Rainbow signs strategic supply agreement with UK-based rare earth alloy manufacturer

In continuing its efforts to be a forerunner in the establishment of an independent rare earth elements (REEs) supply chain in the UK, London-listed Rainbow Rare Earths has entered into a strategic supply agreement with Less Common Metals (LCM) to develop a Western supply chain for REEs.

In terms of the agreement, Rainbow will supply LCM with REEs designated as critical minerals, with LCM being the only rare earth metal and alloy manufacturer in the UK – and one of the few facilities outside of China.

LCM occupies a unique position in the rare earths pipeline as it is the only company in the Western world commercially producing both the highly specialised strip-cast alloys and all of the required rare earth metals needed for the production of the highest-performance neodymium iron boron magnets.

The materials that Rainbow will supply to LCM, magnet-separated rare earth oxides (REOs) neodymium, praseodymium, dysprosium and terbium, are the most economically important REEs owing to their use in making permanent magnets, which are, in turn, essential to decarbonisation as they are used in the manufacture of wind turbines and electric vehicles.

These elements are also designated as critical minerals in the UK’s Critical Minerals Strategy.

The separated REOs supplied by Rainbow will be used for manufacturing into metal to create an alloy, which will then be supplied to permanent magnet manufacturers in the US and the European Union (EU).

Rainbow’s vision of establishing an REE supply chain outside of China aligns with LCM’s ambitions to invest in expanded capacity in North America, the EU and Asia.

LCM had been looking to partner with a supplier with similar values to secure ethical supply of the feedstock required for their business. Rainbow was chosen as a partner after a lengthy evaluation process of various rare earth development companies globally, based on its capability to develop REE to the separated rare oxide stage using proprietary technology developed by its partner K-Technologies.

Rainbow CEO George Bennett comments that, in turn, LCM’s 30 years of experience in the manufacture and supply of metals and alloys to the permanent magnet industry makes it a superior partner of choice for Rainbow.

“Using its expertise to expand in the US and the EU, LCM will be instrumental in meeting the huge demand for permanent magnets,” he adds.

The companies will soon set out a framework to negotiate a binding offtake agreement for separated REOs from Rainbow’s Phalaborwa project, in South Africa, with the ultimate customer of rare earth permanent magnets also to be defined.

Volumes will be driven by LCM’s requirements for its expanded facilities and pricing will be as per published REO prices at that point in time. Any surplus production from Phalaborwa will be sold on the open market to third parties.

Phalaborwa contains about 35-million tonnes of gypsum resulting from historic phosphate hard rock mining, containing REEs with an estimated average in situ grade of 0.6% total rare earth oxides.

Rainbow earlier in September produced its first batch of mixed rare earth sulphate, totalling 3 kg, from a front-end pilot plant. This batch has been shipped to the back-end pilot plant, situated at K-Technologies in Florida, in the US, for separation into REOs during the last quarter of this year.