AMN - BURUNDI: Rainbow aims to boost Gakara output

Rainbow Rare Earths is targeting a production boost of almost 20-fold at the Gakara project in Burundi. This would make Africa’s only active rare earths mine the world's second-largest operation outside China.

The company's newly appointed CEO George Bennett said the aim was to expand production at the project to meet rising demand for the metals from electric cars and renewable energy.

This comes as rare earths, 17 chemical elements essential to electronics and defence technologies, are in the spotlight owing to the trade tariff tensions between the US and China with the latter being the dominant global player.

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 George Bennett said the company “wouldn’t take a Chinese partner” as it expanded.

London-based investment company TechMet also has a £3 million joint venture with Rainbow to develop a rare earths processing facility outside Africa, which is likely to be in the US.

Bennett, a South African who was appointed to the CEO role in late August, said he was targeting annual 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 Peak Resources and Mkango Resources are developing projects in Tanzania and Malawi respectively.

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.

He 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.

While the company would eventually have to raise funds, he said “we have enough money to do confirmatory exploratory work”.

With over 25 years’ experience in mining, finance and management, Bennett has led a number of mining and energy companies, including Shanta Gold Ltd, which he successfully listed on the London Stock Exchange in 2005, OreCorp Ltd, Argentum (Pty) Energy and most recently Karo Power (Pvt) Ltd.

In 2006, he established MDM Engineering Ltd, which he successfully listed on the London Stock Exchange in 2008. MDM is a mining engineering company building mineral process plants and mining infrastructure throughout Africa. In 2014, Bennett sold the business to Foster Wheeler Limited for US$120 million.

In addition, Bennett has been a partner and director with a number of leading financial, broking and advisory businesses including Fergusson Bros, Simpson Mckie, and HSBC Securities Africa (Pty) Ltd.

Martin Eales, who has been CEO since 2014 and under whose oversight the company was transformed from an early-stage exploration play to Africa’s only producing rare earth mine, fully listed on the London Stock Exchange, is stepping down.

Rainbow’s chairman Adonis Pouroulis said, “We are delighted to bring someone of George’s calibre on board. George has considerable experience in developing assets, particularly in the natural resources and energy space, and has a track record of success. We think he will be instrumental in helping Rainbow reach the next stage of its development.

"At the same time, I would like to thank Martin for his support during the early stages of Rainbow’s development, IPO, and initial production.”

Bennett said, “I am looking forward to the challenge of the role. Rainbow has a truly unique asset, with enormous potential, which is as yet largely untapped. My focus will be on setting out a clear strategy based on two areas: stabilising production at Gakara; and developing an understanding of the deposit, through a program of exploration, combined with a robust study of how best to develop this exciting project.”

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