18th Oct 2024 11:47
(Alliance News) - Rainbow Rare Earths Ltd on Friday said its annual loss narrowed following a reduction in impairment costs and improved demand in the rare earth permanent magnet market.
The developer of the Phalaborwa rare earths project in South Africa and Uberaba project in Brazil narrowed its pretax loss to USD4.3 million in the year ended June 30, from USD12.9 million last year. It reported no revenue, unchanged from the year before.
This was primarily due to the impairment from the company's Gakara assets reducing by 93% to USD717,000 from USD9.6 million the year prior.
Gakara was a low-volume rare earth project in western Burundi in which Rainbow Rare Earths had a 90% stake. The remaining 10% was owned by the Burundi state. In June 2021, the Burundi government requested the suspension of the project and, despite "meaningful negotiations" with the Burundi government during 2024, Rainbow Rare Earths made no progress towards resolving its suspension.
The company can now no longer reasonably assume that operations at Gakara will restart, and have written all assets associated with the unit down to nil.
Rainbow Rare Earths noted that the market for rare earth permanent magnets nearly doubled between 2020 and 2024, and cited a forecast by Argus Media Ltd that demand will continue to grow by around 7% per annum over the next ten years.
Shares in Rainbow Rare Earths were down 2.1% at 11.45 pence each in London on Friday morning.
By Emily Parsons, Alliance News reporter
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