Rainbow Rare Earths rises 8% on $916m Brazil project assessment and Mosaic deal

Core Viewpoint - Rainbow Rare Earths Ltd has announced a significant economic assessment for its Uberaba rare earths project in Brazil, revealing a net present value of $916 million and a joint development agreement with Mosaic, leading to an 8% increase in its stock price to 28p [1]. Group 1: Project Overview - The Uberaba project, located in Minas Gerais, Brazil, aims to extract rare earth elements from phosphogypsum, a waste product from Mosaic's phosphoric acid production, utilizing proprietary processing technology developed by Rainbow [2]. - The economic assessment indicates a post-tax internal rate of return of 45%, with average annual earnings before interest, tax, depreciation, and amortization (EBITDA) of $217 million over a 30-year mine life, and a capital payback period of 1.7 years based on a capital expenditure of $279 million [3]. Group 2: Joint Development Agreement - Rainbow and Mosaic have signed a joint project development agreement to advance a pre-feasibility study, aiming to establish a joint venture where Mosaic would hold 51% and Rainbow 49%, pending final negotiations [4]. - The partners are targeting initial production by 2030, contingent on further studies, regulatory approvals, and financing [4]. Group 3: Strategic Importance - The project is similar to Rainbow's flagship Phalaborwa project in South Africa, which employs the same phosphogypsum processing method, and insights from Phalaborwa could expedite the development of Uberaba [5]. - The CEO of Rainbow highlighted Brazil's emerging role as a critical rare earths hub for the Americas, with increasing interest in funding from the United States and allied nations aiming for supply chain independence from China [5].