Rainbow Rare Earths, the London-listed developer behind a rare earths project at Phalaborwa in Limpopo, has told investors that its definitive feasibility study will now finish in 2027, while it brings forward a shorter pre-feasibility study for the fourth quarter of 2026. The update came in the company’s results for the year ended 30 June 2026, published on 21 October, and in a letter to shareholders from chief executive George Bennett.
The project turns waste into a possible supply of magnet metals
Phalaborwa is not a conventional mine. Rainbow wants to recover rare earth elements from phosphogypsum, a waste left by phosphoric acid production. Mining Weekly reports that the waste sits in two unlined gypsum stacks, beside an old opencast mine and a dormant Sasol phosphoric acid plant, and that removing it would help clean up a legacy environmental problem.
The target products are separated neodymium and praseodymium oxide, which are used in permanent magnets, and a carbonate containing samarium, europium, gadolinium and other elements. According to the company’s results announcement, that second product also contains dysprosium, terbium and yttrium.
A failed first route forced a change of plan
The results are candid about what went wrong. Rainbow originally expected continuous ion chromatography to be the most efficient way to separate the individual elements. Bennett wrote that test work with its technical partner for that method “did not deliver the expected results”. The company responded by setting up its own laboratory in Johannesburg, which it says replaced outsourced test work that meant waiting weeks for results, and by switching to solvent extraction, which Bennett described as the global industry standard.
Canadian company Neo Performance Materials has been selected as technical partner for the solvent extraction stage. Rainbow says this will be paired with a long-term offtake agreement with Neo for the neodymium, praseodymium and samarium-europium-gadolinium products at market-competitive pricing. Both parts are subject to binding agreements being signed, so neither is final yet.
Initial bench and pilot test work is already running at Neo’s facility in Estonia using high-grade rare earth solution from Phalaborwa. An integrated pilot plant for the separation circuit will then run in Rainbow’s Johannesburg laboratory. Bennett said that sequence pushes completion of the definitive feasibility study into 2027. He also acknowledged that commissioning the company’s pilot plant “has taken longer than we originally expected”.
The money lasts, but only if the timetable holds
Rainbow reported a loss of US$7.5 million for the year, compared with US$3.2 million a year earlier. The company attributes the increase to a US$3.0 million fair value loss on the revaluation of its royalty liability to Ecora, set against a US$1.2 million gain in the prior year. That is an accounting movement rather than cash spent. Administration expenses were stable at US$3.8 million.
Cash stood at US$12.9 million at 30 June 2026, up from US$3.9 million, after a share placing completed in April that raised gross proceeds of £11.1 million, about US$14.7 million. The directors’ base case forecasts a cash outflow of US$14.8 million over the 18 months to 31 December 2027, including US$5.4 million for the Phalaborwa studies and permitting and US$1.7 million for a pre-feasibility study at the company’s Uberaba project in Brazil. The downside scenario the board reviewed totals US$20.1 million.
Put plainly, the base case spends slightly more than the cash on hand at year-end, and the downside case, which includes early engineering and site works ahead of construction, spends considerably more. The announcement as read does not set out how the gap would be financed, and any construction funding for Phalaborwa is a separate and much larger question that the pre-feasibility study is meant to start addressing.
Permitting is the step to watch for local business
Bennett called permitting a critical path item. Brent Holme has joined as environmental, social and sustainability manager to lead the final Phalaborwa permitting process, and Bennett said South Africa “has a well-established permitting timeline, which does not need to wait for a DFS to be completed”. The company says the pre-feasibility study will define the final products, processes and waste streams with enough certainty to begin financing and restart permitting work in earnest.
For South African business, the project touches several sectors at once. If it proceeds, it would involve fertiliser industry waste, specialised chemical processing, engineering and construction contractors in Limpopo, and a rare earths supply chain that currently has little local presence. Those prospects depend on approvals and funding that have not yet been secured. The results also note that the group does not yet have legal ownership of any land associated with its Phalaborwa and Uberaba projects.
What is still unknown
Several points remain unanswered. The binding agreements with Neo have not been signed, and the offtake terms beyond “market-competitive pricing” have not been disclosed in the material reviewed. The pre-feasibility study will be the first document to show capital cost, production volumes and the treatment of the waste streams, and it is not yet published. Rainbow also says it will be the first company to deliver a low-cost, commercial solution for recovering rare earths from phosphogypsum. That is the company’s own claim, and it will be tested by the pilot results and by the studies due over the next year.
