Rare Earths Partnership
Rainbow Rare Earths Partners With Neo Performance Materials for Phalaborwa Project
Anonymous
Key Points
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Phalaborwa is designed to recover rare earths from legacy phosphogypsum residue—an above-ground by-product of fertilizer production. Neo said it had conducted technical due diligence on Rainbow’s recovery process and viewed the project as a promising secondary source of magnetic rare earths.
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The planned separated NdPr oxide is intended to exceed 99% purity, while the SEG+ product includes dysprosium and terbium, among other rare earths.
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The companies will consider having Neo toll-treat the remaining 35% of Phalaborwa’s SEG+ output, with separated dysprosium, terbium and yttrium returned to Rainbow for marketing.
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Rainbow is targeting first commercial production from Phalaborwa in 2028; the project was previously estimated to require $326 million in capital, according to Article 1.
Rainbow Rare Earths has partnered with Neo Performance Materials to develop the final separation process for its Phalaborwa rare earths project in South Africa. Northern Miner reports that Neo will provide technical support and design expertise, gaining rights to 40% of neodymium-praseodymium oxide output and 65% of heavy rare earth carbonate production at market-linked prices. The deal accelerates Rainbow's path to first commercial production in 2028.
Phalaborwa recovers rare earths from phosphogypsum, a waste product from fertilizer manufacturing. Testing is already underway at Neo's Estonian facilities, with pilot work planned in Johannesburg. Mining Weekly reports the partnership supports Rainbow's schedule to publish a pre-feasibility study by late 2026 and complete a definitive feasibility study in the first half of 2027.
How the Partnership Splits Production Rights
Under the memorandum of understanding, Neo receives offtake rights to specific product streams. Finance Yahoo states Neo secures 40% of planned neodymium-praseodymium oxide at 99%+ purity and 65% of mixed rare earth carbonate (SEG+) containing dysprosium and terbium. Prices are linked to market indices to protect both parties from cost swings.
Rainbow retains the remaining production. The companies will also explore toll-treatment arrangements, where Neo processes Rainbow's leftover 35% of SEG+ output and returns separated dysprosium, terbium and yttrium to Rainbow for marketing. This flexibility lets Rainbow monetize all rare earth streams.
Why Neo Sees Value in Phosphogypsum Recycling
Neo conducted extensive technical due diligence on Rainbow's recovery process before committing. Mining Technology notes Neo views Phalaborwa as a "promising secondary source of magnetic rare earths"—particularly neodymium and praseodymium, which are critical for permanent magnets in electric vehicles and wind turbines. Recycling phosphogypsum sidesteps the environmental costs of primary mining.
Phalaborwa's leverage as a secondary source stems from sheer volume. Decades of phosphate fertilizer production left massive phosphogypsum piles above ground in South Africa. Extracting rare earths from this waste improves the project's economics and global supply security without new environmental footprints.
Development Timeline Supports 2028 Target
Rainbow is moving quickly through feasibility stages. A pre-feasibility study is due in Q4 2026, followed by a definitive feasibility study in the first half of 2027. Northern Miner reports this schedule aligns with efforts to secure financing and permits. First commercial production is targeted for 2028.
The partnership with Neo removes a major technical hurdle. By outsourcing final separation circuit design to an experienced processor, Rainbow avoids costly design mistakes and accelerates permitting timelines. The $326 million capital requirement means project execution speed is essential to attracting investor confidence.
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