London-listed Rainbow Rare Earths has informed shareholders that its board of directors is initiating a process to evaluate the potential benefits to the company of carrying out a stock exchange listing in the US.

The company notes in a statement to shareholders that it remains focused on its core strategic priorities, which include the delivery this year of the definitive feasibility study at the Phalaborwa project, in South Africa, and the imminent start of a prefeasibility study at the Uberaba project, in Brazil, in conjunction with its US partner, the Mosaic Company.

The decision to evaluate a potential US listing has been driven by various factors.

Rainbow explains that it holds an advanced and low-cost source of potential near-term supply of critical rare earth raw materials for Western rare earths supply chains, including in the US market, adding that the US is leading the way globally on the build-out of independent rare earths supply, with major investments across the supply chain.

Additionally, this decision has also been driven by Rainbow's growing US nexus, including through its partnership with Mosaic to develop the Uberaba project, and continued support from the US International Development Finance Corporation, which has a $50-million option to provide project equity financing for the Phalaborwa project.

Other drivers include notable investor demand for Rainbow from North American investors, as evidenced by the company’s recent private placement, which was supported predominantly by US-based investors, including Traxys, a key partner in the US government's $12-billion critical raw materials stockpiling initiative, Project Vault, as well as observed valuation and trading liquidity enhancement for companies listed on US markets.

As part of the evaluation process, Rainbow says it plans to engage with existing shareholders and other relevant stakeholders to solicit their feedback on this strategy.

The company will update the market following this engagement process.