Rainbow Rare Earths (AIM: RBW) has raised £11.1m from investors in a discounted share subscription, as the group seeks to advance its rare earth projects and strengthen its funding position through to 2027.

The London-listed developer said it would issue about 55.4m new shares at 20p each, representing a 6.5% discount to the previous day’s closing price. The placing attracted a mix of new strategic investors, including US-based family offices and commodities trader Traxys, alongside existing shareholders.

Proceeds from the fundraise will be used to support the completion of a definitive feasibility study at the Phalaborwa project in South Africa, expected in 2026, and a pre-feasibility study at the Uberaba project in Brazil in 2027. The company said the capital would also provide additional working capital and extend its funding runway beyond the second quarter of 2027.

The participation of Traxys, a supplier linked to the US government’s strategic critical minerals stockpile initiative, underscores growing Western interest in securing alternative rare earth supply chains amid geopolitical tensions and efforts to reduce reliance on China.

New shares are expected to be admitted to trading on the London Stock Exchange in early April, taking the company’s total issued share capital to just under 700m shares.

The fundraising marks the latest step in Rainbow’s strategy to position itself as a low-cost producer of rare earth elements, which are essential to a range of technologies including electric vehicles, wind turbines and defence systems.

Below is a film which explains what rare earths are and why they are so critical for the energy transition and defence