Production is gearing up at one of the
world’s only non-Chinese rare earth producers,
with 5,000 tonnes of rare earth concentrate expected to reach
the market next year, following the first commercial shipments
and a fresh £2.8 million ($3.7 million) share issue.
On 5 December Rainbow Rare Earths
announced that it has sold its first shipment of rare earths
from the Gakara project in Burundi, with the unusually high
grade of the deposit helping the projects commercial
With production now expected to ramp up
rapidly in the coming months, Rainbow looks set to be one of
very few rare earth projects outside China.
The company has shipped 25 tonnes of
high-grade rare earth concentrate by road to the port of
Mombassa in Kenya, it said.
The material will then be shipped to steel
maker ThyssenKrupp. This concentrate can then be separated out
in different rare earth elements.
Mining is already taking place at the
site, while the processing plant is in final commission, and is
expected to be completed by the end of the month.
On 12 December, Rainbow announced it had
raised £2.8 million in a share issue, in order to enact
its current production plans, and to further explore the
"Some of the money is to accelerate our
planned growth," Rainbow CEO Martin Earles told Industrial
Minerals. "Part of the raise is for a drilling campaign."
The money will help the miner hit its
previously announced target of 5,000 tpy of concentrate next
year, increasing to 6,000 tpy by 2019.
The US Geological Survey saw world rare
earth production in 2016 at 126,000 tonnes, with China making
up 105,000 tonnes and Australia the next largest at 14,000
But the money will also be used to examine
"interesting anomalies" in the deposit which could allow for
further expansion of production.
"We don’t see the target of
6,000 tonnes as the end of the process," Eales said.
The existing offtake agreement with
ThyssenKrupp will cover production of up to 10,000 tonnes per
year, over the next 10 years.
Although the so-called rare earths are
actually relatively common in the earth’s crust,
concentrated deposits are rare, and separation of the ore into
different elements is both laborious and potentially
Chinese rare earth producers came to
dominate the market in the early 2000s. New projects started,
and others were restarted, around the world in 2011, when
prices started to rise. But an increase in Chinese output and
exports sent prices crashing back down in 2012, with
non-Chinese production falling.
Since then, almost all the
world’s rare earth production has remained within
China, with effectively the only other source of the elements
being Lynas Corp, in Australia.
So even with the recovery in pricing this
year, being driven both by rising demand and a drive to
rationalise the Chinese industry, Eales said he did not expect
to see many new developments outside China.
"Fundamentally it is pricing that has held
back development," Eales said. But he said that the high purity
of the deposit meant that the Burundi facility was on the "low
part of the cost curve".
"Even at the start of the year, we had a
profitable operation," Eales said, adding that given the grade,
"we could operate profitably where the prices were at the start
of the year".
In addition to the high rare earth oxide
content of the ore mined at Gakara, the specific mix of
elements in the deposit makes it more commercially viable.
The mix mined at Rainbow’s
facility is particularly rich in neodymium and praseodymium,
which make up some 20% of the total rare earth oxides in the
ore, and around 80% of its total value.
Neodymium and praseodymium are used in the
production of permanent magnets. Demand for these materials is
currently rising rapidly thanks to their application in
electric motors, used in battery powered cars, and in the
generators used in wind turbines.
"I don’t think
there’s any disagreement that demand is
increasing," Eales said. "Everyone has a difference view of the
rate of change... but there is not a lot of new
This article was corrected to show
that the amount raised in Rainbow's most recent share
issue was £2.8 million, not $2.8