George Bennett, the new chief executive of Rainbow Rare Earths, is aiming for a near 20-fold production boost at Africa’s only active rare earths mine that would make it the second-largest outside China.
Mr Bennett, a South African who was appointed to the London-listed company this month, said he wanted to expand production at the Burundi site to meet rising demand for the metals from electric cars and renewable energy.
Rare earths, 17 chemical elements that are essential to electronics and defence technologies, have come under greater scrutiny this year after China said in May it could ban their export in retaliation against trade tariffs launched by US president Donald Trump.
Australia this week released a list of 15 rare earths and critical minerals projects it wanted to develop with the US as part of efforts to challenge China’s dominance in the sector.
China produces 80 per cent of the world’s rare earths and Chinese companies have also bought stakes in overseas rare earths mines in California and Greenland.
Rainbow exports rare earths to China but Mr Bennett said the company “wouldn’t take a Chinese partner” as it expanded.
London-based investment company TechMet also has a £3m joint venture with Rainbow to develop a rare earths processing facility outside Africa, which is likely to be in the US.
Workers have been digging by hand at the mine in Burundi since December 2017, selling 1,100 tonnes of rare earth ore over the year to March 2019.
Mr Bennett said he was targeting production of 10,000 tonnes of rare earth oxides from the “elephant of a deposit” before boosting it to 20,000 tonnes.
“It’s been artisanal mining on steroids,” he said. “But it needs to be mined in a bulk mining way.”
Australian-listed miner Lynas is the only other publicly listed rare earths miner producing outside China, while miners Peak Resources and Mkango Resources are developing projects in Tanzania and Malawi respectively.
Last year Lynas produced 19,700 tonnes of rare earth oxides from its mine in Australia.
Mr Bennett said Rainbow’s project had a key advantage in that there were no radioactive minerals such as thorium or uranium in the deposit, making the mining waste easier to handle.
However, Ryan Castilloux, managing director of consultancy Adamas Intelligence, said the company had yet to prove the quality of its Burundi deposit.
“It begs the question whether the juice is worth the squeeze,” he said.
He said the rare earths Rainbow was at present exporting to China for processing were low-value and worth just $2-$3 a kilogramme, which would only provide revenues of $10m-$15m even if production accelerated.
Still, Mr Bennett said he wanted to add the next stage of processing in Burundi to extract more value from the rare earths rather than exporting them to China.
He said that while the company would eventually have to raise funds, “we have enough money to do confirmatory exploratory work”.
Rainbow’s shares almost tripled in late May after news of China’s possible export ban but have since fallen 60 per cent to trade at 3p.