Rainbow granted licence for Gakara REE project

OREANDA-NEWS. Guernsey-registered Rainbow Rare Earths has been granted a 25-year mining licence for its Gakara rare earth element (REE) project in Burundi, in the central Great Lakes region of Africa.

The Gakara project would be the only industrial-scale mining operation in Burundi and the government will hold a 10pc non-dilutable interest in the project, according to the company. A mining convention has been negotiated and approved by the Burundi government. The mining licence is renewable after the initial 25-year period.

Rainbow has been working on the Gakara project since 2011 and applied for the licence in November last year. "The mining licence was granted very quickly, which is not typical for this industry, and shows how supportive the Burundi government is towards this project," managing director Martin Eales said.

The company will begin preparations for start-up of the mine in 2015, with pre-stripping and possibly some trial mining beginning before the end of the year.

Based on the project's feasibility study, Rainbow is targeting production at Gakara to reach full capacity of 5,000 t/yr with total rare earth oxide (TREO) in the second year of operation. The mining firm initially will sell the ore directly but it expects to announce an offtake partner shortly.

The bastnaesite/monasite ore mix, according to Rainbow's studies, averages 54.3pc TREO, dominated by light REEs, but with "critical rare earth oxides" — neodymium, dysprosium, terbium, europium and yttrium — accounting for 15.5pc of the targeted mix.

The ore grade at Gakara exceeds 54pc TREO while most REE projects have grades of less than 10pc TREO, Eales said. "We can concentrate on only mining the veins, which are easy to access, so there will not be a large amount of stripping to get to the ore," he said.

The company plans to sell its REE ores in the short term but may install downstream processing in the future to capture more value from the project. Rainbow is working with a laboratory in Canada to develop processing technology.