Rainbow Rare Earths ink supply deal with UK-based alloy producer

Rainbow Rare Earths (LSE: RBW) announced on Monday a strategic supply agreement with U.K.-based Less Common Metals Ltd (LCM) to provide magnet separated rare earth oxides neodymium and praseodymium, dysprosium and terbium.

The elements are designated as ‘critical minerals’ in the UK’s Critical Minerals Strategy and used in electric vehicles and wind turbines, as well as in defence and other high-tech products.

LCM is a world leader in the manufacture and supply of complex alloy systems and metals.

According to the company, the separated rare earth oxides to be supplied by Rainbow from its Phalaborwa project in South Africa will be used for manufacturing into metal in order to create an alloy, which is then supplied to permanent magnet manufacturers in the EU and the U.S.

LCM is currently the only rare earth metal and alloy manufacturing facility in the U.K. and among the few such facilities in the Western world.

The announcement of the supply deal comes just a few days after Rainbow reported that the front end of its Phalaborwa pilot plant successfully produced its first batch of mixed rare earth sulphate of 3 kg. The 58% mixed rare earth sulphate with a 65% recovery contains the four most economically important rare earths of neodymium and praseodymium, dysprosium and terbium, and is in line with the expectations of Rainbow’s preliminary economic assessment (PEA), published in October 2022. 

Pilot-scale production at Phalaborwa started in June. According to the PEA, Phalaborwa will produce 26,208 tonnes of separated magnetic rare earth oxides over 14.2 years. 

A March resource update for Phalaborwa estimated it hosts a Joint Ore Reserves Committee-compliant resource of 30.4 million tonnes grading 0.44% total rare earths oxides (TREO), with neodymium and praseodymium representing 29% of the TREO, with economic quantities of terbium and dysprosium.

Shares of Rainbow Rare Earths rose as high as 7% to £17.10 ($29.06) on Monday in London, valuing the company at £97.3 million ($165.3 million). Its shares traded in a 52-week range of £7.02 and £18.00.