A project in South Africa plans to recover valuable rare earth minerals from millions of tonnes of waste left behind by historic fertiliser production.
Rainbow Rare Earths is developing the project at Phalaborwa, where two above-ground stockpiles contain an estimated 35 million tonnes of material.
Canada’s Neo Performance Materials has now signed a memorandum of understanding with Rainbow covering technical cooperation and the proposed purchase of some future production.
If developed successfully, the project could provide another source of rare earth materials for European manufacturers.
South Africa rare earth project targets fertiliser waste
The Phalaborwa project plans to extract rare earth elements from waste generated by historical phosphate processing.
Rainbow estimates that the two existing stockpiles contain around 35 million tonnes of material.
Unlike a conventional mine, the proposed project would process material that has already been brought to the surface.
Rainbow plans to carry out processing in South Africa.
Neo would provide technical expertise for the final separation stage, according to details reported by Business Insider Africa.
Testing is currently taking place in Estonia, where Neo operates rare earth separation and magnet manufacturing facilities.
A further pilot campaign is planned in Johannesburg.
Neo agrees proposed share of rare earth output
Under the memorandum, Neo would have rights to purchase portions of two products planned at Phalaborwa.
The company would have rights to 40% of planned neodymium-praseodymium oxide production.
It would also have rights to 65% of planned mixed heavy rare earth carbonate production, which includes dysprosium and terbium.
Those percentages refer to different products. They do not represent ownership stakes in the Phalaborwa project.
The companies have also not yet signed binding supply agreements.
Why these rare earth minerals matter
Neodymium, praseodymium, dysprosium and terbium are used in powerful permanent magnets.
These magnets have applications in electric vehicles, industrial equipment, aerospace technologies and some defence systems.
However, the agreement does not identify a defence customer or establish a military supply contract.
The broader commercial interest comes as countries and companies seek more diverse sources of critical minerals.
According to International Energy Agency figures cited by Business Insider Africa, China accounted for 91% of global refined magnet rare earth output in 2024.
China also accounted for 94% of sintered permanent magnet production that year.
Europe seeks more diverse rare earth supplies
Neo said its partnership with Rainbow supports its strategy to build a more secure rare earth magnet supply chain.
“This partnership with Rainbow advances Neo’s strategy to build a secure and resilient rare earth magnetics supply chain,” Neo chief executive Rahim Suleman said in the company’s September 24 announcement.
If the Phalaborwa project reaches production, material recovered in South Africa could therefore feed into existing European processing and manufacturing capacity.
However, commercial production has not yet started.
First production targeted for 2028
Rainbow expects to publish a pre-feasibility study during the final quarter of 2026.
A definitive feasibility study is expected in the first half of 2027.
The company’s current plans target first production in 2028, subject to the project successfully completing the development process.
Rainbow has also previously outlined a proposed $50 million US development-finance investment through TechMet.
That proposed financing is separate from the new agreement with Neo.
For now, the memorandum represents another development step rather than a completed investment or confirmed supply contract.