Burundi rare earth miner Rainbow Rare Earths dusts itself off for London flotation

Francesca Washtell
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(FILES) The London Stock Exchange logo i
Rainbow Rare Earths will list in London under the ticker "RBW" (Source: Getty)

A Burundi-based miner with one of the world’s highest grade rare earth deposits is dusting itself off for a London Stock Exchange listing.

Rainbow Rare Earths plans to float on the main market in the coming weeks, under the ticker "RBW", and wants to raise $7m (£5.7m) to bring its "low-risk, low-cost" Gakara project into production within nine months.

Rare earth elements at the highly concentrated Gakara site, which include cerium, lanthanum and neodymium, are increasingly in demand for use in magnets, batteries and the burgeoning electric car market.

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No other producer is currently selling concentrate at an equivalent grade to Rainbow outside of China, which has a near monopoly on supply of rare earths​.

Rainbow has "strong support" from the local community and the Burundi government to restart work at the brownfield site, and was granted a 25-year mining licence in 2015. It is also a member of the Pella Resources Group, which is focused on natural resources and energy in Africa, and successfully founded Petra Diamonds and Alufer Mining.

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The group already has an offtake agreement with German metals and engineering giant ThyssenKrupp.

"Our Gakara project continues to differentiate itself from itspeers; modest capital expenditure of just $2.23m and a low cost, simple processing route to produce rare earth elements concentrate directly into the market during 2017 presents investors with a very compelling proposition," said Rainbow chief executive Martin Eales.

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“With recent shifts in the rare earths market, driven by the increasing demand for powerful magnets used for electric vehicles, motors and wind turbines, and a palpable desire from companies to source rare earth products from non-Chinese suppliers, we believe that now is an optimal time for Rainbow to produce rare earth elements concentrate."

Hannam & Partner and Daniel Stewart are joint bookrunners for the listing.

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