Key Takeaways
- Neo will provide technical support and solvent extraction expertise for Rainbow’s Phalaborwa rare earth project in South Africa.
- Neo will receive offtake rights covering 40% of Phalaborwa’s annual NdPr oxide production and 65% of its SEG+ production.
- The agreement could provide Neo with another source of rare earth feedstock for its European separation and magnet operations.
Neo to Provide Rare Earth Separation Technology
Under the MOU, Neo will provide design input and technical support for the final solvent extraction separation circuit at the Phalaborwa Project.
The companies are already conducting test work in Estonia using material from the project. This will be followed by an integrated pilot-scale campaign in Johannesburg.
The MOU describes separated neodymium-praseodymium (NdPr) oxide with purity above 99%, along with a mixed samarium-europium-gadolinium and heavy rare earth carbonate known as SEG+.
The SEG+ material contains magnet-related rare earth elements including dysprosium and terbium.
Neo Secures Offtake Rights
The MOU also provides Neo with rights to purchase a portion of the Phalaborwa Project’s future production.
Rainbow will provide Neo with offtake rights covering 40% of the project's annual production of separated NdPr oxide and 65% of its annual mixed SEG+ heavy rare earth carbonate production.
The parties have also agreed to consider toll treatment of the remaining 35% of the SEG+ material at Neo's facilities. Under that potential arrangement, separated dysprosium, terbium and yttrium would be returned to Rainbow for marketing.
Phalaborwa Project Uses Existing Phosphogypsum
Rainbow's project is designed to recover rare earth elements from phosphogypsum residue rather than relying on new mining.
According to Neo, recovering rare earths from material that has already been stockpiled could provide an additional source of magnetic rare earth products without requiring new mining activity.
Neo described the Phalaborwa Project as a potential secondary source of magnetic rare earth feedstock following its technical due diligence of Rainbow's recovery process.
Impact on Neo's European Operations
The agreement is intended to diversify Neo's raw material supply chain and support its European rare earth platform.
Neo says its European platform includes a commercial light and heavy rare earth separation facility and a sintered magnet manufacturing facility in Estonia. The company also has manufacturing facilities in Canada, China, Germany, Thailand and the United Kingdom.
Neo’s global platform also includes corporate offices in the United States, Singapore and Beijing, as well as a dedicated research and development center in Singapore.
The new MOU could therefore add another potential source of rare earth feedstock to support Neo's broader European operations.
MOU Remains Subject to Definitive Agreements
The agreement between Neo and Rainbow is a memorandum of understanding rather than a completed long-term supply contract.
Both companies have committed to advancing binding long-form agreements, and work on those documents has begun. The terms described in the MOU remain subject to negotiation and execution of definitive agreements.
Neo identifies the negotiation and execution of definitive offtake and technical agreements, as well as test work, pilot results, project development, financing, production volumes and timing, as forward-looking matters.
The partnership therefore represents an early-stage step toward establishing another rare earth supply source while technical testing, project studies and commercial agreements continue.