Rainbow Rare Earths (stock ticker: RBW, listed on the London Stock Exchange) is a mining and processing company that is still in the building phase — meaning it hasn't sold a single product yet. Its goal is to extract a group of metals called rare earth elements from industrial waste piles, and sell those metals to manufacturers who need them to make electric motors, EV batteries, wind turbines, fighter jets, and robots.

Think of rare earth elements like the vitamins your body can't make on its own — modern technology can't function without them, but they're hard to get. The world gets roughly 70–90% of its supply from China, which means Western countries (especially the US) are dangerously dependent on a geopolitical rival for materials their entire defence and green energy industries rely on. Rainbow's job is to change that.

Rare earth elements (often called REEs, or REO — rare earth oxides — when in processed powder form) are a group of 17 metals. Despite their name, they're not particularly rare in the ground — they're just hard to find in concentrations worth mining, and very expensive to process.

The ones Rainbow focuses on are:

• Neodymium (Nd) and Praseodymium (Pr) — always written together as "NdPr" — are the key ingredients in the world's strongest permanent magnets. These magnets are used in electric vehicle motors, wind turbine generators, and the servo motors inside robots. Without NdPr, you cannot build a scalable EV industry or a wind farm.
• Dysprosium (Dy) and Terbium (Tb) — these are called "heavy rare earths" (HREE). They are added to NdPr magnets to make them perform at high temperatures without losing their magnetic power. Without Dy and Tb, EV motors and military equipment overheat and degrade. These are even more scarce and strategically sensitive than NdPr.
• Yttrium (Y), Samarium (Sm), Europium (Eu), Gadolinium (Gd) — other valuable rare earth metals Rainbow will produce as a bonus alongside the main products.

Global demand for these materials is growing fast — estimated to nearly double from around 211,000 tonnes in 2024 to around 368,000 tonnes by 2040, mostly driven by EVs, wind energy, and robotics.

Here's what makes Rainbow genuinely different from almost every other rare earth company in the world: they don't mine rock.

Most rare earth companies dig up hard rock ore, crush it, run it through multiple chemical processes, and eventually produce the rare earth elements — a very expensive, time-consuming, and environmentally messy process.

Rainbow uses phosphogypsum — a white powdery waste material that is literally sitting in giant stockpiles above ground, created decades ago as a by-product of making fertiliser from phosphate rock. These piles already contain rare earth elements, the rock has already been chemically broken down in the industrial process that created the waste, and Rainbow just has to leach the metals out with acid and then separate them.

Rainbow has the rights to process those piles and owns 85% of the project (with an option to buy the remaining 15%).

How big is the deposit? The officially certified resource (audited by independent geologists to JORC international standards — the mining industry's rulebook for proving a deposit is real) is 35 million tonnes of phosphogypsum at 0.44% rare earth content. The plan is to process 2.2 million tonnes per year, giving a project life of 16 years.

What will Phalaborwa produce each year at full output?

• About 1,850 tonnes of NdPr oxide — the key magnet material for EVs and wind turbines
• About 80 tonnes of Dysprosium and Terbium — the heat-resistant additive used in military and EV applications
• About 140 tonnes of Yttrium — used in electronics and LEDs

A 70% profit margin is extraordinary by any standard. For comparison, Apple — one of the world's most profitable companies — runs a profit margin of about 25–30%. The reason Phalaborwa can achieve this is the low-cost feedstock (waste material that's already been processed) and the high prices that rare earth magnets command, especially in Western markets where China cannot sell due to geopolitical tensions.

Also note: the economics above don't include any revenue from yttrium, samarium, europium, gadolinium, or the clean gypsum by-product that will also come out of the process. Those are all bonus revenue streams not yet counted.

Where they are right now (June 2026): Rainbow has proven the chemistry works. They have a large pilot plant at the Mintek laboratory in Johannesburg producing about 1 kg per day of the rare earth product — above the commercial quality requirement. The next step is completing a "Definitive Feasibility Study" (DFS) — basically the full engineering blueprint and final cost estimate that banks and investors need to see before they'll lend money to build the actual plant.

Uberaba is earlier-stage and won't go into production until around 2030. But the fact that Rainbow has two world-class phosphogypsum projects — not just one — is a significant differentiator versus other rare earth developers.

Rainbow also has a third project in Burundi (East Africa) called Gakara. This one is a traditional hard-rock rare earth mine and was actually producing small quantities before the Burundian government suspended operations in June 2021 for political reasons. It has been mothballed ever since, with Rainbow spending a small amount to keep it maintained while trying to negotiate a resolution with the government.

The asset has been written off the books (its value set to zero). It's a background issue — not adding value right now, but potentially recoverable if the political situation improves.

The backstory: China controls around 70% of rare earth mining globally and more than 90% of all the processing (turning raw material into purified metals). In April 2025, China banned the export of Dysprosium, Terbium, and other heavy rare earth metals to Western countries — and Western manufacturers who depend on these materials for EV motors and military equipment immediately faced factory shutdowns.

The US Government has been scrambling to secure supply chains outside China, and Phalaborwa is on their shortlist. Specifically:

• The US International Development Finance Corporation (DFC) — think of it as the US Government's overseas investment arm — has committed US$50 million in equity (part-ownership) for the Phalaborwa project. Announced at the UN Climate Conference (COP28), it will be invested through a company called TechMet, Rainbow's second-largest institutional shareholder.
• In July 2025, the US Government signed a deal with MP Materials (a US rare earth miner) guaranteeing to pay a minimum of US$110 per kg for NdPr — an effective government-backed floor price for rare earths in the US market. This sets a precedent that Phalaborwa's output would naturally benefit from.
• The US Government's "Project Vault" is a strategic stockpiling and procurement programme for critical minerals. The company Traxys Group — one of the world's largest rare earth traders and a key Project Vault partner — just invested in Rainbow's April 2026 fundraise. Traxys putting money directly into Rainbow is a very strong signal that they plan to be a buyer of Phalaborwa's production when it comes online.
• A January 2025 Executive Order from President Trump explicitly directed the US to become the world's leading producer and processor of rare earth minerals.

