Rainbow Rare Earths announced that it has signed a Letter of Intent to enter into an offtake agreement with NEXUS Intertrade (Pty) Ltd. ("NEXUS"), under which NEXUS will acquire gypsum from the Phalaborwa project in South Africa and sell it to end users. The Phalaborwa project is due to commence production in 2026 and operations will involve processing the existing unlined gypsum stacks in order to extract the rare earth elements. These gypsum stacks have accumulated acid water over time and Rainbow's process will neutralise the acid, rendering the water suitable for use in the process plant.

The by-product of Rainbow's process will be a cleaner, 'benign' gypsum which no longer contains any acid water residue. The benign gypsum will be stored on new stacks lined according to International Finance Corporation standards and Equator Principles. NEXUS will work with Rainbow to establish the grade and quality of the benign gypsum at Phalaborwa, which will in turn determine the blended average sales price per tonne, as well as the available markets for its use, both in South Africa and neighbouring countries.

NEXUS currently anticipates demand from the domestic cement manufacturing industry, the domestic gypsum board and plaster manufacturing industry, the domestic agricultural industry, and from certain international export markets to which it also has access, estimated at 400 - 600 kt per annum. An exclusive five-year offtake agreement will be concluded once Rainbow and NEXUS have agreed upon the annual tonnage of gypsum to be supplied and the market related price per annum, with the option for renewal for a further two five-year periods. The Phalaborwa project currently has a mineral resource estimate of 30.4 million tonnes and a mine life of at least 14 years; however, the benign gypsum sales are expected to be a much longer-life operation, thereby having a positive socio-economic effect on local industry.