In its ongoing efforts to lead the establishment of an independent rare earth elements (REEs) supply chain in the UK, Rainbow Rare Earths, a London-listed company, has entered into a strategic supply agreement with Less Common Metals (LCM) to develop a Western supply chain for REEs.
Under this agreement, Rainbow will provide LCM with REEs that are designated as critical minerals. LCM is the sole manufacturer of rare earth metals and alloys in the UK and one of the few facilities outside China with this capability.
LCM holds a unique position in the rare earths industry as it is the only Western company commercially producing both highly specialized strip-cast alloys and all the necessary rare earth metals required for manufacturing high-performance neodymium iron boron magnets.
The materials that Rainbow will supply to LCM, including neodymium, praseodymium, dysprosium, and terbium, are economically vital REEs due to their use in the production of permanent magnets. These magnets play a crucial role in decarbonization efforts as they are used in wind turbines and electric vehicles. These elements are also recognized as critical minerals in the UK’s Critical Minerals Strategy.
Rainbow’s supplied rare earth oxides (REOs) will be used by LCM to create alloys, which will then be provided to permanent magnet manufacturers in the US and the European Union (EU).
Rainbow’s goal of establishing an REE supply chain outside of China aligns with LCM’s plans to invest in expanded capacity in North America, the EU, and Asia.
LCM sought a partner with similar values to ensure an ethical supply of the required feedstock for their business. Rainbow was selected after an extensive evaluation of various rare earth development companies globally, based on its capability to develop REEs to the separated rare oxide stage using proprietary technology developed by its partner, K-Technologies.
George Bennett, CEO of Rainbow, emphasizes that LCM’s 30 years of experience in manufacturing and supplying metals and alloys to the permanent magnet industry makes it the preferred partner for Rainbow. He adds that LCM’s expertise in expanding its presence in the US and the EU will be instrumental in meeting the growing demand for permanent magnets.
The companies will soon establish a framework for negotiating a binding offtake agreement for separated REOs from Rainbow’s Phalaborwa project in South Africa. The ultimate customer for rare earth permanent magnets will also be determined in due course.
The volumes of supply will be driven by LCM’s requirements for its expanded facilities, and pricing will be determined based on published REO prices at that time. Any surplus production from the Phalaborwa project will be sold on the open market to third parties.
The Phalaborwa project contains approximately 35 million tonnes of gypsum resulting from historic phosphate hard rock mining, which contains REEs with an estimated average in-situ grade of 0.6% total rare earth oxides.
In September, Rainbow successfully produced its first batch of mixed rare earth sulphate, totaling 3 kg, from a front-end pilot plant. This batch has been sent to the back-end pilot plant located at K-Technologies in Florida, USA, for separation into REOs during the last quarter of this year.
