Rainbow Rare Earths has said it received confirmation that proposed US$50 million TechMet investment in the Phalaborwa rare earth (REE) project to be funded by the U.S. International Development Finance Corporation (DFC).
According to Rainbow, TechMet has been granted an option to invest US$50 million as part of the equity funding component for the Phalaborwa capital cost, which will see TechMet take a direct ownership stake at project level.
The TechMet stake will be dependent on the net present value set out in the definitive feasibility study for the project. Based on the agreed formula, the equity stake will be within a range of 15-33%, underpinning a valuation of the project equity at between US$151.5 million and US$333.3 million.
The company said that DFC’s US$50 million funding commitment announced at COP28, the United Nation’s Climate Change Conference, demonstrating the global effort to responsibly scale production of the metals essential for clean energy technologies.
The Phalaborwa project in South Africa recognised as having the potential to play a significant role in the establishment of a more diversified Western supply chain of the critical rare earths vital for electric vehicles and wind turbines, as well as many other advanced technologies
The four rare earths that will be produced at Phalaborwa – neodymium, praseodymium, dysprosium and terbium – are all designated as critical minerals further to their important role in the transition to the green economy.
Rainbow Rare Earths is focused on the development of the Phalaborwa rare earths project in South Africa and the earlier stage Uberaba project in Brazil.
The DFC is a U.S. Government’s development finance institution focused on critical minerals, defined as those minerals that are essential to the economic or national security of the U.S. and which have a supply chain vulnerable to disruption.
TechMet Limited is a leading technology metals investment company. TechMet’s major shareholders include the U.S. International Development Finance Corporation (DFC) and the global energy and commodity group Mercuria.