Put together, this means Rainbow has the informal backing of the US Government as a strategic supplier — which significantly reduces the risk that Phalaborwa's product won't find buyers and strengthens the case for project financing.

The management team's high personal ownership (the CEO and Chairman together own about 20%) is a strong positive signal — it means they are genuinely incentivised to succeed because their own money is on the line.

Traxys Group also became a shareholder in April 2026 — they led the latest fundraise alongside two US family offices. Since Traxys is one of the biggest rare earth trading companies in the Western world, their investment is a vote of confidence that they believe this project will produce material they can sell.

That's about a 25% increase in share count in 2.5 years, which means an existing investor's slice of the company got about 20% smaller over that period even if the share price didn't move.

The royalty deal explained: in July 2024, Rainbow sold a "royalty" to a company called Ecora Resources for US$8.5 million cash. A royalty means Ecora will receive 1.10% of all future gross revenue from Phalaborwa, forever, as payment for that upfront loan. This was a clever way to raise money without issuing as many shares — but it does mean 1.10% of revenue is permanently owed to Ecora once production starts.

Rainbow hasn't signed final binding sales contracts yet, but has several advanced discussions underway. The likely buyers fall into a few categories:

For the NdPr oxide (main product — the EV/wind turbine magnet material):

• Less Common Metals (LCM) — a UK company that is one of the world's leading manufacturers of NdPr alloy for permanent magnets. Rainbow already has an agreement with LCM as a buyer of its separated rare earth products.
• Western magnet manufacturers — companies making permanent magnets for EV motors, wind turbines, and industrial machinery who need non-Chinese supply.
• US Government supply chain programmes — Project Vault and similar US procurement initiatives.

For the SEG+ product (the heavy rare earths — Dy, Tb, Y, Sm, Eu, Gd): this is actually the most important product from a strategic standpoint. After China banned exports of Dy and Tb in 2025, Western manufacturers who need them for military equipment, EV motors, and advanced electronics are desperately looking for alternative suppliers. Rainbow is one of the only projects in the world outside China that produces meaningful quantities of both Dy and Tb. This gives them significant pricing power and near-certain buyer interest from:

• Western defence contractors (F-35 manufacturers, missile guidance systems, submarine motors)
• European EV and industrial motor manufacturers
• US Government strategic stockpile purchases

Rainbow's competitive advantage is its combination of: (1) lowest-cost production model; (2) being one of the only Western projects producing both light and heavy rare earths; and (3) having formal US Government financial backing. No other development-stage project has all three.

In April 2025, China imposed export controls on Dysprosium, Terbium, and several other key rare earth elements. This was China's version of an economic weapon — essentially saying "if you want to put tariffs on our goods, we'll cut off the metals your defence and EV industries cannot function without."

The effect was immediate. European and American factories making EV motors, wind turbines, and military hardware suddenly couldn't get the materials they needed. Prices for ex-China heavy rare earths went up sharply. Western governments went into emergency mode.

This is the single most important event in Rainbow's story, because it turned their project from "a useful future supply source" into "an urgent strategic priority." It's also why Traxys invested in April 2026 — they are directly plugged into US Government procurement and know exactly what the demand picture looks like.

Something most people aren't talking about yet: robotics.

Humanoid robots and industrial automation systems use electric motors — and those motors require rare earth permanent magnets, just like EV motors do. The global robotics market is growing from about US$53 billion in 2024 and is forecast to grow at 16%+ per year, potentially creating demand for up to 150,000 tonnes of rare earth permanent magnets per year by 2040 — which could actually exceed electric vehicles as the single biggest buyer of rare earth magnets.

This demand wasn't in anyone's models five years ago. It means the supply shortage for NdPr, Dy, and Tb could be even more severe than current forecasts suggest, which would push prices higher and make projects like Phalaborwa more valuable than their current economic studies show.

The research surfaced several important things that Rainbow hasn't fully disclosed publicly, and that matter to understanding the investment:

• Is the US$50M from the US Government actually locked in, or conditional? The DFC committed US$50 million in 2023 at COP28, but it hasn't been drawn yet. Is this a binding legal commitment that will definitely happen when construction starts, or still conditional on the DFS being completed and the project meeting certain criteria? This distinction is critical for understanding how solid the project financing really is.
• What are the actual terms of the sales agreement with LCM? We don't know the price formula, the volume commitment, or whether LCM is legally obligated to buy (a "take or pay" contract) or simply has the option to buy. Banks lending money for construction typically require formal, binding sales contracts — without one, the financing process gets harder.
• Could Rainbow build a simpler, cheaper version first? Management has hinted at a strategic option: instead of building the full plant all at once, start by selling a "semi-processed" mixed rare earth product (which needs less equipment to produce), generate early cash flow, then add the full separation plant later. This could cut the initial build cost from US$326M to perhaps US$200M, reduce financing risk, and get money flowing sooner. Has this been formally evaluated?
• Who owns the 15% of Phalaborwa that Rainbow doesn't control? Rainbow has the option to buy it, but we don't know who owns it, what the option terms are, or whether Rainbow has exercised it yet. This matters for governance and for how profits are eventually split.
• What's the plan for Burundi? The Gakara mine is sitting idle, costing money to maintain, and represents an unresolved political negotiation. What's the endgame — sell it, restart it, or write it off entirely?