TIDMRBW
RNS Number : 9315P
Rainbow Rare Earths Limited
23 February 2021
Rainbow Rare Earths Limited
("Rainbow" or the "Company")
(LSE: RBW)
23 February 2021
Feasibility of 10,000tpa Gakara Down-Stream Processing Plant
Confirmed
Rainbow Rare Earths Ltd is pleased to provide an update on the
feasibility of a processing facility to produce a high-purity
cerium-depleted mixed rare earth carbonate from the Company's
Gakara Rare Earths Project ("Gakara").
Metallurgical Engineering Technology and Construction (Pty) Ltd
("METC") was engaged by Rainbow to re-validate and update a
preliminary economic assessment ("PEA") conducted in 2015 by SGS
Lakefield Canada Inc ("SGS"), providing an optimised scoping study
("the study").
Highlights
-- The study has confirmed the feasibility of a 10,000tpa rare
earths element ("REE") cracking plant (the "plant"), doubling its
capacity from 5,000tpa, originally proposed in the SGS PEA, based
on the Strong Acid Agitated Bake ("SAAB") process developed from
the test work completed by SGS;
-- METC optimised the process, incorporating newer technologies,
to deliver a flowsheet capable of producing a high-grade
cerium-depleted mixed rare earth carbonate, containing
approximately 39% neodymium and praseodymium ("NdPr"), the critical
input materials for permanent magnets required for electric vehicle
("EV") and wind turbine technology;
-- The 2020 capital cost of US$35.2 million, estimated by METC,
for a 10,000tpa plant (US$3,522 per tpa) compares favourably to the
SGS 2015 estimate of US$22.3 million for a 5,000tpa plant (US$4,456
per tpa). The operating cost estimate produced by METC is
US$1,279/t, compared to the original SGS estimate of US$1,654/t.
This represents a 21% reduction in capital intensity and 23% in
operating cost, providing an expected resilience to the project
economics, even in the event of a volatile pricing environment;
and
-- The proposed plant location in South Africa would provide
strong synergies with Rainbow's other rare earths project at
Phalaborwa, contribute to the local economy and facilitate a
sustainable, transparent rare earths supply chain.
George Bennett, CEO, said: "The validation of the feasibility of
a 10,000tpa down-stream processing plant provides Rainbow with the
opportunity to deliver a significantly higher share of the total
contained metal value of the Gakara project for our shareholders.
The estimated capital and operating costs of this plant would
likely be some of the lowest in the industry and therefore viable
even in the event of volatile rare earths prices. This confirms our
belief that Gakara has the potential be a low capital intensity
project.
Dave Dodd, Rainbow's Technical Director, commented: "The ability
to produce a high-purity NdPr-rich, cerium-depleted, mixed rare
earth carbonate product at low capital and operating costs
demonstrates the potential of the robust, long-term economics of
our Gakara project.
We already operate Africa's only producing rare earths operation
at Gakara, via the current trial mining operations, which employ a
simple, reagent-free, low capital and operating cost gravity
concentration process. By further processing the concentrate, we
have the potential to participate in a greater proportion of the
value chain, producing the rare earth elements required to
accelerate the global green energy transition. These factors
combined serve to further strengthen our determination to
confidently progress through to commercial scale production at
Gakara."
SGS originally successfully tested five process routes and
developed a flowsheet based on a SAAB process to produce a
cerium-depleted mixed rare earth carbonate from a 5,000tpa plant
with a capital cost of US$23 million.
In December 2020, METC updated and optimised the scoping study,
by reviewing and analysing the process design criteria from the SGS
PEA. As a result, METC upgraded the processing capacity of the rare
earths elements cracking plant from the originally proposed
5,000tpa to 10,000tpa. Based on the work carried out to date, the
plant demonstrates low capital intensity of US$35.2 million and
operating costs of US$1,279/t.
By integrating the downstream processing of the Gakara rare
earths concentrate into a cerium-depleted mixed rare earths
carbonate into Rainbow's business model, the Company has the
potential to participate in a larger segment of the overall value
chain.
The study identified South Africa as an optimal location for the
processing plant. This would facilitate significant synergies for
the Company, given the location of its Phalaborwa Rare Earths
Project, near Pretoria in South Africa. By locating the processing
plant within the industrial hub of Johannesburg, the study
confirmed that Rainbow would realise cost efficiencies in the areas
of reagents, power and transport. Whilst power consumption is not
expected constitute a significant proportion of the overall
operating costs, the use of renewable energy would be considered,
in line with Rainbow's commitments as an environmentally
responsible producer.
**ENDS**
For further information, please contact
Rainbow Rare George Bennett
Earths Ltd Company Pete Gardner +27 82 652 8526
SP Angel Corporate Ewan Leggat
Finance LLP Broker Charlie Bouverat +44 (0) 20 3470 0470
--------- ------------------- --------------------------------------
Flagstaff Strategic Tim Thompson +44 (0) 207 129 1474
and Investor Fergus Mellon rainbowrareearths@flagstaffcomms.com
Communications
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Notes to Editors:
Rainbow's strategy is to become a globally-significant producer
of rare earth metals. NdPr are vital components of the strongest
permanent magnets used for the motors and turbines driving the
green technology revolution. Analysts are predicting demand for
magnet rare earth oxides will grow substantially over the coming
years, driven by increasing adoption of green technology, pushing
the overall market for NdPr into deficit.
The Company's Gakara Project in Burundi, which produces one of
the highest-grade concentrates in the world (typically 54% total
rare earths oxides ("TREO")) through ongoing trial mining
operations, is currently the only African producer of rare earths.
The Gakara basket is weighted heavily towards NdPr, which account
for over approximately 19.5% of the contained TREO and 85% of the
value of the concentrate.
The Phalaborwa Rare Earths Project, located in South Africa,
comprises approximately 35 million tonnes of gypsum tailings
stacked in unconsolidated dumps derived from historic phosphate
hard rock mining, containing rare earth elements with an initial
estimated average in situ grade of 0.6% TREO, based on previous
sampling campaigns, of which +/- 30% comprises high-value NdPr. The
rare earths are contained in chemical form in the gypsum dumps,
which is expected to deliver a higher-value rare earth carbonate,
with lower operating costs than a typical rare earth mineral
project.
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END
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