JOHANNESBURG (miningweekly.com) – Run-of-mine (RoM) for LSE-listed Rainbow Rare Earths’ Burundi-based Gakara rare earths project is forecast to be in the range of 3 000 t to 4 000 t, which is expected to generate 2 250 t of mineral concentrate for sale for the current financial year.   

“Rainbow's revised guidance compares favourably to this estimate, which encompasses a period of only 14 months since first activities at the project,” the company said in a statement on Wednesday.

Rainbow's production plan involves all RoM ore being processed into rare earth mineral concentrate by its processing plant located in the Kabezi region, some 20 km from the mining areas and about 13 km south of Burundi's capital city, Bujumbura.   

“Work has progressed very encouragingly on the Kabezi plant site over the past few months, with all of the bulk earthworks completed before the end of the financial year, followed by civil cement works, and construction of an office block, warehouse and the processing plant itself, all in progress since year-end,” noted CEO Martin Eales.

The completion of construction and commissioning of the plant is expected in the coming weeks, which should enable the company to meet its target of shipping first concentrate in the fourth quarter of 2017.  

Rainbow noted that it deliberately built a relatively large amount of volume capacity into the processing plant design, which should enable the company to comfortably increase yearly production of concentrate in years to come, should the demand be there, without any significant capital expenditure when new mining areas come on stream.

“We believe that the demand for rare earths is likely to increase over the coming years, in direct response to growth in [the use] of electric vehicle technology, as well as in many new green technologies,” noted chairperson Adonis Pouroulis. 

In the 12 months to June 30, 2017, the company said it has taken major steps to realise the potential of the mine.

The Gasagwe area will be the first area of mining operations, which is expected to provide ore from mining activities for at least the first two years of production, with other areas expected to come on line thereafter.

A variety of preparatory tasks were required before mining activities could begin at Gasagwe, including access road construction, updated environmental studies and approvals, negotiation with landholders and the settlement of compensation, the recruitment and training of workers, and the import of machinery. 

“We have seen increases in prices of the various rare earth elements in the oxide and metal forms over the course of 2017, with our basket price for Gasagwe concentrate increasing by around 70% in 2017 so far, which bodes very well for the future returns from the Gakara project as we seek to develop one of the very few non-Chinese sources of rare earths,” concluded Eales.

Rainbow reported that it had seen a widened loss of $1.4-million for the 12 months ended June 30, compared with last year’s loss of $1.2-million.