Rainbow Rare Earths (LSE:RBW), a London-listed critical minerals company focused on producing magnet rare earth elements (REEs), reported preliminary results for the year to June 30, 2025, outlining technical progress and strategic positioning as Western nations accelerate efforts to secure non-Chinese rare earth supply chains.

China tightened export controls on key rare earth processing technologies in April and October 2025, prompting governments and manufacturers to prioritise diversification.

Magnet rare earth elements (REEs) are essential for EV motors, wind turbines, drones, and defence systems. Rainbow said its Phalaborwa project in South Africa is emerging as a near-term source of both light and heavy rare earths those sectors require.

The company highlighted $50mn in equity backing from the U.S. International Development Finance Corporation (DFC) via TechMet, alongside Ecora Resources (LSE:ECOR), which selected Phalaborwa for its first REE royalty investment. Rainbow said this supports its aim to supply responsibly sourced magnet rare earths to Western markets.

Phalaborwa involves processing phosphogypsum, a waste by-product from historical phosphate production, rather than traditional mining. Rainbow said this positions the project at the low end of the global cost curve, with no ore extraction, waste stripping, or haulage, and delivers rehabilitation and environmental benefits.

Rainbow confirmed it has produced a high-purity mixed rare earth product (MREP) averaging over 55% TREO, exceeding standard commercial specifications. Evaluation work is ongoing to determine downstream processing into NdPr oxide and a SEG+ concentrate containing medium and heavy rare earths.

A pilot-scale plant will now be operated to validate flowsheet refinements and confirm expected capital and operating cost reductions. The Definitive Feasibility Study remains scheduled for 2026, with permitting and financing to proceed in parallel. Construction is targeted for 2027, subject to approvals.

In Brazil, Rainbow is advancing the Uberaba project with The Mosaic Company, with an economic assessment underway to replicate Phalaborwa’s flowsheet on a potentially larger scale. The company said longer-term strategy involves deploying its phosphogypsum-to-REE technology in Saudi Arabia, Morocco and Canada.

Chief executive George Bennett said 2025 had been “transformative,” noting the company had “successfully achieved economic recovery of magnet rare earths from phosphogypsum,” which he described as a key technical milestone after “decades” of unsuccessful attempts across the industry.

“Our Johannesburg laboratory, equipped with Africa’s first ICP-MS facility, has accelerated optimisation work and is preparing for pilot-scale validation. The upcoming Definitive Feasibility Study, expected in 2026, will incorporate these optimisations to ensure Phalaborwa remains at the bottom of the global cost curve.

“Our success at Phalaborwa provides a model for our Uberaba project in Brazil and potential future partnerships in Saudi Arabia, Morocco, and Canada. With growing offtake interest, Rainbow is poised to become a leading supplier of responsibly sourced rare earths.”