Rainbow Rare Earths has drawn attention to the steep rise in yttrium prices this year, arguing that the surge underscores both the strategic importance of the metal and the potential economic upside for its Phalaborwa rare earths project in South Africa.
Yttrium, a medium-to-heavy rare earth element used across high-tech and defence applications, will form part of the company’s SEG+ product – a mixed concentrate of economically significant medium and heavy rare earths. Rainbow recently incorporated yttrium into its resource estimate for Phalaborwa and expects annual production of about 213 tonnes of yttrium oxide as part of its high-purity SEG+ output.
Data from Argus Media show that yttrium oxide (99.999% CIF Europe) has climbed from around US$6/kg at the start of the year to between US$220/kg and US$320/kg, with the widening price range reflecting differing contract structures. The jump follows China’s imposition of export controls in April, which has disrupted supply chains and triggered shortages in the global market.
Rainbow said the price escalation could add more than US$30mn to Phalaborwa’s annual EBITDA, based on current lower-end European pricing and an assumed SEG+ payability of 70 per cent.
Chief executive George Bennett said the volatility highlighted “the fragility of global dependence on China for strategic minerals”. He added that Phalaborwa’s ability to produce a broad suite of rare earths, including heavy elements such as yttrium, without additional processing cost positioned it as a “near-term, low-capital source” for Western supply chains.
We caught up with CEO George Bennett at the 2024 Mining Indaba conference in Cape Town. He provided an update on Rainbow’s operations, but also told us about the many uses of rare earths and why they are so important in the global energy transition.