Rainbow Rare Earths has commenced a pre-feasibility study (PFS) for its Uberaba Project in Brazil, following a successful economic assessment in March that valued the project at $916 million post-tax net present value.

The company, which already operates the Phalaborwa Project in South Africa extracting rare earths from phosphogypsum stacks left by historic phosphate mining, is now advancing its second major project.

The Uberaba project in Brazil's Minas Gerais state aims to process approximately 2.7 million tonnes of phosphogypsum waste annually over an anticipated 30-year period.

The economic assessment released in March estimated that Uberaba could generate average annual EBITDA of $217 million over three decades, with an internal rate of return of 45 per cent and a payback period of just 1.7 years.

The proposed on-site processing facility is designed to produce separated neodymium and praseodymium oxide, alongside a mixed samarium, europium and gadolinium rare earth carbonate containing higher concentrations of medium and heavy rare earth elements. Both products are expected to achieve purities of about 99.5 per cent.

"Following the successful results of the economic assessment and the signing of the joint development agreement with Mosaic, we are pleased to continue our partnership with the start of the PFS and appointment of SRK Consulting to complete the Joint Ore Reserves Committee-compliant MRE for the Uberaba project," said Rainbow CEO George Bennett.

The Phalaborwa Rare Earths Project in South Africa has a total JORC-compliant Mineral Resource Estimate of 35 million tonnes at 0.44 per cent total rare earth oxide contained within phosphogypsum in two unconsolidated stacks derived from historic phosphate hard rock mining. Mosaic, which operates phosphate mining and processing facilities at the Uberaba site, is sending an additional six tonnes of phosphogypsum from its operations to Rainbow's laboratory and pilot plant in South Africa for further testing.

"Uberaba is expected to demonstrate the value of Rainbow's proprietary IP across other phosphogypsum projects," Bennett said. "Strategically situated in Brazil, a crucial hub for rare earths supply chain independence and the focus of extensive US government support for the industry, and with the potential to deliver near-term REE production in the lowest-cost quartile, Uberaba represents a valuable opportunity for Rainbow to further leverage the expertise we have developed at Phalaborwa."