Rainbow Rare Earths and Neo Performance Materials have signed a memorandum of understanding covering technical support and rare earth offtake from the Phalaborwa rare earth project in South Africa.
Under the agreement, Neo will provide technical support and design input for the project’s final solvent extraction separation circuit, while securing rights to a portion of the project’s planned production. The collaboration is focused on recovering rare earth elements from stockpiled phosphogypsum residue generated as a by-product of fertiliser production.
Neo will receive offtake rights to 40% of the Phalaborawa project’s annual production of separated neodymium-praseodymium oxide, with a purity of more than 99%, as well as 65% of its annual mixed samarium-europium-gadolinium and heavy rare earth carbonate, known as SEG+. The material includes dysprosium and terbium, which are used in permanent magnet applications.
The agreement strengthens the commercial and technical framework around the Phalaborwa rare earth project, while the companies continue work toward binding long-form agreements.
Neo to Support Separation Circuit Development
Neo has completed technical due diligence on the project, including a review of Rainbow’s process for recovering rare earth elements from phosphogypsum before separation and purification. Neo described the project as a potential secondary source of magnetic rare earth feedstock for its operations.
As part of the collaboration, Neo will provide design input and technical support for the final solvent extraction circuit. The objective is to support the intended product mix and purity planned for the Phalaborwa rare earth project.
Test work is already underway in Estonia, followed by an integrated pilot-scale campaign planned in Johannesburg. The work is intended to help define and optimise the process from rare earth recovery through final separation.
The companies will also consider toll treating the remaining 35% of the SEG+ output at Neo’s facilities. Under the proposed arrangement, separated dysprosium, terbium and yttrium would be returned to Rainbow for marketing.
The collaboration would give Neo an additional source of rare earth feedstock for its European operations. Neo’s European platform includes rare earth separation and magnet manufacturing capabilities, including facilities in Estonia.
Offtake and Technical Agreements Still Pending
The MOU provides a framework for the two companies to advance technical and commercial cooperation around the Phalaborwa rare earth project, but it does not yet represent the execution of the definitive long-form agreements.
Rainbow and Neo have committed to work toward binding agreements covering the offtake and technical arrangements, with documentation already underway. The terms outlined in the MOU remain subject to the negotiation and execution of those definitive agreements.
The project is based on the recovery of rare earth elements from legacy phosphogypsum that is stored in above-ground stacks. Rainbow’s approach is therefore focused on recovering material from existing residue rather than developing a conventional new mining operation.
For Neo, the agreement could expand its access to magnetic rare earth materials while diversifying its raw material supply chain. For Rainbow, Neo’s involvement provides technical support for the final separation stage and a potential route into downstream processing and offtake markets.
The next steps for the Phalaborwa rare earth project will depend on ongoing test work, the planned pilot-scale campaign and the negotiation and execution of the binding agreements between Rainbow and Neo.