. This will affirm Phalaborwa as a strategic and
near-term supply of the magnet rare earths needed to power the green economy."

"The back end of the plant is also progressing well, and we are exploring the
possibility of establishing this commercial final separation process
permanently in the USA, as we see it adding huge value to Rainbow. This would
position the Company as one of the first producers of separated rare earth
oxides within the USA, which is urgently trying to establish a domestic rare
earths supply chain, given the importance of rare earths to decarbonisation,
defence and other strategic products vital to the 21(st) century global
economy."

 

For further information, please contact:

 

 Rainbow Rare Earths Ltd   Company  George Bennett     +27 82 652 8526
                                    Pete Gardner
                                    Cathy Malins (IR)  +44 7876 796 629
                                                       cathym@rainbowrareearths.com

 Berenberg                 Broker   Matthew Armitt     +44 20 3207 7800
                                    Jennifer Lee

 Tavistock Communications  PR/IR    Charles Vivian     +44 (0) 20 7920 3150
                                    Tara Vivian-Neal   rainbowrareearths@tavistock.co.uk

 

Notes to Editors:

Rainbow Rare Earths aims to be a forerunner in the establishment of an
independent and ethical supply chain of the rare earth elements that are
driving the green energy transition. It is doing this successfully via the
identification and development of secondary rare earth deposits that can be
brought into production quicker and at a lower cost than traditional hard rock
mining projects, with a focus on the magnet rare earth elements neodymium and
praseodymium ("NdPr"), dysprosium and terbium.

The Phalaborwa Rare Earths Project, located in South Africa, comprises a total
Mineral Resource Estimate of 30.4 Mt at 0.44% TREO contained within
unconsolidated gypsum stacks derived from historic phosphate hard rock mining.
High value NdPr oxide represents 29.0% of the total contained rare earth
oxides, with economic Dysprosium and Terbium oxide credits enhancing the
overall value of the rare earth basket in the stacks. Rainbow will use a
proprietary separation technique developed by its partner K-Technologies, Inc.
for the plant at Phalaborwa, which simplifies the process of producing
separated rare earth oxides (versus traditional solvent extraction), leading
to cost benefits, as well as being more environmentally friendly.

The Phalaborwa Preliminary Economic Assessment has confirmed strong base line
economics for the project, which has a base case NPV(10) of US$627 million 1 
(#_ftn1) , an average EBITDA operating margin of 75% and a payback period of
< two years. Pilot plant operations will commence in 2023, with the project
expected to reach commercial production in 2026, just five years after work
began on the project by Rainbow.

 1  (#_ftnref1) Net present value using a 10% forward discount rate

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